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Cablegate: Usg and Gvn Conduct 2007 Labor Dialogue in Hanoi

DE RUEHHI #1836/01 2990557
P 260557Z OCT 07





E.O. 12958: N/A


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1. (SBU) Summary: The U.S. Department of Labor (DOL) and Vietnam's
Ministry of Labor, Invalids and Social Affairs (MOLISA) conducted
their fifth labor dialogue on October 22 in Hanoi. Deputy
Undersecretary of Labor for International Affairs (DUS) Charlotte M.
Ponticelli led the U.S. delegation and MOLISA Vice Minister Madame
Ba Huynh Thi Nhan led the Vietnamese side. They addressed labor
rights and enforcement, human resource development, forced labor
and child labor, trafficking in persons, industrial relations, and
occupational health and safety. While the GVN has made legislative
efforts to improve labor rights and enforcement over the preceding
year, including ratification of the ILO's Convention 29 on forced
labor, MOLISA officials said they lack the resources to enforce many
of the new laws. MOLISA asked the DOL for technical assistance and
capacity building in multiple areas. MOLISA claimed it has largely
stamped out child labor in the formal economy but said evidence of
the problem still exists in the informal sector - particularly in
the countryside. After the meeting, a GVN official told the DOL
that Vietnam's formal application for the Generalized System of
Preferences (GSP) was likely still two years away given the current
tone of the U.S.-Vietnam political relationship. DUS Ponticelli
invited Vice Minister Nhan to lead a delegation to the United States
in 2008 for the sixth Labor Dialogue in Washington, D.C. End

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2. (U) The DOL and MOLISA conducted a one-day labor Dialogue in
Hanoi on October 22 to discuss a wide range of labor issues. This
was the fifth such Dialogue since the DOL and MOLISA signed a
memorandum of understanding (MOU) regarding labor cooperation in
2000. The original MOU expired in 2005 and the two sides renewed
the agreement in a letter of understanding (LOU) signed in
Washington, D.C. in 2006. This year's Dialogue was an opportunity
for MOLISA to update the USG on progress made since the 2006 event.
The session was divided into briefings that addressed labor rights
and enforcement, human resource development, compulsory and child
labor, trafficking in persons, industrial relations, and
occupational health and safety. The discussion also touched on USG
policy in the area of foreign labor certification.


3. (U) Deputy Undersecretary of Labor for International Affairs
Charlotte M. Ponticelli opened the Dialogue with a courtesy call on
MOLISA's Vice Minister Madame Ba Huynh Thi Nhan, who led the
Vietnamese side at the Dialogue. DUS Ponticelli thanked Madame Nhan
for her ministry's cooperation and for playing host to this year's
event. She also acknowledged several positive new developments
since the 2006 Dialogue, including revisions to Vietnam's labor code
and the GVN's ratification of Convention 29 on forced labor,
bringing to five the number of core ILO conventions now ratified by
Vietnam. Ponticelli remarked, "The United States is committed to
working with Vietnam to continue to improve our relationship so that
we can address areas of mutual concern."


4. (SBU) Nguyen Kim Phuong, Deputy Director General of MOLISA's
Department of Legislation, opened the morning session with an update
on recent developments in labor rights and enforcement. On June 29,
2006, Vietnam's National Assembly passed amendments to Chapter 14 of
the national labor code that went into effect on July 1, 2007. The
revisions include the development of an unemployment compensation
system and vocational training program, and passage of a provision
that aims to clarify and simplify the procedures for authorizing,
calling, and settling labor disputes. Phuong said MOLISA is
disseminating the new information to Vietnam's workers via the press
and internet. Ponticelli observed that, during her visit to Ho Chi
Minh City, representatives from business raised the lack of clear
and regular communication between the GVN and industry, while
acknowledging that the government had recently begun to solicit
industry input.

5. (SBU) Phuong said MOLISA hopes to redevelop the entire labor code
by 2010, including introducing a common minimum wage for all
Vietnamese workers and adding a provision that would benefit people
with disabilities. MOLISA expects the minimum wage scheme, $38 per
month for workers at Vietnamese-owned firms and $62 per month for
employees of foreign-invested companies, to take effect on January
1, 2008, pending approval by the National Assembly. Moreover, he
said the GVN is currently considering ratifying the U.N. Convention
on the Rights of Persons with Disabilities and noted that Vietnam's
National Assembly recently approved a new law on gender and

HANOI 00001836 002.2 OF 004



6. (U) With its burgeoning young population and increasing numbers
of college graduates, Vietnam needs to create more than one million
new jobs each year. Nguyen Thi Hai Van, the Deputy Director General
of MOLISA's Department of Labor and Employment Policy, provided an
update regarding the GVN's efforts to meet this challenge. Vietnam
had no system of employment services before the late 1990s, but
started developing services at that time and has continued to do

7. (SBU) To facilitate job creation, she said MOLISA aims to
increase the capacity and the quality of Vietnam's job service
centers and create a nationwide network of vocational training
facilities, including 250 training schools and 600 training centers.
The centers will offer vocational training to jobseekers -
particularly ethnic minorities and rural workers displaced by
industrialization. Vice Minister Nhan cited construction,
steelwork, maritime, and information technology as areas
experiencing shortages of skilled labor. Van said the goal is to
increase the rate of skilled labor, currently estimated at just 30
percent of the workforce, to 40-50 percent in the coming years. She
said MOLISA would provide tuition loans to the financially destitute
and would pick up the tab for disabled and disadvantaged people,
including those in the most impoverished provinces. To achieve
these goals, Van said MOLISA would develop a national employment
database. She also requested DOL technical assistance with the
development of the vocational training centers and the training


8. (SBU) Phuong said MOLISA is currently working with the ILO to
implement and uphold the recently ratified Convention 29 on
compulsory labor and said MOLISA, with the ILO's assistance,
recently published a Q&A book on the topic. Moreover, he said the
ministry would soon organize a workshop for MOLISA's labor
inspectorate that will focus on forced labor and trafficking in
persons (TIP). He acknowledged that MOLISA must strengthen its
labor inspectorate by adding additional, "qualified" inspectors and
reforming its outdated auditing methods. He said that while the GVN
has largely stamped out child labor in the formal economy, evidence
of the problem still exists in the informal sector - particularly in
the countryside where 72 percent of Vietnam's population still

9. (SBU) While MOLISA is now the single ministry responsible for
eliminating child labor, Phuong said the ministry has a more limited
role in the area of trafficking in persons, including victim
reintegration and functioning as a national advisory body related to
the prevention of TIP. Phuong said the Ministry of Public Security
(MPS) is the formal line-agency responsible for trafficking
investigations and prosecutions. In a follow-up, Tran Phi Tuoc, the
Director General of MOLISA's International Cooperation Department,
said MOLISA, in conjunction with the Office of General Statistics,
would soon issue a report assessing the scope of the problem and his
government's efforts to combat it. Vietnam received a Tier 2
assessment on the 2006 and 2007 TIP Reports.

10. (SBU) Finally, Phuong thanked the USG for its support of Vietnam
and voiced hope that support would continue in the future. He said
while the GVN has made strong legislative efforts to improve labor
rights and enforcement, the country lacks the resources necessary to
enforce many of the new laws and needs capacity building in multiple
areas, including an outside assessment of the country's labor code,
assistance to develop unemployment compensation and social security
systems, and help establishing a vocational training program. For
her part, DUS Ponticelli thanked Phuong for his frank update and for
acknowledging the continuing child labor problem in Vietnam's
informal economy. She emphasized that public-private partnerships -
specifically compliance assistance programs coupled with enforcement
- have proven to be one of the most effective means to fulfill
commitment with concrete action.


11. (SBU) Turning to freedom of association and the rights of
workers, Nguyen Manh Cuong, Deputy Director of the Department of
International Cooperation at MOLISA, explained that while Vietnam's
workers have the right to collectively bargain, the challenge

HANOI 00001836 003.2 OF 004

remains finding a way to facilitate this right. He said while
passing new laws is easy, it will take several years of capacity
building to inform and empower Vietnam's workers sufficiently.
(Note: the GVN has not ratified ILO Conventions 98 and 127 on
freedom of association and collective bargaining and is not expected
to do so in the near future. End note).
In response, Ponticelli urged the GVN to continue its efforts to
guarantee freedom of association and formally recognize the right to
collective bargaining. With an eye to Vietnam's rapidly developing
services sector, however, she noted the shrinking role of unions in
the United States over the last several decades. Nevertheless, she
emphasized that U.S. workers have the right to unionize if they so

12. (SBU) In response to a query by Ponticelli, Cuong outlined the
role of the National Labor Relations Commission (NLRC) in developing
collective bargaining in Vietnam. He explained that the NLRC is not
a state body but rather a multi-sector commission whose members
include MOLISA, the Vietnam Chamber of Commerce and Industry (VCCI),
the Vietnam General Confederation of Labour (VGCL), and the Vietnam
Cooperative Alliance (VCA). According to Cuong, the commission's
primary task is to advise and support the Prime Minister on matters
of industrial relations.

13. (SBU) Finally, Cuong briefly described the ongoing collective
bargaining agreement (CBA) pilot project in southern Vietnam. The
project was one of six DOL-funded pilot projects agreed to under the
2000 MOU. While DOL funding has now ended, the government of Norway
has agreed to continue funding the CBA pilot project in ten
provinces. Cuong said many of the seventeen firms participating in
the pilot project are American companies including suppliers for
U.S. companies such as Nike.


14. (SBU) Mr. Vu Nhu Van, Deputy Director General of the Bureau of
Work Safety at MOLISA, outlined priorities in the area of social
protections including occupational health and safety (OHS). He said
by 2010 MOLISA aims to:
- Reduce the number of occupational accidents in high-risk
- Ensure that 100 percent of injured workers, including those
suffering from occupational diseases, receive treatment;
- Provide training to 80 percent of workers and officials employed
in hazardous positions;
- Ensure that 100 percent of occupational accidents are

15. (SBU) Van noted with some pride that the GVN was the first
country in Asia to ratify ILO Convention 155 on OHS and said that
Vietnam observes an Occupational Safety Week each year to raise
awareness of the issue. With WTO accession, Vietnam has new OHS
commitments and Van said MOLISA is currently reviewing policies to
ensure compliance. He requested USG support to build OHS capacity
in the areas of small and medium businesses, mining, construction,
and agriculture. He also requested technical assistance to help the
GVN establish a national compensation fund for occupational accident
victims. For her part, DUS Ponticelli described the DOL's
"compliance toolkit," which helps small and medium-sized businesses
in the United States reduce rates of occupational accidents and
diseases and comply with Occupational Safety and Health
Administration (OSHA) regulations. She also promised to communicate
MOLISA's requests for assistance to OSHA.


16. (SBU) The GVN hopes to send up to ninety thousand workers
overseas each year through 2010 to mitigate unemployment and develop
Vietnam's skilled labor pool. The majority of the 400,000 workers
now overseas are employed in Southeast Asia, although the GVN is
increasingly targeting wealthier countries such as Canada, Australia
and the United States. Ponticelli explained that while the DOL
could provide some information, that the Departments of Homeland
Security and State each have their own relevant laws and regulations
regarding guest-worker policy. Ponticelli and DOL Senior Adviser
Zhao Li, however, were able to answer many of MOLISA's guest-worker
questions and left behind informational booklets published by the
DOL's Employment and Training Administration (ETA) outlining USG
foreign labor certification procedures.

17. (SBU) Recently, there have been several well-publicized cases in
Vietnam of fraud committed by illegal export labor companies, or
"middlemen," who charge exorbitant fees to Vietnamese people who

HANOI 00001836 004.2 OF 004

seek to work abroad. In response to a query by the Embassy's
Economic Counselor, Nguyen Ngoc Quynh, MOLISA's Director General of
Overseas Labour, said that all export labor firms operating in
Vietnam are required to have a permit, issued by MOLISA. He blamed
much of the fraud on firms operating illegally without permits and
said MOLISA, in conjunction with the Ministry of Public Security, is
working to end the practice.


18. (SBU) The GVN's Ministry of Industry and Trade (MOIT) has
expressed a preliminary interest in qualifying for the U.S.
Generalized System of Preferences (GSP) program, which eliminates
duties on thousands of goods from beneficiary countries. Under GSP,
however, a beneficiary country must take steps to afford
internationally recognized worker rights and implement any
commitments it makes to eliminate the worst forms of child labor.
Near the end of the day's discussion, Cuong, the head of Industrial
Relations at MOLISA, acknowledged the critical role that labor
standards will play in any GSP negotiations. Cuong said he
"regretted" that the U.S. Trade Representative (USTR) could not
attend the Dialogue but said, "I hope that you will pass to the USTR
our readiness to dialogue on GSP and any labor issue." (Comment:
This was the only time that GSP came up during the formal session.
Moreover, MOLISA did not raise GSP during the earlier exchanges on
the agreed agenda. End comment.)

19. (SBU) Later that evening, however, at a reception in honor of
the Dialogue, Nguyen Ba Hung, the Acting Director General at the
GVN's Ministry of Foreign Affairs, Americas Department, told Senior
Adviser Zhao Li that formal application for GSP was likely still two
years away given the current tone of the U.S.-Vietnam political


20. (SBU) DUS Ponticelli thanked the Vietnamese delegation for their
participation and praised MOLISA's focus and level of preparation.
While the DOL has now implemented all six of the technical
assistance projects, she expressed hope that future cooperation
would take other forms, including exchanges and digital seminars.
For her part, Vice Minister Nhan also said she hoped bilateral
cooperation would continue. Ponticelli then invited Nhan to lead a
delegation to the United States in 2008 for the sixth Labor Dialogue
in Washington, D.C. In addition to the Dialogue itself, Ponticelli
said she hoped to organize relevant site visits for the Vietnamese

21. (SBU) After the closing remarks, the two sides summarized the
list of requests made by MOLISA to the DOL. These requests
- Providing information to MOLISA regarding the certification of
U.S. private sector export labor recruiting firms;
- Technical assistance to help MOLISA develop its vocational
training centers and training curriculum;
- Capacity building to help Vietnamese workers organize and
negotiate with employers;
- Providing information to MOLISA regarding the skills and trades
that U.S. private sector firms currently seek in hiring foreign
- Technical cooperation to improve Vietnam's occupational health and
safety framework;
- Capacity building for labor inspectors and labor enforcement; and
- Technical exchanges to help MOLISA develop a national social
security and pension framework.

22. (SBU) Comment: The tone of the Labor Dialogue was cordial,
constructive and informative throughout the day. While the Labor
Dialogue will continue with Vietnam on a non-project basis, many
opportunities exist for active cooperation. The U.S. Embassy in
Hanoi will continue to work with MOLISA and the GVN on labor issues,
particularly with a mind toward ratifying the remaining core ILO
Conventions on collective bargaining and freedom of association and
on other matters of mutual interest. End comment.

23. (U) DUS Ponticelli cleared this cable.


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