Why Brazil’s "slave labour" registry puts BYD under pressure

Brazil has placed BYD on its official registry of employers accused of subjecting workers to conditions analogous to slavery, following a 2024 scandal involving Chinese laborers allegedly exposed to human trafficking practices and abusive contracts, as per Reuters.

The registry, published by Brazil’s Labor Ministry, heightens reputational risks for BYD in what is its largest market outside China. Inclusion on the list also restricts the company’s access to certain types of financing from Brazilian banks. However, it does not affect the operations of BYD’s sole manufacturing facility in the country, which the workers in question had been hired to construct.

The controversy centers on the hiring of 163 Chinese workers by Jinjiang Group, a contractor engaged by BYD. Jinjiang Group has denied all allegations. BYD, for its part, has previously stated it was unaware of any violations until Brazilian media reports surfaced in late November 2024. Brazilian authorities have countered that BYD bears ultimate responsibility for labor conditions, arguing that the company is obligated to oversee and ensure compliance among its contractors.

Details of the workers’ treatment emerged from a labor contract reviewed by Reuters and findings from an inspection raid. According to the contract, workers were required to surrender their passports upon arrival, have a significant portion of their wages remitted directly to China, and pay a deposit of nearly $900—refundable only after six months of employment.

Labor inspectors reported severe overcrowding and substandard living conditions. In one case, 31 workers were housed in a single residence with only one bathroom. The accommodations reportedly lacked mattresses, with food stored on the ground alongside personal belongings. Inspectors described these conditions as “degrading.”

The revelations triggered international backlash, including criticism within China, and caused a delay of several months in the construction of the plant. Despite the controversy, BYD appeared to regain momentum later in the year. In October, Brazilian President Luiz Inácio Lula da Silva attended the plant’s inauguration, underscoring strengthening bilateral ties between Brazil and China. Since then, the facility has produced more than 25,000 vehicles.

Brazilian regulations allow companies to avoid inclusion on the registry by signing agreements with the government committing to reform labor practices and compensate affected workers. While BYD reached an agreement with labor prosecutors, it did not conclude a similar deal with labor inspectors.

Companies are added to the registry only after exhausting all avenues of administrative appeal. Once listed, they remain on the registry for a minimum of two years, unless a court rules otherwise.

By Tamilla Hasanova