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Cablegate: Encouraging Tip Progress in Vietnam

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





E.O. 12958: N/A

REF: A. Moeling-Dunlap email 7/26/04 B. Hanoi 1190

1. (SBU) Summary: To provoke the changes necessary to
graduate Vietnam off the TIP Watch List, the USG should
encourage greater protection of workers while staying out of
the sensitive debate over the character and desirability of
the labor export sector in Vietnam. We should push hard on
areas where there is consensus on what Vietnam can do
(ratification of UN Protocols, signing of a trafficking MOU
with Cambodia, creation of labor export regulations that
protect workers, increasing prosecutions of traffickers,
increasing training for anti-TIP officers, improving
coordination to protect victims, establishing a national
plan of action to prevent trafficking, for example) and take
a wait-and-see approach on areas where there is disagreement
about what Vietnam can or should do (specific instructions
regarding the restructuring of the labor code.) In terms of
tactics, to prevent a counterproductive Vietnamese reaction
to U.S. "demands" we should avoid presenting our
recommendations as a quid-pro-quo. End summary.

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2. (U) Embassy has reviewed a draft copy of the proposed TIP
action plan for Vietnam (ref A) and has the following
specific comments and recommendations, keyed to the text.

3. Embassy response to emailed proposed G/TIP action items
for Vietnam to be removed from the TIP Tier 2 Watch List:


4. (SBU) Proposed:
-- Pass a comprehensive law against labor trafficking. This
law should define involuntary servitude and debt bondage.

Embassy response:
The process of passing new legislation in Vietnam is
incredibly complex and time-consuming, requiring a multi-
year process of consensus-building. In addition, Vietnam
completed (and passed) a comprehensive new labor law in
2003; it is therefore at the bottom of the legislative
priority list. It would be more realistic for us to suggest
that the GVN create comprehensive regulations on the export
of labor to prevent trafficking. The regulations are
necessary to implement the new labor law, and achievable in
a reasonable timeframe. As such we would be asking the GVN
to do something within its power.

5. (SBU) While Vietnamese law does not refer specifically to
debt bondage or involuntary servitude, Article 71 of the
Constitution of 1992 guarantees the "inviolability of the
person and the protection of the law with regard to his
life, health, honor and dignity" and Article 123 of the
Penal Code sets out criminal penalties for those who
"illegally arrest, hold in custody or detain other persons."
This is sufficient in Vietnam to criminalize slavery and
debt bondage.

We recommend changing this action to:

-- Create comprehensive regulations on the export of labor
to prevent trafficking and the abuse of workers.

6. (SBU) Proposed:
-- Provide protection for victims of labor trafficking,
including the protection from retribution by the offending
labor company or employer.

Embassy response:

The GVN response to this is likely to be "we do this
already." Under the penal code, retribution is illegal and
the victim has the right to lodge a complaint with the
Ministry of Public Security or the police if his rights or
freedom have been violated. The degree to which this is an
effective remedy is a function of the health of the overall
Vietnamese justice system, and not of the GVN's willingness
to tolerate trafficking. The GVN is likely to challenge us
to provide examples or evidence that labor trafficking
victims have been subject to retribution, and at the moment
we will have a hard time providing that. The only support
post has seen for the "retribution" accusation has been the
claims that Daewoosa victims were sued to recover the amount
of their settlement checks and that they believe they have
been denied employment as a result of the case.
As reported Ref B, an Embassy inquiry (with the cooperation
of the Ministry of Labor and the Hanoi Lawyers Association)
has demonstrated conclusively that the Daewoosa victims who
were the defendants in a government-supported civil suit to
recover the amount of their settlement awards had received
interest-free loans against the settlement amount in excess
of the actual amount and had pledged the settlements
themselves as collateral for those loans. The labor
companies were allowed to bring the suit only after the
victims refused to honor the terms of the initial promissory

7. (SBU) Regarding the claims of labor trafficking victims
being unable to find employment after returning to Vietnam,
this problem is not unique to the victims and should not be
considered retribution. A July, 2003 case study on labor
export in Vietnam done under the auspices of the UNDP Asia
Pacific Regional Initiative on Trade, Economic Governance,
and Human Development, which surveyed households in a rural
district of Ho Chi Minh City (Cu Chi) with a high level of
participation in temporary overseas employment (TOE)
revealed that only five percent of TOE participants found
employment as "workers" after returning home. The rest
either returned to the fields, took up previous jobs as
public officials, engaged in self-employed handicrafts or
trading, or (in 25 percent of cases) were unemployed. The
25 percent figure is in notable contrast to the 5 percent of
respondents who indicated that they were unemployed before
going overseas to work.

We recommend removing this action from the list.

8. (SBU) Proposed:
-- Provide greater protection for Vietnamese workers sent
abroad by state-controlled labor export companies,
an adequate mechanism for addressing worker complaints and
assuring them they will not be punished for raising
complaints (vice the current practice of deporting
in contracts with state-owned companies: eliminate up-front
fees for "processing" and transportation that are most often
a contributing factor to debt bondage; and the elimination
or reduction in the financial penalties for failure to
complete the duration of the contract (suggest using a
bonus/incentive system instead).

Embassy response:

The reform of Vietnam's enterprise laws is opening up a
great number of industries - including labor export - to the
private sector. We do not want protection for workers
limited to those sent abroad by state-owned companies, so we
propose dropping "state owned".

9. (SBU) Embassy agrees with recommending the creation of an
adequate mechanism for addressing worker complaints. We
recommend removing the specific reference to "punishment for
raising complaints" and the reference to "deporting
troublemakers." The reason for this is that the GVN is
working hard to combat the perception in key labor consuming
countries (particularly Taiwan and Korea) that Vietnamese
workers are an immigration risk. The current terms of labor
export contracts with Taiwanese and Korean companies and
Vietnamese workers stipulate that the workers may remain in
Taiwan and Korea only as long as they are filling the
position specified in the company specified in the contract.
According to Andy Bruce, IOM's Chief of Mission in Vietnam,
dissatisfied workers do not have the option to move to
another company within Korea or Taiwan - if they do so, they
become illegal workers in those countries.

10. (SBU) This system seriously reduces the power of
individual workers, giving them the option to either accept
the current situation, return to Vietnam, or become illegal
workers in Taiwan or Korea. For Vietnam, accepting these
terms is the price of competing with Thailand, the
Philippines, Indonesia, and China for labor export markets.
The deportation of workers who are involved in disputes with
their employers overseas is a host-country decision and not
within the GVN's power to change. We should leave it out of
our action plan.

11. (SBU) Regarding contracts with labor export companies
(again, we should eliminate "state-owned"), we are concerned
that we are involving ourselves too deeply in a complicated
debate over the nature of labor export in general. A number
of experts, including the drafters of the UNDP study
mentioned above and the drafters of a confidential January,
2004 study by the French Government, have noted the burden
on workers that the high cost of securing a contract to go
overseas represents. The studies suggest - but do not
conclude - that the debt that workers take on encourages
them to break their labor export contracts in favor of more
lucrative market-rate jobs once they reach the destination
country. The result of this is to expose the workers to the
risks of living in a country illegally and to aggravate
tensions between the host governments and the GVN, which is
then criticized for allowing its citizens to illegally
immigrate and break labor contracts.

12. (SBU) We have discussed this phenomenon with a variety
of interlocutors, including such recognized trafficking
experts as IOM and UNICEF, and the unanimous conclusion is
that while these fees may create problems for workers and
the labor export system, they do not represent a causal
factor for labor trafficking.

13. (SBU) One reason for this is that the debt that workers
take on in order to purchase a TOE contract is not held by
or connected to the labor export company or to the future
employer. The UNDP study determined that 60 percent of
households with people engaging in labor export sell assets
to raise the necessary funds. 67.5 percent borrow money
from relatives at an average rate of 6.12 percent per year,
and 30 percent borrow from banks at a rate of 12.12 percent
per year. Loans from the labor export company or the
employer are not listed as financial sources for
participating in TOE at all. ("Other sources" is a category
that might represent loans from the labor export company or
the employer. However, it includes only 2.56 percent of
households.) Our conclusion is that while indebtedness may
be factor limiting the options of Vietnamese laborers
abroad, neither the employers nor the labor export companies
control that indebtedness. The laborers have limited
financial options, but are not in a condition of debt

14. (SBU) We note that in all of our discussions about the
high cost of securing TOE, none of our interlocutors have
mentioned trafficking as a consequence. As the French put
it, "it is because of the high cost of leaving to work
abroad that most Vietnamese workers leave the enterprise to
take illegal but better-paying work. It is said that if the
cost of leaving were less, there was no corruption and the
selection could be done in a transparent manner - perhaps a
lottery system - more Vietnamese workers would respect the

15. (SBU) In fact, in our increasingly extensive review of
the situation of Vietnamese export laborers, the only case
of labor exploitation rising to the level of trafficking
that we can find occurred more than four years ago - the
Daewoosa case. Other cases involving abuse of the labor
export system involve defrauding workers, stealing money
from them, sending them to export labor markets without
actual jobs, abandoning them overseas, absconding with their
salaries, or misrepresenting the actual nature of work. We
have seen no cases - reported or confirmed - involving
involuntary servitude of Vietnamese workers since the
Daewoosa case of 1999.

16. (SBU) What we have seen is a systematic effort by the
GVN to clean up the labor export system and find a way to
achieve the benefits of labor export (hard currency
remittances, reduced demand for social services, lower
unemployment, and technology transfer) while minimizing the
negative impacts on workers. Mark Sidel, a professor of law
at the University of Iowa and a severe critic of the
existing labor export system in Vietnam, acknowledged this
in a paper he gave at a 2003 legal reform conference, saying
"at the central government level, many honestly do wish to
maintain an appropriate, even just balance between law as
the protector of rights under a marketizing system, and law
as the facilitator and accelerator of that market growth."
Sidel ultimately criticized the effectiveness of this effort
(his central thesis was that corrupt local officials,
police, and labor export companies profit handsomely from
Vietnamese export labor) but did not dispute the central
government's desire to minimize abuses.

17. (SBU) Considering the sensitive and fundamental nature
of the debate over the balance between protecting workers
and ensuring that contractual obligations with receiving
countries are honored, and the fact that the current system
has produced only one known trafficking case more than four
years ago, we recommend changing this action to:

-- Provide greater protection for Vietnamese workers sent
abroad by labor export companies, including:
an adequate mechanism for resolving disputes between workers
and labor export companies;
reform of the system of fees and penalties paid by workers
to minimize the financial pressure on workers that can lead
to abusive situations.

18. (SBU) Proposed:
-- Use existing laws to increase investigations, arrests,
and prosecutions of traffickers.

Embassy concurs.

19. (SBU) Proposed:
--Train police and immigration officials, judges, and
elected officials on trafficking issues and how to deal with
victims of labor and sex trafficking. Incorporate
trafficking in persons training at the Ministry of Public
Security to train law enforcement officials. Provide
information on how many officers received the training and
on how the training is being implemented in the field.

Embassy recommends moving this entire action to the
"consider for action" section vs. the "must do" section. We
believe the GVN has already begun doing this in cooperation
with the UNODC on a U.S.-funded project, and the recent
expansion of the anti-trafficking special units to cover the
entire country is a welcome development.

20. (SBU) Proposed:
-- Adopt a national action plan to combat trafficking in

Embassy concurs.

Embassy also concurs with all "consider for action" areas,
and recommends adding "Vietnam should ratify as soon as
possible the Protocol to prevent, suppress and punish
trafficking in persons, especially women and children, of
the UN Convention against Transnational Organized Crime."

21. (SBU) Tactically, we must ensure that the presentation
to the GVN is not perceived as a USG ultimatum. If the
action plan comes off as a threat to keep Vietnam on the
Watch List or downgrade it to tier 3 if certain benchmarks
are not met, the GVN will reject it. Even if the actions
suggested are positive ones the GVN is inclined to carry out
anyway, the offices and individuals working on TIP issues
cannot afford to be seen to be giving in to USG demands.
The GVN has demonstrated that it is independently committed
to tackling the TIP problem, and we can present the action
plan as a USG recommendation of areas on which the GVN can
focus its efforts. If we try to use it as a "stick" to
compel GVN action, we will certainly be disappointed.

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