In 2024, BYD was involved in a scandal of human trafficking and exploitative contracts. The Brazilian Ministry of Labor recently published a blacklist of employers who mistreat workers, with BYD shockingly included. BYD faced a “reputational quagmire” in Brazil, its largest overseas market.
According to CNBC, being on the blacklist does not affect BYD’s business operations in Brazil but prohibits the company from applying for certain types of loans from Brazilian banks. BYD did not respond to media interview requests regarding this matter.
Reports indicated that BYD’s contractor, Jinjiang Group, denied all allegations of human trafficking and exploitation. Jinjiang Group, commissioned by BYD, employed 163 workers who were reportedly exploited by BYD. BYD claimed that they were unaware of any misconduct prior to media reports in late November last year.
Brazilian officials believe that BYD should oversee the work of its contractors and ultimately bear responsibility for the working conditions of the workers.
A labor contract obtained by Reuters showed that Chinese workers employed by Jinjiang in Brazil were required to submit their passports to the employer, most of their wages had to be sent back to China directly, and a nearly $900 deposit had to be paid, which would only be returned after six months of work.
Labor inspectors in Brazil, during a surprise inspection, found that the living conditions of Chinese workers at BYD in Brazil were extremely poor, with overcrowding and lack of basic amenities. 31 workers were crammed into one room with only one toilet, while food and personal items were haphazardly strewn on the floor. Inspectors described the living conditions as “extremely poor.”
The scandal provoked strong condemnation from mainland China and the international community, leading to delays of several months in the construction of BYD’s factory in Brazil.
Under Brazilian government regulations, companies that violate labor laws can reach agreements with the government to improve their practices and compensate workers whose rights have been violated, thus avoiding being blacklisted.
Reports stated that BYD reached an agreement with labor prosecutors in Brazil regarding this incident but not with labor inspectors. Only after exhausting all avenues of appeal at the government level would a company be blacklisted.
Once a company is blacklisted, it remains on the list for two years unless a court orders its removal.