BYD Sued By Brazil Prosecutors For Alleged Human Trafficking: Retail’s In Wait-And-Watch Mode

Brazilian labour prosecutors said on Tuesday that they have filed a public civil action against Chinese EV maker BYD Co (BYDDF) after 220 Chinese workers were found in conditions they term “analogous to slavery” at the company's upcoming plant in Camacari, in December.

A public civil action was filed in the Labour Court against BYD as well as contractors China JinJiang Construction Brazil and Tonghe Equipamentos Inteligentes do Brasil Co.

The prosecutors have requested that the Court order BYD and its contractors to pay 257 million Reais in moral damages in addition to damages to individual workers.

The prosecutors also argued that the companies should be fined 50,000 Reais for each labour regulation not complied with, multiplied by the number of workers affected.

In December, Brazilian authorities found 163 workers living in conditions it termed “analogous to slavery” at BYD’s upcoming plant in the state of Bahia. Subsequently, 57 Tonghe workers were also found in similar conditions, according to the authorities.  

The Labor Prosecutor’s Office alleged that the contractual terms of the employment relationship constituted forced labor and that their working conditions were “extremely degrading.” They also alleged that the workers were victims of international human trafficking.

BYD is the world’s largest EV maker and makes plug-in hybrids and battery electric vehicles, which are sold in China, Europe, and Brazil. The new plant in Brazil was expected to start making cars at the start of 2025, but the labor probe has delayed the timeline.

On Stocktwits, retail sentiment around BYDDF stayed unmoved within the ‘extremely bullish’ territory over the past 24 hours while message volume jumped from ‘high’ to ‘extremely high’ levels.

BYDDF shares have gained by about 61% this year and have more than doubled over the past 12 months.

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Exchange Rate: 1 Brazilian Reais = 0.18 USD