Volkswagen faces historic $30 million penalty for ‘exploiting’ workers in Brazil's Amazon

Brazil’s labor court on Friday has ordered Volkswagen to pay 165 million reais (approximately $30 million) in a landmark ruling for collective moral damages after workers were subjected to slave-like conditions at a company-owned farm in Amazon during the 1970s and 1980s.

According to prosecutors, this is the largest reparation of its kind in the country’s history, AP reported.

Decades old abuses come to light

The investigation into Volkswagen's subsidiary-owned farm in Para state was initiated in 2019 by the Labor Prosecutor’s Office. The investigation was prompted by extensive documentation provided by a local priest who had tracked the case for decades. Following further inquiries and witness testimony, Volkswagen was formally charged in 2024.

The court accepted the charges that hundreds of workers were subjected to degrading conditions between 1974 and 1986 at the farm which was used for cattle ranching and logging.

The farm employed about 300 workers under irregular contracts to clear the forest and prepare pastures. They were monitored by armed guards and forced to stay on the farm under debt bondage. Other than that, they were also allegedly given “unsafe housing and insufficient food” which is required for healthy survival. Workers who contracted diseases such as malaria were not given any medical care, AP said in a news report.

Court's ruling

Judge Otavio Bruno da Silva Ferreira's ruling confirmed that the farm belonged to Volkswagen and that the conditions met the legal definition of slave labor.

“These practices constituted one of the largest cases of slave labor exploitation in Brazil’s recent history,” the Labor Prosecutor’s Office said in a statement, quoted by AP.

“Slavery is a ‘present past,’ because its marks remain in Brazilian society, especially in labor relations,” Ferreira wrote, adding that understanding this legacy is crucial for understanding current realities and guiding antidiscrimination judgments.

Volkswagen to appeal the decision

Volkswagen’s Brazilian headquarters released a statement after the ruling, saying that it will appeal the court's decision. The company asserted that in its 72 years of operation in Brazil, it has “consistently defended the principles of human dignity and strictly complied with all applicable labor laws and regulations.”

“Volkswagen reaffirms its unwavering commitment to social responsibility, which is intrinsically linked to its conduct as a legal entity and employer,” AP said, citing the company's statement.

Brazil has a history of enslaving more people from Africa than any other country, according to estimates from the Trans-Atlantic Slave Trade database. It was the last country in the Western Hemisphere to abolish slavery, in 1888.