Brazilian authorities have halted construction of a factory for Chinese electric vehicle (EV) giant BYD, saying workers are living in conditions comparable to “slavery”.
More than 160 workers were rescued in the northeastern state of Bahia in Brazil, according to announcement of the Labor Prosecutor's Office (MPT).
They are said to have been placed in a “humiliating” environment and had their passports and wages withheld by a construction company.
BYD said in a statement that it had cut ties with the firm involved and remained committed to “full compliance with Brazilian law.”
The factory was supposed to be operational by March 2025. and was to be BYD's first EV plant outside of Asia.
The workers employed by Jinjiang Construction Brazil lived in four sites in the city of Kamasari.
At one such facility, workers were made to sleep on beds without mattresses, according to prosecutors.
Each bathroom was also shared between 31 workers, forcing them to get up very early to be ready for work.
“The conditions found in the housing revealed an alarming picture of insecurity and degradation,” MPT said.
“Slavery-like conditions,” as defined by Brazilian law, include debt slavery and work that violates human dignity.
The MPT added that the situation also amounted to “forced labour” as many workers had their wages withheld and faced exorbitant costs to terminate their contracts.
BYD said the affected workers have been moved to hotels.
He added that he had carried out a “detailed review” of the working and living conditions of the subcontractors' employees and had requested “on several occasions” that the construction firm make improvements.
BYD, short for Build Your Dreams, is one of the largest electric car manufacturers in the world.
It has sold more electric vehicles than Elon Musk's Tesla in the last three months of 2023, with the two fighting for the top spot in the sector.
The company is also expanding its presence in Brazil, which is its largest overseas market by a wide margin.
It first opened a factory in São Paulo in 2015, producing chassis for electric buses.
Last year, the company announced it would invest 3 billion reais ($484.2 million) in Brazil to build an electric car manufacturing plant.
Sales of electric cars in China have been boosted by government subsidies. which encourage consumers to replace their petrol cars with electric cars or hybrids.
But there is a growing backlash overseas against what some see as the Chinese government's unfair support for domestic automakers.
Major markets such as the US and the EU have imposed tariffs on electric cars from China, with more tariffs expected under the new administration of US President-elect Donald Trump.