By Waldaniel Amadis | 2025-01-28

SÃO PAULO -- Chinese automaker BYD has implemented strict surveillance measures to prevent information leaks following a report that a firm building a plant for the company in Brazil subjected workers to "slave-like conditions."

One detail -- that the 163 affected workers were all Chinese -- raised a long-standing issue in Brazil: the refusal of Chinese companies to hire Brazilians.

These heightened security protocols have sparked significant controversy and raised concerns about the working conditions of BYD employees in the country.

Following complaints and investigations into labor abuses, BYD implemented stringent security measures to exert tighter control over its employees, a mid-January report by the investigative journalism outlet Agência Pública revealed.

These actions were standard practices to safeguard industrial secrets, BYD claimed.

The measures include installing 135 surveillance cameras across various factory areas, such as administrative offices and warehouses, posting signs prohibiting photography within company premises and deploying special software on computers to monitor any external communications, the report said.

While BYD defended the measures as part of its "corporate responsibility" to protect confidential information, the timing of these actions has aroused suspicions and controversy.

BYD implemented the initiatives only after allegations of slave labor and human trafficking emerged, sparking accusations of internal persecution and attempts to suppress dissent.

Trafficking and labor exploitation

On December 24, Brazilian authorities announced they had discovered 163 Chinese workers in "slave-like conditions" at the electric car factory under construction for BYD by the Chinese company Jinjiang Construction in Camaçari, Bahia state.

This facility is expected to become BYD's largest electric car plant outside Asia, with an annual production capacity of 150,000 vehicles.

In response, BYD issued a statement the same day, announcing the immediate termination of its contract with Jinjiang.

The 163 endured appalling living conditions, including substandard housing, inadequate sanitation, severe overcrowding and instances of physical abuse, Brazil's Labor Prosecutor's Office found.

On December 27, federal prosecutors confirmed they were probing whether BYD committed additional crimes, including "international trafficking for labor exploitation," against the workers.

A risky gamble

With an announced investment of 5.5 billion BRL (about $915 million) and the ambition to transform Camaçari into a cutting-edge technological hub, BYD's facility has garnered strong support from both local and federal authorities.

However, the fallout from the accusations has cast serious doubt on the company's reputation and the viability of the project, which is projected to generate up to 20,000 direct and indirect jobs in Brazil.

Entorno spoke with automotive market analysts who unanimously agreed that, beyond the recent scandal, BYD took a significant gamble by importing 100,000 vehicles ahead of the implementation of a 10% tariff on electric vehicles in January 2024 -- later raised to 18% in July.

BYD sought to flood the Brazilian market with Chinese electric cars before the higher tariffs took effect.

While BYD led Brazil's electric vehicle sales in 2024 with a 70% market share (76,713 units registered), the overall market remains modest, accounting for just 2% of all cars sold in 2023.

"Storing cars outdoors at ports, exposed to the weather and depreciating daily even while new, was a risk by BYD," said Adelmo Tiburcio, a car dealer in São Paulo. "But the recent revelations of slave labor could significantly impact sales in the coming months, further compounding the gamble."

A market in infancy

One key challenge to the adoption of electric vehicles in Brazil is the country's underdeveloped charging infrastructure, said Tiburcio.

Brazil has only 3,000 public charging stations, concentrated in major urban centers like São Paulo, Rio de Janeiro and Brasília.

Highways and smaller cities remain largely underserved, limiting the practicality of electric cars for much of the population.

For automotive engineer Ciro Tajiri, the recent scandal underscores the broader complexities and contradictions tied to Chinese investments in Brazil.

"These events bring ethical, legal and economic concerns to the forefront and cast doubt on the ability of Chinese multinationals to adhere to Brazilian labor standards," Tajiri told Entorno.

Employing Brazilians to build the BYD factory could have provided significant benefits, including increased income, community development and vocational training in Bahia -- a region known for its high poverty levels, analysts said.

Instead, the heavy reliance on Chinese labor has provoked criticism and bypassed opportunities to strengthen the local economy.