Brazilian labor authorities investigate human trafficking at BYD factory site

Investing.com -- Brazilian labor authorities are investigating allegations of human trafficking and forced labor at a construction site in Bahia State, Brazil. The site is set for a factory owned by China's electric vehicle producer, BYD (SZ:002594 ). This investigation is adding to the growing controversy around BYD in the company's largest overseas market.

On Thursday, Brazil's labor ministry released video and photos that seemed to show an overcrowded sleeping area, a bed placed next to a kitchen table, and dirty walls. The labor prosecutor's office, after meeting with representatives from BYD and contractor Jinjiang Group, stated that both parties had agreed to provide assistance and temporary housing in hotels for 163 workers until a contract termination agreement is reached.

The Chinese foreign ministry, on Friday, stated that it has been in communication with the Brazilian authorities to verify the situation. The ministry emphasized its commitment to protecting workers' rights and requiring Chinese companies to operate in compliance with the law. Neither BYD nor Jinjiang responded immediately to requests for comments on Friday. However, Jinjiang dismissed the Brazilian authority's assessment on Monday, stating that the claim of workers operating under slavery-like conditions at the site was inaccurate.

A BYD executive had previously accused "foreign forces and some Chinese media of deliberately smearing Chinese brands." The factory, currently under construction, is part of BYD's plans to begin production in Brazil in 2024 or early 2025. With an estimated annual capacity of producing 150,000 cars, the factory has become a symbol of China's growing influence in Brazil. BYD has invested $620 million in the Bahia factory complex alone.

The investigation brings unwelcome attention to BYD as the company seeks to expand globally, having already gained dominance in China. Brazilian authorities have scheduled another meeting with the companies for January 7, where they plan to propose a deal.

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Source: Investing.com