Brazil prosecutors sue Chinese carmaker BYD for violating labor rights

Brazilian labor prosecutors filed a lawsuit on Tuesday against Chinese carmaker BYD holding it responsible for human trafficking and "slavery-like conditions" for workers building a factory in its biggest market outside China.

The lawsuit seeks 257 million reais ($45 million) in moral damages from BYD and two contractors, JinJiang and Tecmonta, according to the statement from the labor prosecutors' office, along with individual compensation for workers.

Prosecutors are also looking to force the companies to comply with various labor rules and seek a fine of 50,000 reais for each breach, multiplied by the number of affected workers.

In response, BYD said it is committed to upholding human rights and respects Brazilian and international labor protections. The company also said in a statement that it has been cooperating with labor prosecutors and will respond to the lawsuit in court documents.

In December, prosecutors said 220 Chinese workers hired by BYD contractors in the Brazilian state of Bahia were found working in "slavery-like conditions." Prosecutors said they were also victims of international human trafficking.

Fabio Leal, a deputy labor prosecutor, said in an interview that talks with the three companies began in late December, but failed to reach an agreement. He declined to provide further details on why the talks were unsuccessful.

Leal said the workers were brought to Brazil illegally and promised working conditions that were not fulfilled. He said the Chinese workers, who have all returned to China, would receive any payouts from a lawsuit there, with the companies in Brazil responsible for providing proof of payment.

Leal added that a settlement is still possible, although now it will need to be facilitated through the court.

"Our lawsuit is very well-founded, with a substantial amount of evidence provided during the investigation process," he said.