Volkswagen Facing Hefty Penalties for Using Forced Labor in Brazilian Operations
Volkswagen Faces Record Fine for Slave Labor Practices in Brazil
In a landmark decision, a labor court in Redenção, ParÑ, has ordered Volkswagen do Brasil to pay a fine of 165 million Reais (approximately 26 million Euros) for slave-like labor practices on an Amazonian farm. This fine is the highest ever imposed in Brazil for modern slavery.
The agricultural estate involved in the allegations is Fazenda Vale do Rio Cristalino, a subsidiary of Volkswagen do Brasil. The priest who documented the case in 2019 was Father Ricardo Rezende, the regional coordinator of the Land Pastoral Commission.
The investigations into the labor practices at Fazenda Vale do Rio Cristalino began in 2019. According to the prosecutor's office for labor, Volkswagen's Brazilian subsidiary is accused of benefiting from the illegal labor practices.
Investigators claim that armed guards and a system of debt bondage were used to prevent the workers from leaving the farm. Hundreds of temporary workers on Fazenda Vale do Rio Cristalino, also known as Fazenda Volkswagen, were allegedly subjected to long working days and degrading conditions. The labor exploitation is said to have occurred during the 1970s and 1980s.
Volkswagen do Brasil has announced an appeal against the fine and has stated that it upholds principles of human dignity and strictly adheres to all applicable labor laws and regulations. The company also stated that it was not directly involved in the management of Fazenda Vale do Rio Cristalino during the time period in question.
Fazenda Vale do Rio Cristalino was established with the support of the military dictatorship and tax incentives as part of a national strategy for the development and settlement of the Amazon region.
The lawsuit against Volkswagen do Brasil was initiated in December 2024, following out-of-court negotiations between the company and the prosecutor's office for labor that failed in 2023. Volkswagen has been ordered to apologize to the victims of the slave-like labor practices.
This case highlights the importance of corporate responsibility and the need for companies to ensure that their subsidiaries and partners adhere to ethical labor practices.
