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Cablegate: Dol Hosts Sixth U.S.-Vietnam Labor Dialogue

VZCZCXRO3052
PP RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHC #7469/01 3092044
ZNR UUUUU ZZH
P 042033Z NOV 08
FM SECSTATE WASHDC
TO RUEHHI/AMEMBASSY HANOI PRIORITY 7948
INFO ASSOCIATION OF SOUTHEAST ASIAN NATIONS COLLECTIVE PRIORITY
RUEHHM/AMCONSUL HO CHI MINH CITY PRIORITY 2844

UNCLAS SECTION 01 OF 02 STATE 117469

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ELAB EAID ECON ETRD EINV WTRO VM
SUBJECT: DOL HOSTS SIXTH U.S.-VIETNAM LABOR DIALOGUE

1. (SBU) SUMMARY: Deputy Under Secretary of Labor for
International Affairs (DUS) Charlotte Ponticelli hosted the
sixth annual labor dialogue with Vietnam's Ministry of Labor,
Invalids and Social Affairs (MOLISA) on October 17, 2008, in
Washington. MOLISA Vice Minister Nguyen Thanh Hoa led the
Vietnamese side. Discussion focused on topics key to freedom
of association and the right to collective bargaining,
revision of the Vietnamese labor code, and possibilities for
cooperation on occupational health and safety and social
insurance. Vice Minister Hoa was vague in response to DOL
concerns over Vietnam's limits on freedom of association and
the rights to collective bargaining. Hoa emphasized that
Vietnam's Labor Code is still under revision and that the
Ministry of Internal Affairs is responsible for crafting the
legal framework for freedom of association. END SUMMARY.

FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING
--------------------------------------------- ---

2. (U) Deputy Under Secretary of Labor for International
Affairs Charlotte Ponticelli hosted the sixth annual labor
dialogue with Vietnam's MOLISA on October 17, 2008, in
Washington. MOLISA Vice Minister Nguyen Thanh Hoa led the
Vietnamese side. DUS Ponticelli opened the dialogue by
praising the August 2008 signing of a four year extension of
the Letter of Understanding (LOU) between DOL and MOLISA to
continue the labor dialogue process. She emphasized the U.S.
interest at this dialogue round to learn the extent of
Vietnam's freedom of association and independence of its
labor unions. (Note: While neither side discussed Vietnam's
Generalized System of Preferences (GSP) application, both
delegations were fully aware of the significance of labor
issues in that process. End Note.)

3. (SBU) Vice Minister Hoa explained that Vietnam's efforts
to reform its labor code aim at ensuring a market-oriented
approach while complying with international labor standards.
He also noted the GVN's interest in addressing worker rights
including freedom of association, collective bargaining, and
other issues related to workplace safety and social safety
net programs. So far, Vietnam has ratified 17 ILO
Conventions, including five of the eight Core Conventions.
He highlighted the government's June 2008 ratification of
Convention 144, which creates a system for tripartite
consultation.

4. (SBU) Under the current Vietnamese system, said Hoa,
MOLISA consults with workers and employees on policy and
legal issues. MOLISA is working to improve legal compliance,
increase inspections, and ensure that domestic law is
compatible with international labor law. All MOLISA legal
documents are now posted on the Ministry website for 60 days
for review, he added.

5. (SBU) On revision of Vietnam's labor code, Hoa explained
that the drafting committee includes government, worker, and
employer representatives, with the Vietnam General
Confederation of Labor (VGCL) serving as the voice of
workers. Workers and employers are consulted at all levels,
including through special one day sessions between the Prime
Minister and VGCL, and MOLISA and VGCL. NGOs are not on the
drafting committee, Hoa acknowledged, but he noted that draft
laws are posted on the MOLISA website for 60 days before
being forwarded to the National Assembly.

6. (SBU) DUS Ponticelli pressed on whether the Vietnamese
government would accept unions not linked to VGCL. Hoa
replied that Workers can establish trade unions at the local,
provincial and central levels, said Hoa, but all are under
the VGCL umbrella. Union representatives are elected at all
levels. Hoa also noted that the Vietnamese Union of Postal
Workers now has an international affiliation. He
acknowledged that the Ministry of Internal Affairs was in
charge of drafting Vietnam's new freedom of association law,
as the law would cover all associations -- not just those
related to industrial relations. He could not provide
details of the draft law or the status of the draft.

CAPACITY BUILDING, HR DEVELOPMENT
---------------------------------

7. (SBU) Vietnam's system allows for effective consultations
with workers and employers, said Hoa, but suffers from a lack
of capacity and a shortage of labor inspectors.
Specifically, he said, trade unions are inexperienced in
negotiating collective bargaining agreements, and sanctions

STATE 00117469 002 OF 002


for violations are insufficient.

8. (SBU) In reply to DUS Ponticelli's question about
MOLISA's plans for developing a workforce for the 21st
century, Hoa emphasized that the GVN sees human resource
development as the key. The government is implementing a
program of large-scale vocational training, with the initial
goal of training or re-training 40-50% of the workforce by
2010. The GVN is seeking to direct greater resources to
improvements in education and training at the central,
provincial, and local levels, said Hoa. The percentage of
GDP dedicated to education and training is expected to rise
from 6.7% in 2008 to 10% in 2009. Private sector resources
are also being mobilized for projects such as establishing
vocational training centers near industrial zones. The GVN
is backing the creation of these training centers by
providing land, tax incentives and soft loans for investors
and educational credits for trainees.

9. (SBU) Hoa added that migrant workers are entitled to
union membership, but that enforcement of this is inadequate.
He said the Ministry of Foreign Affairs has decreed that
Vietnamese embassies must have a Labor Division and be
prepared to protect Vietnamese workers overseas. Also, since
2006 laws permit sanctions of recruitment agencies with
illegal practices, but enforcement is a problem.

OCCUPATIONAL SAFETY AND HEALTH, SOCIAL INSURANCE
--------------------------------------------- ---

10. (SBU) At MOLISA's request, DOL gave a briefing on the
USG approach to promoting occupational safety and health.
The presentation emphasized the importance of record keeping,
inspections, enforcement and compliance, and the different
responsibilities of federal and state governments. MOLISA
questions focused on what were the most dangerous industries
in the U.S., and how OSHA offices are organized at the
regional level. Vice Minister Hoa stated that Vietnam has
only 300 labor inspectors for approximately 300,000
enterprises. Hoa said that the National Assembly had passed
legislation in 2006 on unemployment insurance which becomes
effective January 2009, and on voluntary social insurance
which became effective in January 2008. MOLISA is interested
in how the U.S. enforces employer contributions, said Hoa,
and would welcome any information on best practices in this
area.

THE WAY FORWARD
----------------------

11. (SBU) In closing, DUS Ponticelli and Vice-Minister Hoa
agreed that progress on labor issues was a step by step
process, but it was vital to continue moving ahead.
Atmospherics had been cordial and friendly throughout. DOL
and MOLISA identified three primary areas for future
cooperation: labor code reform, occupational safety and
health (OSHA), and social insurance. Cooperation on labor
code reform might include, as requested by the MOLISA
delegation: (1) A U.S. study tour by the Labor Code Drafting
Committee to the U.S.; (2) A joint workshop by U.S.
industrial relations experts; and (3) DOL provision of
written materials on labor code revision to Vietnam. On OSHA
and Social Insurance, DOL offered assistance to include: (1)
support in developing database and record keeping; (2)
technical exchange and cooperation in establishing and
managing a worker's compensation fund; (3) capacity training
for officers and inspectors; and (4) exchange of written
materials on best practices. DUS Ponticelli noted the l
lack of funding for DOL to conduct technical cooperation
activities but said that both sides should look at innovative
ways to conduct exchanges of information, experts and
relevant officials, which can be carried out with little or
no additional expenses.

12. (SBU) DUS Ponticelli and Vice Minister Hoa agreed that
the seventh labor dialogue will take place in Vietnam in
October 2009 at a date and site to be determined. They also
agreed to a progress review of the ongoing bilateral
relationship in six months by DVC or in person, either in the
U.S. or Vietnam.

13. (U) DUS Ponticelli cleared this cable.
RICE

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