Brazil's Ministry of Foreign Affairs announced a suspension of temporary work visas for Chinese electric vehicle producer BYD  following allegations of human trafficking and "slavery-like" labor conditions involving Chinese workers at a factory construction site in Bahia.

Labor authorities recently revealed that 163 Chinese workers had been brought to Brazil irregularly under such conditions at the site, operated by contractor Jinjiang Group. The contractor has denied any wrongdoing, claiming translation errors contributed to misunderstandings about the workers' conditions.

The workers, holding temporary work visas, were reportedly employed at BYD’s $620 million Bahia factory complex. Authorities said the factory, a symbol of China's deepening ties with Brazil, has become a focal point of international scrutiny.

In response, Brazil's Ministry of Justice stated it would revoke residence permits issued to the Chinese workers if the allegations are confirmed. This follows a prior request from the Justice Ministry to halt visa issuance, sent to the Foreign Affairs Ministry on December 20, before the findings were publicly disclosed.

BYD, whose vehicles have seen strong demand in Brazil, did not immediately comment on the visa suspension. However, Jinjiang Group, in a social media post shared by a BYD spokesperson, refuted the allegations, stating the conditions had been misrepresented.

BYD and Jinjiang have agreed to assist and temporarily house the 163 workers in hotels until an agreement on contract termination is reached, according to the Brazilian Labor Prosecutor's Office.

Brazil, BYD’s largest overseas market, accounted for nearly 20% of the company’s global sales outside China in the first 11 months of 2024. Despite the controversy, BYD plans to begin production at the Bahia facility in early 2025, with an expected annual output of 150,000 vehicles.

The developments have cast a shadow over BYD’s operations in Brazil and highlighted concerns about labor practices within global supply chains.