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Cablegate: The Second U.S.-Vietnam Labor Dialogue

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 04 HANOI 003252

SIPDIS

STATE FOR DRL/IL AND EAP/BCLTV
STATE PASS USDOL ILAB DUS LEVINE, LI ZHAO, BBUI
STATE ALSO PASS USTR FOR EBRYAN, BCLATANOFF
STATE ALSO PASS USAID FOR ANTOINETTE FERRARA

BANGKOK FOR USAID

E.O. 12958: N/A
TAGS: ELAB EAID ECON ETRD VM LABOR
SUBJECT: THE SECOND U.S.-VIETNAM LABOR DIALOGUE

REF: A) 02 STATE 53127 B) HANOI 2778

1. SUMMARY: The U.S. Department of Labor (USDOL) and
Vietnamese Ministry of Labor, Invalids, and Social Affairs
(MOLISA) held a half-day labor dialogue on November 6 in
Hanoi. This discussion, the second since the signing of a
Memorandum of Understanding (MOU) in November 2000, covered
Vietnam's wide-ranging efforts to improve labor conditions.
The two sides also discussed USDOL's technical assistance
program. END SUMMARY.

2. Vietnam's Vice Minister of Labor, Invalids, and Social
Affairs Nguyen Luong Trao began the second U.S.-Vietnam
labor dialogue (see ref A on the first labor dialogue) by
welcoming the U.S. delegation headed by USDOL Deputy Under
Secretary (DUS) Arnold Levine and expressing his condolences

SIPDIS
on the death of the DUS Thomas Moorehead. The two sides
then agreed on the proposed agenda of three principal
topics-labor standards, textile sector, and technical
assistance.

LABOR STANDARDS
---------------

3. ILO: VM Trao commenced the discussion of Vietnam's
implementation of labor standards by reviewing Vietnam's
cooperation with the International Labor Organization (ILO).
A member since 1992, Vietnam has worked closely and
effectively with the ILO on a diverse set of issues for over
a decade. The ILO was instrumental in the drafting of
Vietnam's first Labor Code adopted in 1994. After adopting
this Code, which VM Trao said the ILO considers progressive
and in line with international standards, Vietnam began
adopting ILO conventions. Currently, Vietnam has adopted 16
conventions, including 4 core labor conventions (Conventions
100 and 111 on discrimination and Conventions 138 and 182 on
child labor). Vietnam is also presently examining
Conventions 29 and 105 on forced labor.

4. In addition to this policy discussion and some technical
assistance (see ref B), Vietnam and the ILO are working with
the social partners on a "decent work agenda". ILO is using
development of this agenda with the Vietnam General
Confederation of Labor (VGCL) as an opportunity to use the
social dialogue "tool." In order to ensure the
effectiveness of social dialogue, the ILO and social
partners are developing a handbook, increasing the capacity
of partners so that they can become more involved and
tripartite cooperation will be improved.

5. NON-DISCRIMINATION: According to VM Trao, Vietnamese law
ensures equal employment opportunities for all members of
Vietnam's society. In addition, the GVN supports those who
are disadvantaged, such as women, the poor, and the
disabled. The GVN gives direct support to needy communes in
order to build public utilities, markets, schools, clinics,
and electricity and ensure minimum conditions for socio-
economic development. Finally, there is a national program
on employment and poverty reduction in order to provide
guidance for poor and needy households and help ensure
equality.

6. FORCED LABOR: Vietnamese law prohibits forced labor, and
the GVN is currently studying Conventions 29 and 105 for
adoption.

7. CHILD LABOR: Prohibited by Vietnamese law, VM Trao
asserted that no child labor exists in the formal sector.
In the informal sector and rural areas, children do work,
especially assisting with the harvest. Vietnam has
undertaken programs to eliminate this persistent child
labor, particularly focusing on needy families and orphans.
VM Trao explained that they are tackling this issue by
working to reduce poverty, improve education, and raise
awareness.

8. FREEDOM OF ASSOCIATION & COLLECTIVE BARGAINING: VM Trao
used the 2002 amendments to Vietnam's Labor Code (see ref B)
to highlight improvements in this area, including
strengthened rights to self-determination in collective
bargaining. The amendments limit the GVN's intervention in
labor relations, with its role evolving to one of
facilitator and inspector. Regarding collective labor
agreements, provincial labor authorities now just register
them, limiting interference to cases where the agreement is
unlawful. According to the Director of MOLISA's Legal
Department, enterprises view this change very positively.
He asserted that collective bargaining generally occurs in
foreign-invested enterprises.

9. Vietnam is also promoting public administration reform
in order to increase transparency and openness, thus
creating better conditions for employment. Improvements
have also been made by allowing more freedom in recruitment
decisions. (Note. This statement probably refers to the
amendment to the Labor Code that removes the requirement for
foreign-invested enterprises to recruit their employees
through a labor introduction agency. Foreign government and
non-governmental organizations must still use these
entities. End note.)

10. VM Trao further explained labor union operations in
Vietnam by first pointing out that labor is free to join
trade unions, but there is no requirement to do so. Within
six months of operations, enterprises must facilitate
employees' joining into a trade union. The union's
leadership is then elected, with the grassroots level
electing its executive board, which elects the provincial
executive board and so on up to the national level board.
According to VM Trao, no one has ever raised the idea of
establishing a new labor body, because an executive board
will not be reelected if its actions do not reflect the
interests of its membership.

11. Regarding tripartite cooperation in policy and law
making, Vice Minister Trao elaborated on the GVN's efforts
to implement eight new amendments. Under the new draft
decree guiding these provisions, any labor-related policy
must be considered by a drafting committee that involves
representatives of the government, employer organizations
(Vietnam Chamber of Commerce and Industry (VCCI) and Vietnam
Cooperative Alliance (VCA)), and employee organization
(VGCL). Throughout the process, they must gather inputs
from their respective constituencies and advise the GVN. In
addition to these legislative efforts, USDOL technical
assistance projects are assisting tripartism through their
structures that bring together the government, employers,
and employees to work on specific issues.

12. VOCATIONAL TRAINING: With up to 70 percent of Vietnam's
labor in rural areas and 60 percent involved in agriculture,
Vietnam's labor force is in transition. To succeed in its
goals of modernizing the economy and industrializing
agriculture, Vietnam must better train and equip its vast
rural work force through vocational training for all skill
levels. The GVN is attempting to assist with this process
by providing instructions to help training centers focus on
and identify developing sectors. These schools will conduct
surveys among employers to determine the types of labor
needed. Although they will also consider the workers'
desires, they will focus fundamentally on employers'
interests in order to ensure that training occurs in those
sectors with potential employment. In addition to training
centers, trade fairs are bringing together large numbers of
workers and employers, with up to 10,000 attending.

TEXTILE SECTOR
--------------

13. WORKPLACE CONDITIONS: VM Trao commenced discussion of
textile working conditions by highlighting the growth in
enterprise awareness on this subject. Employers
increasingly understand their responsibilities, especially
given Chapter 9 of the amended Labor Code which specifies
their requirement to provide good work safety. Businesses
are beginning to realize that improved working conditions
are good for both employers and employees due to the
increases in quality, efficiency, brand-name recognition,
competitiveness, markets, and ability to attract better
skilled labor. Therefore, the real situation in workplaces
is improving, with new, better factories being built and new
technologies introduced. A study of 12 companies found that
investment in work safety increased fourteen fold between
1998 and 2002. According to VM Trao, existing enterprises
are focusing this money on new restrooms, health clinics,
and cafeterias. In addition, they are working on improving
safety, hygiene, and sanitation, including air conditioning,
waste water treatment, and fire prevention. Of the workers
surveyed, 94 percent viewed working conditions as
significantly improved.

14. CORPORATE SOCIAL RESPONSIBILITY: Corporate social
responsibility (CSR) is coming to Vietnam in several ways.
VM Trao stated that suppliers are requiring some enterprises
to implement Corporate Codes of Conduct. For these
voluntary measures between trading partners, the GVN is only
providing information. VM Trao explained that these Codes
help enterprises strengthen awareness, increasing the
attention paid to labor conditions. Because most Code
provisions are in line with Vietnamese laws, their
enforcement is the same as enforcement of the nation's laws
and vice versa (i.e. a Code and the law reinforce each
other.). On the other hand, the GVN has found itself
explaining over the past few years that certificates, such
as SA8000, are not a pre-requisite to having a contract, nor
a legal requirement. It has tried to provide correct
information on the role of CSR and the importance of
improving work conditions.

15. INSPECTIONS: Responding to DUS Levine's query regarding
inspections, VM Trao described Vietnam's two-tiered system.
At the national level, MOLISA has a technical and safety
board while there are responsible sections of the provincial
labor authorities. VM Trao also stated that the total
manpower and quality of these forces must be increased.
Records regarding violations are kept at the local labor
department, along with recommendations regarding non-
conformity.

TECHNICAL ASSISTANCE
--------------------

16. Regarding USDOL's six technical assistance programs
(see ref B), VM Trao began by saying that they are now all
underway and are achieving good results although their
implementation dates varied due to technical reasons. He
generally observed that they are making important
contributions to the political process, citing the social
insurance project's assistance regarding Vietnam's new law
under consideration as an example. (Note. VM Trao explained
that there is presently no separate law on social insurance;
rather, social insurance is addressed within a chapter of
the Labor Code, with a focus on compulsory insurance and no
provision for voluntary kinds. End note.) These projects
are building the capacity of involved agencies and
enterprises through courses, study tours, and seminars. In
addition, some, such as the ones on employment service
centers (ESCs) and employment of persons with disabilities,
are helping centers and other stakeholders improve their
facilities and equipment.

17. DOLEP: The Director of MOLISA's Department on Labor and
Employment Policies (DOLEP) highlighted the very positive
results from the three programs in which his department is
involved (ESC, employment of persons with disabilities, and
child labor). Like VM Trao, he pointed out their essential
assistance to the policy making process. He also thanked
USDOL for the ESC study tour, explaining that it provided
important information on the potential role of ESCs, which
they were trying to adapt to Vietnam.

18. LEGAL DEPARTMENT: Responsible for the industrial
relations project, the Director of MOLISA's Legal Department
described the activities undertaken in the six months since
the launch, including seminars on collective bargaining and
dispute settlement and a study tour. He praised the project
for introducing officials from MOLISA, VCCI, VCA, and VGCL
to new approaches to building healthy work relations. In
addition, conciliators are being equipped with the necessary
skills to settle disputes. The project aims to improve
working relations and complements legal changes undertaken
in amendments to the Labor Code.

19. SOCIAL INSURANCE DEPARTMENT: The Deputy Director of the
Social Insurance Department emphasized the awareness raising
benefit of the social insurance project. Before 1995,
social insurance only existed for State-Owned Enterprises.
Since all workers are now entitled, they need to be informed
of their benefits. In addition to this awareness work, the
project is assisting on the policy front, as the GVN studies
how to expand the social insurance fund. During its
upcoming third year, the project will assist with
collections, payments, pensions plans, and the law on
unemployment insurance.

20. DEPARTMENT OF SOCIAL EVILS PREVENTION: The Deputy
Director of the Department of Social Evils Prevention called
the cooperation between MOLISA, VGCL, VCCI, and the staff of
the HIV/AIDS in the workplace project positive. He asserted
that the program is strengthening tripartite cooperation in
this field. Although just starting, the project is serving
as a catalyst in developing legal documents and policies.
Whereas previously HIV/AIDS was only viewed as a health
issue, it is now also understood as a social issue.
Officials and agencies involved also increasingly appreciate
the need for workplace-based programs thanks to the project.

21. FUTURE COOPERATION: Emphasizing the necessity of
ensuring that these programs are sustained, DUS Levine
expressed his hope that they will be embraced even once U.S.
funding ends. VM Trao agreed that MOLISA must ensure
sustainability, looking beyond implementation of the actual
projects. In conclusion, DUS Levine, thanked VM Trao for a
complete and candid explanation of developments and invited
him to the next dialogue in the U.S. or Vietnam on a
mutually agreed upon date.

22. This cable was cleared by DUS Levine.
BURGHARDT

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