Brazil says workers at China’s BYD plant are victims of human trafficking By Reuters

By Fabio Teixeira

RIO DE JANEIRO/SHANGHAI (Reuters) -Chinese workers at a construction site in Brazil for a factory owned by Chinese electric vehicle maker BYD (SZ:) are victims of human trafficking, Brazilian labor authorities said in a statement on Thursday. growing controversy at BYD’s largest center. foreign market.

BYD and contractor Jinjiang Group agreed to help and house the 163 workers in hotels until an agreement is reached to end their contracts, Brazil’s Labor Prosecutor’s Office said in a statement after meeting with representatives of both companies.

The brief statement did not provide details about how prosecutors reached their conclusion.

BYD and Jinjiang did not immediately respond to requests for comment on Friday. Jinjiang on Monday rejected Brazilian authorities’ assessment that construction workers in the eastern state of Bahia were working in “slavery-like conditions.”

Jinjiang said, in a social media post republished by a BYD spokesperson, that the description of the workers as “enslaved” was inaccurate and that there were misunderstandings in the translation.

BYD initially said it had cut ties with Jinjiang, but a BYD executive later accused “foreign forces” and some Chinese media of “deliberately defaming Chinese brands and the country and undermining the relationship between China and Brazil.”

China’s Foreign Ministry said on Friday that it has maintained communication with the Brazilian side to verify the situation, adding that China protects workers’ rights and requires Chinese companies to operate in accordance with the law.

Brazilian prosecutors said they would meet with the companies again on Jan. 7 and propose a deal.

THE GROWING INFLUENCE OF CHINA IN BRAZIL

A deal could free BYD and Jinjiang from an investigation by labor prosecutors, but they could still face scrutiny from labor inspectors and federal prosecutors, who have requested the sharing of evidence so that “action can be taken in the criminal sphere,” the statement said. saying.

BYD has been building the factory to produce 150,000 cars initially as part of plans to start production in Brazil early next year. Almost one in five BYD cars sold outside China in the first 11 months of 2024 was in Brazil.

The factory has become a symbol of China’s growing influence in Brazil and an example of a closer relationship between the two countries. BYD has invested 620 million dollars just to establish the Bahia manufacturing complex.

Reports of irregularities in Bahia could become a major point of friction in bilateral relations.

Brazil has long sought more Chinese investment. But the Chinese model of bringing Chinese workers to the countries where it invests presents a challenge to local job creation, a priority for President Luiz Inácio Lula da Silva.

The investigation also draws attention to BYD as it seeks to expand globally after gaining dominance in China, the world’s largest auto market, where it now occupies more than a third of the electric and plug-in hybrid vehicle market.

BYD, ready to outsell Ford (NYSE 🙂 and sling (NYSE:) globally this year, has seen extraordinary expansion domestically and abroad, increasing its capacity and embarking on a massive hiring spree. The company had nearly 1 million employees in September.

While it still makes more than 90% of its sales in China, BYD has been building passenger vehicle factories in Hungary, Mexico, Thailand, Uzbekistan and Brazil to serve its main foreign markets and increase marketing investments abroad.

Jinjiang also does construction for BYD in China, according to records in Chinese enterprise information database Tianyancha.

RARE CHINESE REJECTION AGAINST BYD

The case has sparked a rare reaction on Chinese social media against BYD, opening a discussion about workers’ rights, with several internet users saying that the living conditions of workers in Brazil were typical of those found in the construction works in China.

Brazilian prosecutors released videos from workers’ homes showing bunk beds without mattresses. They said workers worked excessively long hours, sometimes seven days a week, in conditions that authorities called degrading.

In Brazil, “slavery-like conditions” include forced labor but also degrading working conditions, long hours that pose a risk to workers’ health, debt bondage, and any work that violates human dignity.

Prominent Chinese commentator Hu Xijin, former editor of the Communist Party tabloid Global Times, echoed Jinjiang in saying there could be misunderstandings but said Chinese construction companies should improve the living conditions of their employees.

For BYD, the case shows that it is likely to face more controversies in the future as it emerges as China’s most powerful electric vehicle brand, Hu said.

“The only thing BYD can do is increase its own requirements and match its growing influence in all directions. This is not easy, but BYD should be able to do it.”