Chinese EV Giant BYD Faces $45 Million Lawsuit Over Human Trafficking Abuses in Brazil, Winning Rare Support From Chinese Workers

BYD Faces Human Trafficking Allegations in Brazil: A Corporate Reckoning

In the humid outskirts of Camaçari, northeastern Brazil, the half-finished skeleton of what was meant to be Chinese automaker BYD's crown jewel stands abandoned. Construction cranes hover motionless over concrete foundations laid for what was planned as the company's first electric vehicle manufacturing facility outside Asia. But behind the stalled project lies a disturbing human story that has sent shockwaves through international business circles and threatens to permanently stain the reputation of one of China's most celebrated corporate champions.

Brazilian prosecutors have filed a lawsuit seeking 257 million reais ($45 million) in damages against BYD and two contractors—Jinjiang Construction Brazil and Tecmonta—alleging human trafficking and labor conditions "akin to slavery" involving 220 Chinese workers brought to build the facility.

The Camacari Investigation: A Modern Slavery Revelation

What began as an anonymous tip in December 2024 culminated in a police operation that uncovered a grim reality behind the ambitious factory project in Bahia state, Brazil's northeastern industrial hub.

During pre-dawn raids, authorities discovered Chinese workers living in conditions that deputy labor prosecutor Fabio Leal described as "fundamentally dehumanizing." Workers slept in overcrowded dormitories where up to 31 people shared a single toilet. Some had no mattresses. They were forced to wake at 4 a.m. to wash before shifts, with personal belongings stored alongside food in cramped quarters lacking basic sanitation.

"The violations we documented weren't simply technical breaches of labor regulations—they represented a systematic denial of human dignity," said a senior investigator involved in the case.

The investigation revealed a troubling pattern of control: workers had their passports confiscated upon arrival, up to 70 percent of their wages were withheld, and they faced excessive working hours without weekly rest periods. Their employment contracts included clauses requiring approximately $900 deposits and strict behavioral regulations backed by financial penalties.

Corporate Accountability in the Global South

The case has profound implications for international business practices, particularly regarding how multinational corporations operate in developing economies. Brazil's prosecutors are taking an uncompromising stance that suggests a shifting power dynamic in global commerce.

"This case represents a watershed moment in how Brazil approaches foreign direct investment," explains Maria, an expert in international labor law. "The message is clear: economic development cannot come at the expense of fundamental human rights, regardless of a company's global standing or investment promises."

For BYD, the stakes could hardly be higher. Brazil represents the company's largest international market outside China, where the electric vehicle manufacturer had already established a facility in São Paulo in 2015 producing electric bus chassis. The Camaçari factory—an ambitious expansion of BYD's footprint—was scheduled to begin operations in March 2025 before construction was suspended following the discovery of labor violations.

The Human Cost: Workers' Testimonies

While all affected workers have since returned to China, prosecutors have compiled extensive documentation of their experiences.

According to court documents, many workers arrived in Brazil under false pretenses, having been promised legitimate employment opportunities with fair compensation. Instead, they found themselves trapped in a system designed to extract maximum labor while minimizing costs.

"The workers were effectively captive," said a regional labor inspector involved in the case. "Without passports, facing significant financial penalties for breaking contracts, and with much of their pay withheld, they had no practical means of escape."

Detailed testimonies collected during the investigation reveal workers were brought to Brazil using inappropriate visa classifications—a critical element of the human trafficking charges. Many reportedly believed they were coming for specialized technical roles, only to find themselves performing general construction labor under exhausting conditions.

Corporate Response and Damage Control

BYD's public response has been notably bifurcated. In international forums, the company has struck a conciliatory tone, acknowledging issues while emphasizing its commitment to human rights standards and cooperation with authorities. The company terminated its contract with Jinjiang Construction after the allegations surfaced.

In a December statement, a BYD representative maintained a "zero tolerance for violations of human rights and labour laws" while indicating the company would address allegations through proper legal channels.

However, some statements to domestic Chinese audiences have taken a different tone. In one instance, a company spokesperson dismissed earlier allegations as part of a campaign to "discredit" China and its businesses—a narrative that has drawn criticism from labor rights advocates.

"This dual messaging reflects a fundamental misunderstanding of the gravity of these violations," notes Carlos, a corporate ethics researcher. "Human trafficking isn't a public relations challenge—it's a profound moral and legal failure that demands genuine accountability."

Legal Demands and Compensation Structures

The Brazilian Public Labour Prosecutor's Office is seeking comprehensive remedies beyond the headline-grabbing 257 million reais in moral damages. Their demands include individual reparations for each affected worker and compliance with labor regulations going forward, with additional fines of 50,000 reais per violation multiplied by the number of workers impacted.

Prosecutor Fabio Leal has indicated that negotiations with the three companies began in late December 2024 but failed to reach a satisfactory resolution, prompting the formal lawsuit. Any compensation awarded would be allocated to the workers in China, with Brazilian authorities requiring proof of payment.

The legal challenge facing BYD extends beyond financial penalties. The human trafficking allegations could potentially trigger criminal investigations and permanently damage the company's ability to operate in Brazil, Latin America's largest economy.

Public Opinion: A Moral Litmus Test

The case has sparked intense public debate both in Brazil and China, with digital forums revealing nuanced perspectives on corporate accountability and labor rights.

In China, where BYD is often celebrated as a national champion, the majority of online commentators have sided with the exploited workers rather than the company. Many have rejected nationalist deflections, emphasizing that protecting labor rights should transcend brand loyalty or national pride.

"This case functions as a moral litmus test for how Chinese companies treat their own citizens abroad," explains Lin, a corporate governance specialist who tracks Chinese business expansions in Latin America. "The public reaction reflects deep concern over labor abuse, corporate accountability, and the human costs of aggressive global expansion strategies."

Some Chinese commentators have gone further, viewing the case as emblematic of broader problems with labor relations in global capitalism, suggesting that BYD's behavior represents an export of problematic labor practices.

The Broader Implications: A Turning Point?

As BYD faces this unprecedented legal challenge, the case raises profound questions about the future of international business practices, particularly for companies from emerging economies expanding globally.

"We're witnessing a potential inflection point in how labor standards are enforced across borders," says Eduardo, an international relations professor. "The willingness of Brazilian authorities to confront a powerful multinational suggests growing recognition that economic development must be balanced with social responsibility."

The unfinished factory in Camaçari stands as a physical reminder of what happens when that balance fails. For BYD, restoring its reputation and resuming its ambitious expansion may prove far more difficult than simply settling legal claims.

As one Brazilian labor inspector summarized: "This isn't just about one company or one construction project. It's about establishing that human dignity isn't negotiable, regardless of where capital flows from or to."