US embassy cable - 01HANOI1026

C O N F I D E N T I A L  HANOI 001026 
 
SIPDIS 
 
STATE FOR DRL/IL, EB/TPP/BTA/ODC AND EAP/BCLTV 
STATE PASS TO USTR/ CAROYL MILLER AND JOE DAMOND 
USDOL FOR ILAB/ JPERLMUTTER, RSHEPARD, GRUSSELL, 
NSAYRES 
NSC FOR THE EAST ASIA DIRECTORATE 
 
E.O. 12958: DECL: 05/03/2011 
TAGS: ELAB, PREL, PHUM, ETRD, VM, LABOR 
SUBJECT: SOME HILL STAFFERS PUT HIGH PRIORITY ON WORKERS RIGHTS DURING RECENT VISITS TO VIETNAM 
 
REF: HANOI 0641 
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1.  (U) CLASSIFIED BY ECONOMIC COUNSELOR ROBERT W. 
DRY, REASON 1.5 (B) AND (D). 
 
2.  (C) SUMMARY: RECENT CONGRESSIONAL VISITS TO 
VIETNAM GAVE HIGH PRIORITY TO LABOR ISSUES.  IN 
MEETINGS WITH VIETNAMESE OFFICIALS AND THE ILO, THE 
VISITORS HEARD WHAT VIETNAM IS DOING TO MOVE FORWARD 
IN WORKERS RIGHTS AND WHAT MORE VIETNAM PLANS FOR THIS 
AREA.  SEVERAL STAFFERS SYMPATHETIC TO THE LINKAGE OF 
LABOR OBLIGATIONS AND TRADE AGREEMENTS FOCUSED ON 
DEVELOPING IDEAS ON HOW THIS MIGHT BE ACCOMPLISHED IN 
THE VIETNAMESE CONTEXT.  THEY LEARNED FROM THEIR 
DISCUSSIONS THAT ANY SUCH EFFORTS WOULD BE A 
DIFFICULT, IF NOT IMPOSSIBLE, UNDERTAKING WHICH WOULD 
LIKELY JEOPARDIZE VIETNAM'S PROGRESS ON TRADE 
LIBERALIZATION AND OUR ABILITY TO MOVE THE VIETNAMESE 
FORWARD ON LABOR ISSUES IN THE CHANNELS WE CURRENTLY 
HAVE.  NONETHELESS, WE FOUND LISTENING TO THEIR 
CONCERNS USEFUL.  ON THE OTHER HAND, WE ARE A BIT 
CONCERNED HOW THE GVN WILL INTERPRET THIS RATHER 
CANDID DISCUSSION ABOUT THE NEED FOR LABOR PROGRESS BY 
CERTAIN MEMBERS OF CONGRESS.  THE GVN'S GOAL IS TO SEE 
THE BTA RATIFIED AS EXPEDITIOUSLY AS POSSIBLE.  THE 
LABOR DISCUSSION MAY HAVE FURTHER HEIGHTENED ANXIETY 
ABOUT THE TIMING OF BTA RATIFICATION.  END SUMMARY. 
 
3.  (U) POST HOSTED A VISIT BY REP. PHILIP CRANE (R- 
IL) APRIL 10-15 AND A STAFF DELEGATION LED BY EARNEST 
"CHUCK" CHARLES ATKINS, CHIEF OF STAFF FOR REP. BART 
GORDON (D-TN) APRIL 15-19.  DURING BOTH OF THESE 
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VISITS, LABOR ISSUES AND WORKERS' RIGHTS WERE GIVEN 
HIGH PRIORITY.  (SEE SEPTELS FOR OTHER REPORTS ON THE 
DELEGATIONS' VISITS.)  VIETNAMESE OFFICIALS RESPONDED 
BY ARRANGING SURPRISINGLY HIGH LEVEL MEETINGS GIVEN 
THAT MOST SENIOR OFFICIALS WERE THEN DEEPLY INVOLVED 
IN IMPORTANT MEETINGS IN THE RUN-UP TO THE NINTH PARTY 
CONGRESS.  REP. CRANE AND HIS DELEGATION MET WITH THE 
FIRST VICE MINISTER FROM THE MINISTRY OF LABOR, 
INVALIDS AND SOCIAL AFFAIRS (MOLISA) MR. NGUYEN LUONG 
TRAO, AS WELL AS THE DIRECTOR OF THE ILO HANOI OFFICE, 
MS. ROSEMARIE GREVE.  INTERESTED MEMBERS OF THE 
STAFFDEL ALSO MET WITH MR. TRAO AND MS. GREVE.  IN 
ADDITION, THEY MET WITH VICE CHAIRMAN DR. DANG NGOC 
CHIEN OF THE VIETNAM GENERAL CONFERDERATION OF LABOR. 
 
4.  (SBU) THE DELEGATION MEMBERS THAT TOOK THE 
GREATEST INTEREST IN THE WORKERS RIGHTS TOPIC WERE 
STAFFDEL MEMBER MR. TIM REIF, DEMOCRATIC CHIEF TRADE 
COUNSEL, AND CODEL MEMBER MS. VIJI RANGASWAMI, 
DEMOCRATIC TRADE COUNSEL, BOTH OF THE HOUSE WAYS AND 
MEANS COMMITTEE.  BOTH WERE ATTEMPTING TO GATHER 
INFORMATION TO SUPPORT A PLAN TO LINK PASSAGE OF THE 
BTA TO VIETNAMESE AGREEMENT TO NEGOITATE A DOCUMENT, 
PREFERABLY A TEXTILES AGREEMENT, WHICH WOULD OBLIGATE 
VIETNAM TO IMPROVE ITS PROTECTION FOR WORKER RIGHTS, 
THEREBY BRINGING IT MORE CLOSELY INTO LINE WITH 
INTERNATIONAL LABOR STANDARDS.  MS. RANGASWAMI TOLD 
POST'S LABOR OFFICER PRIOR TO EMBASSY'S COUNTRY TEAM 
MEETING, THE OPENING EVENT OF MR. CRANE'S VISIT, THAT 
HER GOAL WAS TO 'FIND A SOLUTION' TO THE VIETNAM 
'LABOR ISSUE' DURING THE TRIP. 
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5.  (SBU) MS. ANGELA ELLARD, STAFF DIRECTOR FOR THE 
WAYS AND MEANS COMMITTEE, ALSO PARTICIPATED ACTIVELY 
IN THE LABOR-ORIENTED PORTION OF THE SCHEDULE, SHAPING 
QUESTIONS THAT DREW ATTENTION TO WHAT THE VIETNAMESE 
WERE DOING THEMSELVES TO MAKE PROGRESS IN THIS AREA, 
AS WELL AS THE WORK THAT IS BEING DONE UNDER OUR 
BILATERAL MEMORANDUM OF UNDERSTANDING (MOU)ON LABOR 
COOPERATION AND DIALOGUE.  IN THE MEETING WITH MOLISA 
VICE MINISTER TRAO, SHE SAID THAT MEMBERS BELIEVED THE 
MOU WAS AN "EXCELLENT BASIS FOR MOVING FORWARD ON 
LABOR ISSUES".  MIKE MESSMER, STAFFER FOR RICHARD 
GEPHARDT (D-MO), ALSO PARTICIPATED IN THE STAFFDEL'S 
LABOR MEETINGS. 
 
6.  (U) WE THOUGHT BOTH MEETINGS WITH MOLISA VICE 
MINISTER TRAO WENT WELL.  AFTER BRIEF INTRODUCTORY 
REMARKS, TRAO INVITED THE VISITORS TO POSE QUESTIONS. 
AFTER LISTENING TO A SERIES OF QUESTIONS, HE DEFTLY 
ADDRESSED THEM WHILE PROVIDING INSIGHT INTO THE GVN'S 
EFFORTS TO REFORM AND IMPROVE THE LABOR LAW AND 
WORKERS PROTECTIONS.  IT WAS CLEAR FROM HIS 
PRESENTATION THAT, WITH OVER A MILLION NEW ENTRANTS 
INTO THE JOB MARKET ANNUALLY, HIS GOVERNMENT GAVE TOP 
PRIORITY TO EMPLOYMENT GENERATION.  BUT, HE ALSO MADE 
IT CLEAR THAT THE GOVERNMENT TOOK AN INTEREST IN THE 
QUALITY OF THOSE JOBS AND IN THE MANNER WORKERS WERE 
TREATED ON THE JOB.  HE TOLD BOTH DELEGATIONS THAT THE 
GVN WAS CIRCULATING FOR COMMENT DRAFT AMENDMENTS TO 
THE LABOR CODE WHICH WILL BE SUBMITTED FOR REVIEW TO 
THE NATIONAL ASSEMBLY IN MAY.  AND, IF ALL GOES WELL, 
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IT WOULD BE SUBMITTED FOR FINAL ASSEMBLY APPROVAL BY 
MAY 2002.  HE ALSO NOTED THAT VIETNAM WAS AN ILO 
MEMBER, HAD RATIFIED 15 CONVENTIONS, THREE OF WHICH 
WERE CORE CONVENTIONS, AND THAT VIETNAM PLANNED TO 
RATIFY TWO ADDITIONAL CONVENTIONS IN THE NEAR FUTURE, 
INCLUDING CORE CONVENTION NO. 138 ON THE MINIMUM AGE 
FOR WORK.  MOREOVER, HE SAID HIS GOVERNMENT WAS FULLY 
AWARE OF THE NEED TO STUDY RATIFICATION OF THE 
REMAINING CORE CONVENTIONS AND, WHERE THE GOVERNMENT 
IS NOT YET IN COMPLIANCE, TO BEGIN INCORPORATING THEIR 
OBLIGATIONS INTO THE DOMESTIC LABOR SYSTEM.  TRAO 
SPOKE HIGHLY OF INITIAL PROGRESS UNDER THE U.S.- 
VIETNAM MOU AND SAID THAT HIS GOVERNMENT LOOKED 
FORWARD TO THE COMPLETION OF THE SPECIFIC PROJECT 
PROPOSALS DEVELOPED IN MARCH (REF) THAT WOULD BREATHE 
LIFE INTO THE PROJECT PLAN. HE STRESSED HIS 
APPRECIATION FOR THE "COOPERATIVE APPROACH" ON LABOR 
ISSUES. 
 
7.  (SBU) IN THE STAFFDEL MEETING WITH TRAO, TIM REIF 
NOTED THAT THE U.S. HAD INCLUDED LANGUAGE ON TRADE AND 
LABOR STANDARDS IN RECENT TRADE AGREEMENTS, INCLUDING 
THE FREE TRADE AGREEMENT WITH JORDAN AND THE TEXTILES 
AGREEMENT WITH CAMBODIA.  HE ADDED THAT MANY MEMBERS - 
NAMING CHARLES RANGEL (D-NY) AND GEPHARDT, 
SPECIFICALLY - EXPECT THAT ONE OF THESE WILL SERVE AS 
A MODEL FOR "HOW WE DEAL WITH THE LABOR STANDARDS 
ISSUE WITH VIETNAM."  FURTHERMORE, HE SUGGESTED IN 
THIS MEETING AND OTHERS THAT RESOLUTION OF LABOR 
ISSUES WAS REQUIRED BEFORE THE U.S.-VIETNAM BILATERAL 
TRADE AGREEMENT (BTA) WOULD BE SENT TO THE HILL FOR 
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APPROVAL (SIC).  TRAO EXPRESSED GRATITUDE FOR MEMBERS' 
FOCUS ON VIETNAM'S LABOR REGIME.  BUT, HE SAID HE WAS 
SURE THAT WHEN MEMBERS AND THEIR STAFF STUDIED 
VIETNAM'S "PROGRESSIVE" LABOR CODE THEY WOULD BE 
CONVINCED TO SUPPORT THE BTA.  HE PLEDGED TO WORK WITH 
THE U.S. TO PROVIDE INFORMATION THAT WAS NEEDED ON 
VIETNAM'S LABOR REGIME IN PREPARATION FOR THE VOTE ON 
THE BTA'S PASSAGE IN CONGRESS. 
 
8.  (C) AFTER THE MEETING, KEY MOLISA CONTACT NGUYEN 
MANH CUONG (PLEASE PROTECT) REMARKED PRIVATELY TO 
ECONOFF THAT TRAO'S REMARKS WERE INTENDED TO CONVEY 
THE MESSAGE THAT THE GVN WOULD NOT AGREE TO CHANGES IN 
VIETNAM'S LABOR REGIME AS CONDITIONS FOR APPROVAL OF 
THE BTA.  FURTHER, HE WARNED THAT, IN HIS OPINION, ANY 
LINKAGE OF LABOR TO ANY FUTURE TRADE AGREEMENT, 
INCLUDING THE TEXTILES AGREEMENT, WOULD BE 
"IMPOSSIBLE" AND MIGHT JEOPARDIZE NOT ONLY CONCLUSION 
OF THAT AGREEMENT BUT ALSO VIETNAM'S OWN APPORVAL OF 
THE BTA.  EVEN WORSE, HE FEARED THAT SUCH ACTION MIGHT 
INDUCE A DECISION TO SLOW OR HALT THE COOPERATION ON 
LABOR ALREADY UNDERWAY. 
 
9.  (U) ILO HANOI DIRECTOR GREVE BRIEFED THE 
DELEGATIONS ON THE ILO'S VIEWS ON VIETNAM'S LABOR 
REGIME AND THE TECHNICAL ASSISTANCE THE ORGANIZATION 
IS UNDERTAKING.  SHE ADMITTED CANDIDLY THAT VIETNAM'S 
LABOR REGIME FELL SHORT OF INTERNATIONAL LABOR 
STANDARDS BUT ASSERTED THAT VIETNAM HAD MADE 
SIGNIFICANT PROGRESS IN IMPROVING COMPLIANCE SINCE RE- 
JOINING THE ILO IN 1992.  MOREOVER, SHE SAID THAT THE 
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COUNTRY WAS "COMMITTED" TO GRADUALLY AND DELIBERATELY 
CONTINUING TO BRING LABOR RIGHTS MORE CLOSELY INTO 
COMPLIANCE WITH INTERNATIONAL STANDARDS.  IN RESPONSE 
TO QUESTIONS ABOUT ADDITIONAL PRIORITY AREAS IN WHICH 
VIETNAM NEEDED AND WAS PREPARED TO ACCEPT ILO 
TECHNICAL ASSISINTACE, MS. GREVE LISTED STRENGTHENING 
LABOR STATISTICS AND MARKET INFORMATION AND COLLECTIVE 
BARGAINING, ESPECIALLY AT THE ENTERPRISE LEVEL.  AS 
THE ILO IS NOT A FUNDING AGENCY, SHE NOTED THAT 
FUNDING FOR SUCH PROJECTS MUST COME FROM MULTILATERAL 
OR BILATERAL DONORS. 
 
10.  (SBU) THE STAFFDEL MEETING WITH VIETNAMSES LABOR 
CONFIDERATION (VGCL) VICE CHAIRMAN CHIEN PROVIDED A 
PICTURE OF HOW THE LABOR CONFEDERATION ENVISIONS ITS 
ROLE AND WHAT IT THINKS ARE SOME OF THE PROBLEMS 
FACING VIETNAMESE WORKERS.  IN HIS REMARKS, CHIEN 
REFLECTED THE VGCL'S TRADEMARK SCHIZOPHRENIA BETWEEN 
 
OLD ATTITUDES AND METHODS, WHICH CHARACTERIZED TRADE 
UNION ACTIVITY IN VIETNAM'S COMMAND ECONOMY AND A 
GROWING UNDERSTANDING OF AND DESIRE TO ADAPT THE LABOR 
REGIME TO CHALLENGES PRESENTED BY THE MORE MARKET- 
ORIENTED ECONOMY OF TODAY.  WHEN SPEAKING ABOUT THE 
TRADE UNION'S ROLE, HE STATED IT IN TERMS OF VGCL'S 
RESPONSIBILITY TO SUPPORT THE NATION'S ECONOMIC GOALS 
OF EXPANDED GROWTH AND JOB CREATION BY "SUPERVISING 
AND REPRESENTING THE INTEREST OF LABORERS." 
NEGOTIATION AND CONCILIATION WITH EMPLOYERS ON THE 
WORKERS BEHALF SYMBOLIZED THE VGCL'S PREFERRED 
APPROACH TO ADDRESSING LABOR DISPUTES. 
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11. (SBU) HOWEVER, ON SEVERAL OCCASIONS, CHIEN NOTED 
PROBLEMS THAT FACE WORKERS AND BY EXTENSION THE VGCL, 
ESPECIALLY, HE CLAIMED, IN FOREIGN-INVESTED 
ENTERPRISES (FIE'S).  SOME EMPLOYERS FAVOR SHORT-TERM 
CONTRACTS EVEN WHEN THE WORKERS ARE CLEARLY LONG-TERM 
EMPLOYEES.  SOME EXPECT WORKERS TO WORK MORE OVERTIME 
THAN THE 200 HOURS/YEAR PERMITTED UNDER THE LABOR CODE 
THEREBY FAILING TO CREATE NEW JOBS.  (NB:  THIS 
REQUIREMENT IS FAR BELOW THE ILO/SA8000 STANDARD OF 
600 HOURS/YEAR OVERTIME AND THERE HAVE BEEN CALLS FOR 
ITS REVIEW DURING THE COMMENT PERIOD ON THE DRAFT 
LABOR CODE AMENDMENTS.  IT APPEARS THE INTENT OF 
LIMITING THE NUMBER OF OVERTIME HOURS IS LESS WORKER 
PROTECTION THAN A DESIRE ON THE PART OF THE GOVERNMENT 
TO FORCE EMPLOYERS TO CREATE MORE JOBS.)  CHIEN NOTED 
CASES EXIST IN WHICH OWNERS AND MANAGERS DISCOURAGED 
THE ESTABLISHMENT OF THE FORMATION OF UNIONS BY THE 
VGCL IN THEIR ENTERPRISES.  HE ALSO SAID THAT THE 
PENALTIES FOR ENTERPRISES THAT VIOLATE THE LABOR CODE 
WERE NOT HIGH ENOUGH TO ACT AS A SIGNIFICANT 
DETERRENT.  OTHER PROBLEMS INCLUDED FAILURE TO PAY TET 
HOLIDAY BONUSES, INSUFFICIENT COMPENSATION FOR 
OVERTIME, AND AN UNDULY STRESSFUL WORKLOAD.  (COMMENT: 
THESE SAME PROBLEMS EXIST IN THE DOMESTIC PRIVATE 
SECTOR AND, TO SOME EXTENT, IN THE STATE-OWNED 
ENTERPRISES, BUT MANY LABOR OFFICIALS, IN BOTH THE 
VGCL AND MOLISA, TEND TO RAISE THESE ISSUES ONLY IN 
THE CONTEXT OF FIE'S.  END COMMENT.) 
 
12  (C) COMMENT: THESE VISITS AFFORDED THE EMBASSY A 
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WELCOME OPPORTUNITY TO INTERACT WITH IMPORTANT 
CONGRESSIONAL STAFFERS INVOLVED IN THE DEBATE ON THE 
LABOR DIMENSIONS OF TRADE. SEVERAL OF THESE STAFFERS 
ON BOTH DELEGATIONS SEEMED TO OPERATE UNDER THE 
MIQAKEN ASSUMPTION THAT THE EMBASSY IS IN A POSITION 
TO JOIN IN FORMULATING A LABOR STRATEGY THAT COULD, AT 
LEAST IN PART, BE COMPLETED PRIOR TO A VOTE ON THE 
BTA.  ONE OF THESE STAFFERS CONTINUES TO TELEPHONE 
REGARDING LABOR ISSUES IN VIETNAM.  WE HAVE REPEATEDLY 
MADE IT CLEAR WE ARE NOT IN A POSITION TO MAKE POLICY 
COMMITMENTS; THIS IS NOT OUR ROLE IN THE FIELD. 
RATHER THIS IS A JOB FOR THE ADMINISTRATION, OF WHICH 
WE ARE A VERY SMALL PART.  HOWEVER, WE SHARE WITH 
THESE STAFFERS INTEREST IN ASSURING THAT VIETNAM'S 
WORKERS ENJOY PROTECTIONS AND THAT THEY WILL NOT 
SUFFER ANY DETERIORATION IN THEIR SITUATION AS A 
RESULT OF THE BTA COMING INTO FORCE.  YET, WE HAVE 
CONSISTENTLY ARGUED THAT TO LINK TRADE BENEFITS TO 
PROGRAM ON LABOR WILL TORPEDO THE BTA AND TRADE 
LIBERALIZATION GENERALLY IN VIETNAM.  THE VIETNAMESE 
WILL NOT STAND FOR IT AND WE THINK VIETNAM'S SITUATION 
IS SUFFICIENTLY UNIQUE THAT A COOKIE CUTTER TEXTILE 
AGREEMENT MODELED ON THE ONE THE U.S. ENTERED INTO 
WITH CAMBODIA IS THE WRONG APPROACH FOR VIETNAM.  THE 
BILATERAL MOU ON LABOR WITH THE VIETNAMESE IS OFF TO A 
GOOD START.  IF THE ADMINISTRATION DETERMINED THAT 
LABOR RIGHTS IN VIETNAM NEED FURTHER BOLSTERING, WE 
RECOMMEND ATTEMPTING TO FUND ADDITIONAL PROJECTS UNDER 
THE MOU.  SEVERAL STAFF MEMBERS' DESIRES TO LINK BTA 
PASSAGE WITH GREATER PROGRAMS ON WORKERS' RIGHTS WAS 
NOT LOST ON THE VIETNAMESE.  VIETNAMESE OFFICIALS ARE 
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ALREADY ASKING SERIOUS QUESTIONS CONCERNING WHEN THE 
U.S. WILL FORWARD THE BTA TO CONGRESS.  WE BELIEVE 
THESE DISCUSSIONS ABOUT LABOR BROUGHT BY THE 
CONGRESSIONAL DELEGATIONS MAY HAVE INCREASED GQ 
ANXIETY ON THE BTA RATIFICATION PROCESS EVEN MORE. 
END COMMENT. 
 
PETERSON 
 
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