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Cablegate: Vietnam National Assembly Passes New Labor Laws

VZCZCXRO6137
RR RUEHHM
DE RUEHHI #3019/01 3491030
ZNR UUUUU ZZH
R 151030Z DEC 06
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 4130
INFO RUEHHM/AMCONSUL HO CHI MINH 2241
RUEHC/DEPT OF LABOR WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RHEHNSC/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHGV/USMISSION GENEVA 1153

UNCLAS SECTION 01 OF 02 HANOI 003019

SIPDIS

SENSITIVE BUT UNCLASSIFIED
SIPDIS

STATE FOR EAP/MLS AND DRL MITTELHOUSER
COMMERCE FOR 4431/MAC/AP/OPB/VLC/HPPHO
LABOR FOR LI
STATE PASS USTR

E.O. 12958: N/A
TAGS: ELAB ECON PGOV ETRD EIND EINV VM
SUBJECT: VIETNAM NATIONAL ASSEMBLY PASSES NEW LABOR LAWS

SENSITIVE - DO NOT POST ON INTERNET

REF: A) HANOI 3012; B) HANOI 2050

1. (SBU) Summary: The National Assembly passed two important pieces
of labor legislation in its fall session, one governing labor
disputes and another regulating the country's burgeoning export
labor industry. Labor experts note that the new strikes law could
help open the door to greater freedom of association by allowing
worker representatives who are not members of the Communist
Party-controlled labor union to negotiate labor disputes in some
circumstances. The new law on export labor, meanwhile, creates some
protections for the growing number of Vietnamese who go overseas to
work. The law is a general disappointment to many labor and human
rights experts, however. That said, the implementing decrees must
still be written for both laws, providing a final chance for the
international community to weigh in on these issues before the laws
come into effect on July 1, 2007. End Summary.

LAW ON STRIKES
--------------

2. (SBU) During its recently ended fall session, the National
Assembly amended Chapter 14 of Vietnam's labor code, a section of
the law covering the legal process for resolving industrial
disputes. The law was drafted in the wake of a surge in labor
unrest in late 2005 and early 2006 and is meant to clarify the
procedures for holding strikes legally. The redraft was deemed
necessary because all but a handful of the 1,200 strikes in Vietnam
in 1995 have technically been illegal due to their failure to follow
a heretofore lengthy and complicated dispute resolution process.

3. (SBU) The new Chapter 14 allows worker representatives for the
first time to negotiate for workers in disputes at enterprises where
no union is present. In the past, the Vietnam General Confederation
of Labor (VGCL), the Communist Party-controlled labor union, was the
sole organization allowed to represent workers in industrial
disputes. While the law does not allow for independent unions, it
states that the negotiation of disputes can be led and organized by
"relevant entities" when the enterprise in question does not have a
union. "Where a union doesn't exist, the workforce can select its
own representative to organize and lead the dispute. It is a big
step," said Dang Duc Son, Director of the Legal Department at the
Ministry of Labor, Invalids and Social Affairs (MOLISA), who
assisted in the law's drafting. Son noted that 60-70 percent of the
foreign-invested enterprises and private firms in Vietnam are not
unionized, "so in these we have created a new mechanism for the
organization and leading of strikes."

4. (SBU) The International Labor Organization (ILO) lauded the
change. "These are small steps in the evolution of the right to
association," said Jan Sunoo, Chief Technical Advisor of the ILO's
Vietnam Industrial Relations Project. VGCL lobbied aggressively to
become the required worker representative in all disputes, but was
rebuffed by the increasingly independent National Assembly. It will
be necessary to wait until the implementing decrees for the law are
written to fully understand the law's effectiveness or impact, Sunoo
pointed out. The law will come into effect on July 1, 2007.

5. (SBU) A key feature of the amended law is that it shortens the
time for resolving disputes by half and divides labor disputes into
those over rights and those over interests. Disputes over rights,
which MOLISA's Son said are "by law violations of the law," must be
routed through a "conciliation council" composed of worker
representatives and the enterprise in question, or, if the council
cannot resolve the issue, to the Provincial People's Committee
Chairman. Workers can appeal the chairman's decision to a court or
have the right to go on strike, Son said.

6. (SBU) In disputes over interests, meanwhile, workers must take
their claims through a process involving a conciliation council and,
if no resolution is obtained, a provincial arbitration council
before a legal strike can be held. MOLISA's Son stated that the
government would begin an information campaign to educate workers
about the new code, with the Vietnam Chamber of Commerce and
Industry (VCCI) and the VGCL contributing. The Prime Minister will
also chair a forum, to be attended by VCCI and VGCL, to help spread
understanding of the new law, he added.

EXPORT LABOR LAW

HANOI 00003019 002 OF 002


----------------

7. (SBU) The law "On Vietnamese Labor Working Abroad by Contract,"
also passed in late November and coming into effect on July 1, 2007,
seeks to regulate enterprises and protect workers participating in
Vietnam's growing export labor industry. Some 400,000 Vietnamese
citizens are currently employed outside of the country and the
government is seeking to encourage another 80,000 to 90,000
Vietnamese each year between 2006 and 2010 to do the same. Most
workers are now employed in Taiwan, Korea and Malaysia, but the GVN
is looking further afield, and particularly to the Middle East
(Saudi Arabia, Bahrain and the United Arab Emirates) and Western
countries (France, Canada and the United States), for further
opportunities.

8. (SBU) Amid the industry's growth, news reports and human rights
groups have cautioned against ramping up the industry without also
providing robust worker protections. In particular, human rights
groups and news reports have noted increasing numbers of Vietnamese
workers who have been charged upwards of $7,000 for the opportunity
to work abroad, fees which mean workers can only begin to cover
after one or sometimes two years abroad. Reports of bonded labor,
sex trafficking and the lack of resources available to workers in
distress have also emerged.

9. (SBU) The new law provides terms for the provision and revocation
of labor export licenses for enterprises, sets out various worker
protections and specifies a range of obligations upon workers
themselves engaging in the industry. The National Assembly has not
yet issued a final copy of the law, but Vu Dinh Toan, Deputy
Director General of the Department of Overseas Labor at MOLISA,
provided Econoff a verbal outline. Noting that the regulations of
the Philippines and Thailand were used as examples, Toan said the
law contains provisions requiring overseas labor firms to inspect
conditions at workplaces and bear the costs of returning critically
ill or deceased workers to Vietnam.

10. (SBU) Other provisions continue an already existing fund,
supported by export labor firms and the government, to support
workers in distress, Toan continued. Labor export firms will be in
charge of handling worker disputes abroad and "Labor Administration
Boards" (which already exist in Vietnamese embassies in major
labor-receiving countries) will handle worker matters that cannot be
solved by export labor firms. Firms found violating the law can be
fined, have their licenses revoked or, for individuals at firms
involved in severe violations, held criminally liable. The
implementing decree for the law will create ceilings upon the
various fees that workers will pay and set out the required
contributions to the worker protection fund, Toan added.

11. (SBU) Experts noted the law falls far short of their hopes.
Andy Bruce, Chief of Mission at the the International Organization
of Migration (IOM), told Econoff privately he felt the language on
worker protections was weak and vague, and that export labor firms
had probably successfully limited the terms on protection provided
in order to make their operations easier and more profitable. Such
limits were of interest to the GVN, he said, because its main
interest is to increase the size of the industry.

12. (SBU) Other experts, commenting on earlier drafts that appear
almost identical to the final based on Econoff's discussions with
MOLISA, have noted that the law contains no sanctions for corruption
in the governmental administration of the programs, no clear
procedures for the remediation of disputes, and no clear standards
for the screening of firms engaged in brokering labor contracts.
The law also does not provide any extra resources or funding for the
Vietnamese embassy Labor Administration Boards charged with handling
worker cases and contains a range of stiff penalties placed for
workers who violate their contracts.

13. (SBU) Comment: The next six months will provide an important
opportunity for the international community to influence the
implementing decrees for the both the export labor and strikes laws.
On export labor, Post plans to continue pressing for adequate
worker protections. In regard to the strikes law, it will remain
important to work to ensure that the government does not walk back
the new right given to workers who are not union members to mediate
their own disputes. End Comment.

MARINE

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