US embassy cable - 03HANOI3252

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