Chinese electric vehicle leader BYD has been embroiled in a labor dispute in Brazil this month, first being listed on the Brazilian “blacklist of labor abuse” and then quickly removed from the list. The Director of the Brazilian Labor Inspectorate was subsequently dismissed, sparking widespread attention to the series of events.
According to Nikkei Asia’s report on Wednesday, the scandal surrounding BYD in Brazil traces back to December 2024. Brazilian media reported at that time that the Bahia State Public Labor Prosecutor’s Office and other institutions conducted a surprise inspection at the BYD factory construction site in the northeastern city of Camacari, “rescuing” 163 Chinese workers.
The investigation at the time revealed “serious infrastructure and hygiene issues” at the BYD factory construction site, including insufficient beds, poor toilet conditions, improper food handling, and allegations of forced labor such as mandatory deposits, surrendering of passports, and some wages being withheld.
Byd then stated that the company has “zero tolerance” for human rights violations and announced the termination of cooperation with the contractor Jinjiang Construction Brazil.
After several delays, the construction of the BYD factory in Camacari was finally completed. Brazilian President Luiz Inacio Lula da Silva attended the factory’s opening ceremony in October 2025.
In December 2025, BYD and two contractors reached a settlement with the Bahia State Labor Prosecutor’s Office for 40 million Reais (about 8 million USD), half of which was allocated for compensating affected workers.
However, the saga continued. On April 6, 2026, BYD was once again included in Brazil’s “dirty list” – a list that identifies companies putting workers in situations akin to slave labor, established during Lula’s first term in 2003, updated every six months, with names listed for two years.
Less than a week later, a local court temporarily removed BYD from the list pending the final ruling as it was deemed that BYD was not the direct employer of the workers in question. Subsequently, Labor Inspection Chief Luiz Felipe Brandao de Mello was dismissed by the Labor Department for “improper administrative conduct.”
Mario Diniz, Vice President of the Bahia Labor Inspectorate Workers Union Safiteba, indicated in an interview with Nikkei Asia that the dismissal of the Labor Inspectorate Chief appeared to be retaliatory, occurring shortly after BYD was blacklisted.
He also highlighted that this event represented a peak in the Labor Minister’s interventions in labor inspections, something unprecedented since Brazil’s redemocratization in the 1980s.
The controversy surrounding the dismissal of Labor Inspectorate Chief de Mello arose from his alleged defiance of Labor Minister Marinho’s instruction to remove BYD from the labor blacklist.
Marinho denied the allegations of interference when responding to the controversy.
Mauricio Santoro, a professor of international relations at the State University of Rio de Janeiro, commented that BYD’s Brazilian factory has garnered “strong support from important political figures in Brazil,” even hiring several former ministers, senators, and mayors, a practice uncommon among other Chinese companies investing in Brazil.
He pointed out that this incident revealed the contradictory attitude of the Lula government towards China, viewing Beijing as an important partner to counter Trump’s influence in the Western Hemisphere while largely ignoring China’s “authoritarian political system, systematic human rights violations, and labor abuse issues.”
For BYD, overseas expansion represents a key strategy to address challenges in the domestic market. In 2025, BYD’s overseas automotive business revenue nearly doubled to 191.3 billion yuan (approximately 28 billion USD), while domestic revenue declined by 11.7%.
The company has identified Latin America as a key market in its latest annual report, with the Brazilian factory being BYD’s first manufacturing base in Latin America, achieving the start of production in just 15 months from groundbreaking to the first car off the line.