Key Takeaways
1. The Public Labour Prosecutor’s Office (MPT) has filed a civil lawsuit against BYD and two contractors due to labor law violations involving 220 Chinese workers in Brazil.
2. Workers were found living in cramped, unhealthy conditions, with reports of lack of mattresses, withheld passports, and illegal contract terms.
3. The MPT is seeking R$257 million (approximately US$51.5 million) in damages, leading to a halt in construction at the Camacari plant.
4. The lawsuit threatens BYD’s global reputation and expansion plans in Latin America, as it was meant to be their first EV manufacturing site outside Asia.
5. Brazilian laws define “slavery-like conditions” broadly, which may lead BYD to reconsider its operations amidst increasing scrutiny of its labor practices.
The Public Labour Prosecutor’s Office (MPT) has initiated a civil lawsuit against BYD along with two of its contractors over the construction of a new electric vehicle plant in Camacari, Brazil. Reports reveal that 220 Chinese workers were found to be living and working under conditions that breach Brazilian labor laws, with prosecutors stating these situations were “similar to slavery”.
Investigation Findings
The inquiry commenced following an anonymous report, which unveiled cramped living spaces, unhealthy housing, and exploitative workplace conditions. Official documents indicate that many workers slept without mattresses, their passports were allegedly taken away, and their contracts included illegal terms. Witnesses noted that they worked excessively long hours without any day off for an entire week, with 60 to 70 percent of their earnings being withheld.
Compensation Demands
The MPT is demanding R$257 million (around US$51.5 million) in damages from the involved companies. Construction at the Camacari plant was halted in late 2023 due to these alarming findings. BYD, which has asserted its “zero tolerance for human rights and labor law violations,” had not provided a response to the lawsuit at the time this article was written.
Impact on Expansion Plans
This facility was intended to be BYD’s first manufacturing site for electric vehicles outside Asia and a key part of its growth strategy in Latin America. The lawsuit poses a significant threat to the company’s global reputation and expansion plans. The timing is particularly noteworthy, as BYD is in direct competition with Tesla and other electric vehicle manufacturers for market dominance, having recently surpassed Tesla in European EV sales this year.
Brazilian legislation classifies “slavery-like conditions” not just as forced labor but also includes debt bondage, degrading living situations, and breaches of human dignity. The ongoing legal battle might prompt BYD to rethink its operations in the area and attract global scrutiny towards its labor practices abroad.
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