Volkswagen subsidiary in Brazil faces $30 mn fine over modern slavery

German car manufacturer Volkswagen (VW) has been handed a massive fine in Brazil over allegations of modern slavery on an Amazonian farm during the country’s military dictatorship.

The Redenção labour court, in the Amazonian state of Pará, on Friday ordered VW’s Brazilian subsidiary to pay compensation of 165 million reais ($30.4 million) over the illegal exploitation of workers in the 1970s and 1980s, the Brazilian public prosecutor’s office for labour said.

According to the office, the fine is the highest ever imposed in Brazil for modern slave labour.

The VW subsidiary has announced it will appeal the decision.

“With a 72-year tradition, the company consistently upholds the principles of human dignity and strictly adheres to all applicable labour laws and regulations,” said Volkswagen do Brasil.

The allegations relate to conditions at the Fazenda Vale do Rio Cristalino farm, which belonged to a subsidiary of Volkswagen do Brasil.

The cattle farm was founded with the support of the military dictatorship as part of a national strategy to develop and colonize the Amazon region.

The investigation began in 2019 after priest Ricardo Rezende, then regional coordinator of the Rural Pastoral Commission, documented the case.

An out-of-court settlement failed in 2023. As a result, the company was finally sued in December 2024.

According to the allegations, hundreds of temporary workers at the farm, also known as Fazenda Volkswagen, were subjected to long working days and degrading working conditions.

Armed guards and a system of debt bondage prevented the workers from leaving the farm, investigators said.