HCMC LABOR OFFICIAL IN HOT WATER OVER TALK TO U.S. BUSINESS

C O N F I D E N T I A L HO CHI MINH CITY 001386 SIPDIS SIPDIS E.O. 12958: DECL: 12/12/2016 TAGS: ELAB PREL ECON PGOV VM SUBJECT: HCMC LABOR OFFICIAL IN HOT WATER OVER TALK TO U.S. BUSINESS AND CONTACTS WITH USG CLASSIFIED BY: Kenneth S. Chern, Deputy Principal Officer, CONGEN HCMC, State Department. REASON: 1.4 (b),(d) CLASSIFIED BY: Kenneth S. Chern, Deputy Principal Officer, CONGEN HCMC, State Department. REASON: 1.4 (b),(d) ¶1. (C) Nguyen Thi Thanh Mai (protect),Vice Director for Labor Affairs at HCMC's Department of Labor, Invalids and Social Affairs, ConGen HCMC's best government contact on labor issues, told us on December 12 that she faces Party disciplinary action following a speech she gave to the HCMC American Chamber of Commerce (AMCHAM) and her overall "close relationship" with the USG. Mai said her troubles with the Party crystallized following a December 1 speech she gave at an AMCHAM seminar on "Post-WTO Challenges for the Apparel Industry and Workers." ¶2. (C) At the event, Mai discussed frankly and openly the causes of the wave of strikes that occurred in the HCMC area in early ¶2006. Mai started out by blaming foreign employers and the low wages they paid workers, mostly at garment factories, for the 2006 unrest. She said employers violated wage laws by using the GVN-mandated minimum wage as a worker's final salary, not by using the minimum wage as a base salary to which benefits and allowances were added. She noted that the worst abuses were found in Korean, Taiwanese, and Japanese factories, most of which were apparel manufacturers. Companies that had fewer labor relations problems were those that attempted to comply with labor regulations and that had robust corporate and social responsibility programs. These companies tend to be American or European. ¶3. (SBU) Perhaps the most controversial elements of Ms. Mai's presentation centered on the role and effectiveness of Party-controlled trade unions. Most labor union representatives are not well educated and can lose their jobs if they complain about problems to company managers. Rank-and-file workers know this and therefore do not trust their labor union representatives. Unions also have failed to educate workers about their responsibilities towards their employers under Vietnamese law, she observed. Management also has failed workers in this regard: Mai noted that the International Labor Organization (ILO) translated Vietnam's labor code into Korean and Chinese and then invited company managers to a training session; very few company representatives took advantage of this opportunity. ¶4. (SBU) Problems are not helped by murky government rules and by government's failure to come up with lasting labor relations solutions, Ms. Mai noted in her speech. She complained publicly that HCMC DOLISA is so busy mediating disputes with its limited human resources that it does not have time to develop mechanisms that will keep things running smoothly in the long-term. ¶5. (C) Following the speech -- and coverage that it received on the BBC Vietnam News Service website -- Mai told us that she faced disciplinary action from the Party. She is in "deep trouble," not only because of the speech, but also because of her overall "close" association with the USG. Her Party cell superiors pointed to her participation in a 2006 International Visitors program on "civil society" as well as her decision to meet with Consulate and visiting USG officials. She said that Party officials also chided her for meeting with visitors from the National Endowment for Democracy in mid-2006, a visit ConGen had supported. The Party cell told her that she was in danger of being labeled a "collaborator" and asked her to limit our contact with us. ¶6. (C) Comment: While Mai's comments were frank they also were accurate and helpful to U.S. businesses seeking to develop their operations in Vietnam. However helpful Mai's guidance may have been, her criticism of the labor system -- particularly the ineffectiveness of GVN-controlled unions -- was too much for the local Party bosses to bear. Neither she, nor other members of her staff, will likely be as forthcoming again in the near future, to the detriment of business and labor development in Vietnam. More troubling is the fact that Ms. Mai is being called to task for her professional relationship with the USG. We will examine whether other ConGen official contacts now face tougher scrutiny. End Comment. WINNICK