Brazil has put China’s BYD on a registry of employers who have subjected workers to conditions similar to slavery, after a 2024 scandal in which Chinese workers were said to have been victims of human trafficking and abusive contracts.
The list, published by Brazil’s Labor Ministry, carries further reputational risk for the automaker in its biggest market after China.
It also bars BYD from obtaining certain types of loans from Brazilian banks, but does not affect the operation of its sole auto plant in the country that the workers were hired to build.
BYD did not reply to a request for comment.
Jinjiang Group, the contractor that BYD used to hire the 163 workers cited in the scandal, has denied the claims. BYD has previously said it had no knowledge of any violations until reports by Brazilian media in late November.
Brazilian officials have argued that BYD is ultimately responsible for its workers’ conditions as it should be supervising its contractors.
Chinese workers hired by Jinjiang in Brazil had to hand over their passports to their new employer, let most of their wages be sent directly to China, and fork over an almost $900 deposit that they could only get back after six months’ work, according to a labor contract seen by Reuters.
A raid by labor inspectors also found the laborers living crammed in lodgings without mattresses. Thirty-one workers were crammed in a single house with only one bathroom and food piled up on the ground alongside personal belongings, in what inspectors said were “degrading conditions.”
The scandal caused international outrage, including in China, and led to a months-long delay in the construction of the plant.
But BYD had appeared to have put the scandal behind it, with President Luiz Inacio Lula da Silva attending the plant’s inauguration in October in a show of the strengthening ties between Brazil and China.
The plant has since produced over 25,000 vehicles.
Companies can avoid being included in the list by signing a deal with the government committing to change their practices and compensate workers whose rights were abused.
BYD signed a deal with labor prosecutors over the matter, but not with labor inspectors.
Firms are only added to the list after all possibilities of appeal are exhausted at the government level. After a company is added, it stays on the list for two years, barring a court decision to remove it.
