Volkswagen, the German automaker, has been ordered to pay a hefty compensation as it acknowledged the illegal exploitation of local workers during Brazil's military dictatorship.
According to DPA and the Associated Press on the 30th (local time), the Labor Court in Hedenção, Pará, Brazil, ruled on the 29th that Volkswagen's subsidiary must pay 165 million reais (approximately 42.3 billion Hanwha) to workers. The Brazilian Labor Prosecutor's Office emphasized that this amount is the largest among compensations related to modern slavery in the country.
Volkswagen operated the Vale do Rihu Crystal Farm in Pará from 1974 to 1986. It is reported that over 300 informal workers there were subject to inhumane treatment. They endured unstable housing and food shortages under the surveillance of armed guards and did not receive treatment even when suffering from malaria. The workers were effectively captive on the farm to pay off their debts, a situation that the International Labour Organization (ILO) regards as debt bondage forced labor.
Volkswagen's modern slavery farm became known to the public after Father Ricardo Rezende, who was engaged in rural pastoral activities, tracked it down for decades after hearing testimonies from escaped workers in 1983.
The farm was reportedly supported by the then Brazilian military dictatorship, which promoted Amazon development as a national strategy. It was revealed that Volkswagen collaborated with the military regime from 1964 to 1985 to suppress anti-establishment workers at its local factories, resulting in a compensation payment of 5.7 million euros (approximately 9.3 billion Hanwha) in 2020.
Volkswagen has stated that it will appeal, saying, "We consistently uphold the principle of human dignity and strictly comply with all relevant labor laws and regulations."