Brazil has suspended the issuance of temporary work visas for BYD, the Chinese electric vehicle (EV) giant, following accusations of human trafficking and exploitative labor practices at a factory site in the northeastern state of Bahia. The decision comes after Brazilian authorities discovered 163 Chinese workers employed under “slavery-like” conditions at the construction site of BYD’s new factory. The workers were reportedly brought to Brazil by the contractor, Jinjiang Group, which has denied any wrongdoing.

The controversy surrounding the BYD factory highlights the increasing concerns about labor conditions and human trafficking, even as China’s influence grows in South America. The factory in Bahia, which is part of BYD’s $620 million investment in Brazil, is set to become one of the company’s key production facilities, with plans to begin production in early 2025. The factory will initially produce 150,000 electric cars annually, cementing Brazil’s role as a crucial part of BYD’s global expansion strategy.

Brazilian labor authorities revealed that the workers were brought into the country under temporary work visas, and were allegedly subjected to exploitative working conditions. The Ministry of Justice has indicated that if further investigations confirm the irregularities, it would revoke the residence permits issued to the Chinese workers involved. Additionally, the government’s response to the allegations has been swift. On December 20, just days before the findings were publicly released, Brazil’s Ministry of Justice had already requested the suspension of BYD’s ability to issue temporary visas, which was promptly enacted.

In a statement, the Ministry of Foreign Affairs confirmed the suspension of visa issuance, which directly impacts BYD’s ability to continue its workforce expansion at the factory site. Despite these serious allegations, BYD did not immediately respond to requests for comment, and the company’s spokesperson, along with its contractor Jinjiang Group, has denied the accusations. According to Jinjiang Group, the claims of “slavery-like” conditions were a result of translation misunderstandings, and they insist that the workers were treated fairly.

The case has raised significant concerns about labor rights and working conditions in China’s overseas investments. As China pushes for greater economic influence in Latin America, human rights groups have become increasingly vocal about the exploitation of workers in countries that lack stringent labor regulations. BYD, which has emerged as a dominant player in Brazil’s EV market, now faces intense scrutiny regarding its labor practices and its commitment to ethical business operations.

The Bahia factory and its construction process have become a flashpoint in Brazil-China relations, illustrating the tensions between economic interests and labor rights. Brazil, as one of the largest markets for BYD’s vehicles outside China, has played a pivotal role in the company’s global strategy. In 2024, nearly 20% of BYD’s total car sales outside China were made in Brazil, underscoring the country’s importance as a key market for the company’s electric vehicles.

In response to the human trafficking allegations, BYD and Jinjiang Group have agreed to house the affected workers in hotels until a resolution can be reached. This move, while seen as a necessary step, raises questions about the company’s oversight of its labor practices and its role in preventing such situations in the future.

As the investigation continues, the incident serves as a stark reminder of the need for companies to ensure ethical labor practices in their overseas operations, especially in regions with less stringent enforcement of worker protections. This controversy could have lasting implications for BYD’s reputation and its ability to expand further in Brazil and other emerging markets.

(Adapted from Reuters.com)