Brazilian federal prosecutors have filed a landmark lawsuit against Chinese electric vehicle (EV) manufacturer BYD and two of its contractors, alleging slave-like labour conditions and human trafficking of Chinese workers. The legal move targets the ongoing construction of BYD’s new electric vehicle factory in Camaçari, Bahia state.

The prosecutors are seeking R$257 million (approx. $50 million) in damages from BYD and two associated firms: China JinJiang Construction Brazil and Tecmonta Equipamentos Inteligentes. These companies are accused of engaging in abusive and deceptive employment practices, violating both Brazilian and international labour laws.

Workers Rescued from Inhumane Conditions

The legal case stems from an investigation conducted in 2023, where Brazilian authorities rescued 220 Chinese workers from the Camaçari construction site. According to officials, the workers were lured into Brazil under false pretenses, misled about the nature of their work, and issued visas that didn’t align with their actual job roles. This deception formed the foundation for the allegation of international human trafficking.

The labour prosecutors' office in Bahia described the working and living conditions as "extremely degrading". Several “settlements,” or makeshift worker accommodations, were reportedly maintained by BYD and its contractors.

Authorities documented that some workers were sleeping on bare bed frames without mattresses, storing food and personal items in the same limited spaces. In one of the worst-reported facilities, only one toilet was available for 31 people, prompting workers to wake up at 4 a.m. to queue for hygiene needs before beginning their day’s work.

Visa Manipulation and Deceptive Recruitment

Investigators allege that BYD, JinJiang, and Tecmonta used tourist and business visas to bring Chinese nationals into Brazil, even though they were intended to be engaged in manual labour at a construction site. This tactic violated immigration laws and significantly limited workers' rights and access to legal protections under Brazilian labour regulations.

Furthermore, prosecutors argue that the workers were never informed about the actual nature of the work or living conditions, raising red flags about fraudulent recruitment practices and exploitation. The labourers reportedly had no written contracts, and language barriers made it almost impossible for them to seek help.

BYD's Response and International Implications

BYD has not issued any new comments following the announcement of the lawsuit. However, in December 2024, a company spokesperson had pushed back against previous allegations, describing them as an attempt to “smear” China and its brands.

Despite these denials, the latest lawsuit places significant pressure on the EV giant. BYD, which has made aggressive global expansion efforts—especially in Latin America—is now facing reputational damage, investor scrutiny, and potential operational setbacks.

The scandal also raises larger concerns about Chinese overseas labour practices, especially within state-supported global infrastructure and industrial projects. If the Brazilian courts uphold the prosecutors’ claims, it may trigger legal and diplomatic ripple effects in other host countries where Chinese firms are operating.

Contractors Under the Spotlight

The two firms named alongside BYD in the suit—China JinJiang Construction Brazil and Tecmonta Equipamentos Inteligentes—are accused of direct involvement in day-to-day labour management at the Camaçari site.

Reports indicate these companies oversaw worker transportation, housing, and daily work operations, making them potentially liable for both labour exploitation and trafficking. The extent of BYD’s oversight over these subcontractors is still under investigation, but legal experts suggest that parent companies cannot deflect responsibility when abuse occurs under their projects.

Labour Protections and International Norms

Brazil has strong labour laws that prohibit any form of forced or degrading work conditions. Under international conventions—particularly those of the International Labour Organization (ILO)—human trafficking and exploitation of migrant workers are considered serious human rights violations.

By filing this lawsuit, Brazilian prosecutors are sending a clear message to multinational companies: violations will be met with legal action, regardless of economic or diplomatic consequences.

BYD's Global Growth Amid Scrutiny

This scandal comes at a time when BYD is rapidly expanding its global footprint, seeking to become a leader in sustainable automotive manufacturing. The company has received support from several governments and is often viewed as China’s answer to Tesla.

However, incidents like this risk undermining its public image, especially as the global EV market becomes increasingly conscious about ethical sourcing, fair labour practices, and environmental governance.

In response to such growing scrutiny, investors, regulators, and human rights organisations are likely to monitor BYD’s operations more closely going forward.

Future Outlook

Legal experts expect a lengthy legal battle, and depending on the court's findings, BYD and its partners could face significant fines, criminal charges, and bans on future public-private contracts in Brazil.

Moreover, Chinese foreign policy, especially around its Belt and Road Initiative (BRI) and associated infrastructure investments, may come under renewed scrutiny, given the reputational risks posed by scandals involving human rights violations.

If found guilty, the ruling against BYD could set a precedent for holding multinational corporations accountable for labour violations committed through subcontractors abroad.

Conclusion

This case underscores the importance of corporate accountability and transparency in overseas operations. As countries like Brazil demand higher labour standards from foreign investors, companies operating abroad will need to adhere strictly to local laws and international labour conventions.

BYD now finds itself at a critical crossroads, where its response to these serious allegations could shape the future of its global expansion efforts and its standing in the international community.

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