Brazilian authorities have halted construction of a factory for Chinese electric vehicle (EV) giant BYD, saying workers lived in conditions comparable to “slavery”.
More than 160 workers have been rescued from Brazil's northeastern state of Bahia. A statement from the Public Labor Prosecutor's Office (MPT).
They were allegedly kept in a “degrading” environment and a building company withheld their passports and salaries.
BYD said in a statement that it had cut ties with the firms involved and was committed to “full compliance with Brazilian law.”
The factory was scheduled to be operational by March 2025 and would be BYD's first EV plant outside Asia.
Workers employed by Xinjiang Construction Brazil lived in four facilities in the city of Camachari.
At one such facility, workers were made to sleep on beds without mattresses, according to prosecutors.
Each bathroom was also shared among the 31 workers, forcing them to get up very early to get ready for work.
The MPT said, “The conditions found in the accommodation revealed an alarming picture of precariousness and degradation.”
“Slavery-like conditions,” as defined by Brazilian law, include debt bondage and work that violates human dignity.
The MPT added that the situation constituted “forced labour”, as many workers had their wages withheld and faced additional costs to terminate their contracts.
BYD said the affected workers have been taken to a hotel.
It added that it had conducted a “detailed review” of working and living conditions for subcontracted workers and had asked the construction company “on several occasions” to improve.
BYD, short for Build Your Dreams, is one of the world's largest EV manufacturers.
It has sold more electric cars than Elon Musk's Tesla In the last three months of 2023, the two fought for the top spot in the sector.
The company is expanding its footprint in Brazil, its largest foreign market by a wide margin.
It first opened a factory in São Paulo in 2015, producing chassis for electric buses.
Last year, it announced it would invest 3 billion reais ($484.2 million) to build an EV manufacturing plant in Brazil.
EV sales in China have been boosted by government subsidies. which encourages consumers to trade in their petrol-powered cars for EVs or hybrids.
But there is a growing backlash overseas against what some see as the Chinese government's unfair support for domestic automakers.
Major markets such as the US and the EU have imposed tariffs on EVs from China, with more tariffs expected during the incoming administration of US President-elect Donald Trump.
