Hungary’s Magyar government has begun more closely reviewing investment agreements concluded with China and other countries during the tenure of former Prime Minister Viktor Orbán as part of its policy of improving relations with the European Union.
Hungarian Foreign Ministry officials said at the end of July that the previous government had promised BYD a substantial amount of incentives that had not been disclosed to the public and had reached an agreement to admit approximately 10,000 Chinese workers into the country.
BYD factory and working conditions
BYD, which has established its European headquarters in Hungary, plans to begin production this year at its electric vehicle factory in Szeged. Allegations emerged that construction of the factory involved long working hours and unpaid overtime.
Some Chinese workers interviewed said they had been made to work seven days a week and up to 14 hours a day.
Former minister’s role at BYD under review
The decision by Péter Szijjártó, the former foreign minister under Orbán, to resign as a member of parliament in July and take an executive position at BYD also sparked controversy.
Szijjártó, who was alleged to have negotiated the terms of BYD’s investment in Hungary while in office, could be investigated over a potential conflict of interest. The Magyar government announced that it would review incentives, tax breaks, permits and publicly funded infrastructure work linked to BYD’s investment.
Fine imposed for transporting soil from factory site
BYD was found to have transported soil from its factory site to approximately 20 hectares of agricultural land without conducting the required tests. An investigation was launched after pollutants were found in part of the soil.
Subsequent tests determined that the pollution did not exceed legal limits. The company was nevertheless fined 10 million Hungarian forints, and the investigation continued.
BYD Vice President Stella Li said the company had complied with local rules and remained committed to its factory investment.
Regulations targeting Chinese companies
The Magyar government has begun withdrawing concessions granted to battery factories that violate environmental rules. Several Chinese companies were fined on the grounds of regulations concerning hazardous-waste storage and environmental violations.
