Volkswagen’s Brazil unit has been ordered to pay 165 million reais ($30.44 million) in damages for subjecting workers to slavery-like conditions on a farm during the 1970s and 1980s, labour prosecutors said on Friday.

A Brazilian labour court ruled that hundreds of workers at a Volkswagen-run ranch were forced into degrading work, subjected to debt bondage and kept under armed surveillance.

Volkswagen stated that it intends to appeal the decision.

The company’s cattle ranching and logging activities in the Amazon during that period were supported by government incentives under Brazil’s military dictatorship, forming part of a broader state plan to develop the region.

Prosecutors said the ruling followed failed settlement talks, in which Volkswagen “showed no interest” in reaching an agreement.

As part of the court’s order, Volkswagen must publicly acknowledge its responsibility, issue a formal apology, and implement a “zero-tolerance” policy against slave labour.

In a statement, Volkswagen said it “consistently defends the principles of human dignity and strictly complies with all applicable labour laws and regulations.”

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