Author: Fabio Teixeira
RIO DE JANEIRO (Reuters) – 163 Chinese workers found by Brazil’s labor ministry in what it described as “slavery-like conditions” at a factory site owned by Chinese electric vehicle maker BYD ( SZ: ) have been removed and taken to hotels, while officials are negotiating with BYD and Jinjiang Group on further measures to protect them, authorities said.
The growing controversy in the carmaker’s biggest foreign market has put the spotlight on the conditions of migrant workers in the northeastern Brazilian state of Bahia. A deal with labor plaintiffs involving BYD and Jinjiang Group could be signed as early as January 7, when they are scheduled to meet.
Earlier this week, the labor prosecutor’s office described the workers, hired by Chinese construction company Jinjiang Group, as victims of human trafficking. The company denied passports to 107 workers, investigators said.
Slavery investigations can have strong consequences for employers in Brazil, including limiting their access to bank loans.
Jinjiang denied any wrongdoing, while BYD said it had severed ties with Jinjiang. Both companies are cooperating with authorities in the investigation.
Jinjiang said, in a social media post relayed by a BYD spokesman, that describing workers’ conditions as “slavery-like” was inaccurate, while BYD’s CEO said the media and other groups were “deliberately smearing Chinese brands and the country and undermine the relationship between China and Brazil.”
If labor inspectors accuse the two companies of subjecting workers to slavery-like conditions, they could be added to Brazil’s so-called “dirty list” – a public list of employers deemed responsible for such allegations.
While company names are added to the list only after all appeals have been exhausted, which can take years, once a company is listed it remains for two years. In addition to the significant reputational risk posed by the “dirty list”, companies on it are also prohibited from obtaining certain types of loans from Brazilian banks.
Companies can avoid being placed on the “dirty list” by signing an agreement with the government to change their practices and compensate workers whose rights have been abused.
Companies and executives are also subject to legal action. Prosecutors monitoring labor issues can sue companies found to have abused workers’ rights, unless they agree to pay compensation to the Brazilian government and victims.
Separately, federal prosecutors may also pursue criminal charges against executives. Charges of human trafficking and holding workers in slavery-like conditions carry sentences of up to eight years in prison.
Federal prosecutors have already asked labor bodies to share evidence they have collected against BYD and Jinjiang Group, according to a statement from the Labor Prosecutor’s Office on Thursday.
NEGOTIATIONS BEGIN
Labor inspectors are now negotiating with companies to compensate workers whose rights they believe have been abused. This could include payment for missed wages and severance pay. Workers will also receive unemployment benefits.
“The efforts of government bodies at the moment are focused on victims and guaranteeing victims’ rights,” said Mauricio Krepsky, former head of Brazil’s Department of Inspection for the Eradication of Slave Labor (DETRAE), a government body that includes labor inspectors.
Victims of human trafficking can choose to stay in Brazil or return to their countries, said Ludmila Paiva, co-founder of I-MiGR, a non-profit organization that develops projects and research on human trafficking.
During Thursday’s meeting, BYD has a labor prosecutor’s office. has already agreed to buy tickets and cover up to $120 in travel expenses to return to China for seven employees scheduled to return on January 1, according to a statement from the Brazilian
Negotiations between labor authorities and companies suspected of subjecting workers to degrading conditions could take months, depending on the complexity of the case, the number of victims involved and whether or not the companies cooperate with authorities, experts told Reuters.
If companies are indicted, it could be years before their names are added to the list, as companies can complain internally to the government or file lawsuits to keep their names off the list.
