RIO DE JANEIRO: Chinese workers at a construction site in Brazil for a factory owned by China’s electric vehicle producer BYD are victims of human trafficking, Brazilian labour authorities said on Thursday (Dec 26) in a growing controversy in BYD’s biggest overseas market.
BYD and contractor Jinjiang Group have agreed to assist and house the 163 workers in hotels until a deal to end their contracts is reached, Brazil’s Labor Prosecutor’s Office said in a statement after meeting representatives from both firms.
The brief statement did not provide details on how prosecutors had reached their conclusion.
BYD and Jinjiang did not immediately respond to requests for comment on Friday. Jinjiang rejected the Brazilian authorities’ assessment on Monday that the workers at the site in the eastern state of Bahia were operating under “slavery-like conditions”.
Jinjiang said, in a social media post reposted by a BYD spokesperson, that the portrayal of the workers as “enslaved” was inaccurate and that there were translation misunderstandings.
BYD initially said it had cut ties with Jinjiang, but a BYD executive later accused “foreign forces” and some Chinese media of “deliberately smearing Chinese brands and the country and undermining the relationship between China and Brazil”.
China’s foreign ministry said on Wednesday its embassy in Brazil was communicating with the Brazilian government to verify and address the situation. The ministry did not immediately respond on Friday to a request for comment on the trafficking claim.
The Brazil prosecutors said they would meet again with the companies on Jan 7 and propose a deal.
CHINA’S GROWING INFLUENCE IN BRAZIL
A deal could clear BYD and Jinjiang from an investigation by labour prosecutors, but they could still face scrutiny from labour inspectors and from federal prosecutors, who have requested the sharing of evidence so that “measures can be adopted in the criminal sphere”, the statement said.
BYD has been building the factory to produce 150,000 cars initially as part of plans to start production in Brazil early next year. Nearly one in five cars BYD 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 both countries. BYD has invested US$620 million to set up the Bahia factory complex alone.
The reports of irregularities in Bahia could prove to be a major sticking point in bilateral relations.
Brazil has long sought more Chinese investment. But China’s model of taking Chinese workers to the countries where it invests presents a challenge to local job creation, a priority for President Luiz Inacio Lula da Silva.
The investigation also brings unwelcome attention to BYD when it is seeking to expand globally after having gained dominance in China, the world’s largest auto market, where it now takes up more than a third of the market of EVs and plug-in hybrids.
