Brazil sues BYD for violation of labor rights

The Brazilian labor prosecutor's office (MPT) filed a civil lawsuit against the Chinese car manufacturer BYD on Tuesday. It holds the company responsible for "international human trafficking" and working conditions "comparable to slavery" during the construction of a future BYD plant in the state of Bahia.

In the lawsuit before the Regional Labor Court of the 5th Region (AZ. 0000449-07.2025.5.05.0134), the MPT demands that BYD and its exclusive contractors JinJiang and Tecmonta (formerly Tonghe) be ordered to pay 257 million reais (40 million euros) in collective moral damages, according to a statement from the labor prosecutor's office. In addition, the MPT is demanding that the companies pay individual moral damages amounting to 21 times the contractual salary plus a salary for each day that the workers were subjected to a condition comparable to slavery, payment of the compensation owed, compliance with Brazilian occupational health and safety standards and refraining from human trafficking and slave labor. For each violation, the MPT is demanding a fine of 50,000 reais (7,770 euros), multiplied by the number of workers affected.

The plans for the BYD plant in Brazil, the company's first outside Asia to build purely electric cars, were announced at the beginning of 2024. At the time, Brazil's President Luiz Inácio Lula da Silva spoke of an investment of around 564 million euros. BYD will transform a Ford factory in the city of Camaçari in the state of Bahia in the north-east of the country, which was closed at the beginning of 2021, into a production complex with a capacity of 150,000 electric cars per year.

"Slave-like" working conditions

At the end of December, the project hit the headlines due to allegations of labor violations and even suspicions of human trafficking. The scandal delayed the original schedule. After initial investigations, the Brazilian authorities spoke of "slave-like conditions" for 163 Chinese workers. Later, another 57 workers were found in a similarly precarious situation. "All 220 workers entered the country illegally, with work visas for specialized services that did not correspond to the activities actually carried out on site," writes the MPT.

At the construction site of the BYD plant, Brazilian officials then discovered that the workers were crammed into accommodation that did not meet minimum standards of comfort and hygiene, that they were guarded by armed guards, that the employment contracts contained illegal clauses, that working hours were not respected and that there were no weekly rest periods. In addition, health and safety regulations had been disregarded.

The investigation revealed that the contractual conditions for their employment were in the nature of forced labor. The workers had to pay a deposit, up to 70 percent of their wages were withheld and their passports were confiscated.

Lawsuit after failed negotiations

As reported by the Brazilian daily Folha de S. Paulo, BYD announced in a statement that the company had a non-negotiable obligation to respect human and labor rights and to act in compliance with Brazilian legislation and international labor protection standards. BYD also stated that it was cooperating with the labor prosecutor's office.

The labor prosecutor's office, in turn, announced that it had filed the complaint with the labor court in Camaçari after the companies refused to sign an agreement to adjust their behavior. According to Folha, the companies wanted to make an agreement conditional on a confidentiality clause, which was not accepted by the Public Prosecutor's Office. The agreement was supposed to serve as a kind of benchmark for future contracts for Chinese companies that want to work in Brazil with employees from their own country.

• Statement of claim

(akn)