Brazil suspended the construction of BYD's factory on the grounds of poor labor conditions, according to a release on the official website of the Brazilian Ministry of Public Labor (MPT) on December 23. The announcement said that 163 workers at BYD's factory in Camazari were living in difficult conditions, and gave the judgment that all accommodations had serious infrastructure and sanitation problems.
The workers are employees of the Brazilian branch of Jinjiang Construction Group, which provides outsourced services to BYD, and the workers live in four dormitories in Camasari. Following the announcement by the MPT, BYD announced on its official website that it had decided to terminate its cooperation with Jinjiang company.
As BYD's outsourcing service provider in Brazil, Jinjiang company had been involved in a dispute with a local hotel over “payment disruptions and breach of contract”. If this is true, it suggests that BYD has not done its due diligence well on its overseas investments.
BYD Brazil's "labor dispute" could be a wake-up call for companies going overseas that is they need to pay close attention to ESG so as to better achieve global market expansion. Enterprises must comply with local laws and regulations to ensure that all of their operations are conducted within the legal framework, avoiding negative issues in the supply chain such as human rights violations, environmental pollution, damage to labor rights, and commercial bribery, while improving the efficiency and sustainability of the entire supply chain.
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