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In CAMAÇARI, Brazil, on Jan 31 (Reuters) reported that Chinese workers tasked with constructing a new factory for electric car manufacturer BYD in northeast Brazil were paid approximately $70 for 10-hour shifts, more than double the hourly minimum wage in many parts of China. While this wage enticed many to sign up, leaving proved to be considerably more challenging.

The Chinese workers, employed by BYD contractor Jinjiang in Brazil, were required to surrender their passports, have the majority of their wages sent back to China, and provide an $900 deposit—only returnable after completing six months of work, as per a labor contract reviewed by Reuters.

The contract, detailing clauses that Brazilian investigators and Chinese labor law experts deemed illegal in both countries, revealed that the firm held the authority to unilaterally extend employment terms, issue fines for various infractions, and enforce strict regulations on behavior on and off the worksite.

Aaron Halegua, a lawyer well-versed in labor rights, noted that the contract contained clear indicators of forced labor. Such practices, as withholding passports or exacting security payments, are prohibited under Chinese law.

While Jinjiang disputed the allegations, stating that Brazilian inspectors had misconstrued the situation, BYD Brasil officials claimed ignorance of any violations until media reports surfaced in late November. Subsequent inspections revealed cramped living conditions for laborers and substandard accommodations.

Despite assertions by BYD that they were taking corrective measures, Brazilian authorities implicated BYD directly due to the actions of their subcontractor, Jinjiang.

The situation at BYD's Brazilian venture sheds light on the challenges faced when Chinese companies expand operations abroad, especially in terms of respecting local labor laws and fostering positive community relations.