USG AND GVN CONDUCT 2007 LABOR DIALOGUE IN HANOI

UNCLAS SECTION 01 OF 04 HANOI 001836 SIPDIS SENSITIVE SIPDIS STATE FOR EAP/MLS AND DRL/IL STATE PASS USDOL DUS PONTICELLI, ZHAO STATE PASS USTR FOR BISBEE USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO E.O. 12958: N/A TAGS: ELAB EAID ECON ETRD EINV WTRO VM SUBJECT: USG AND GVN CONDUCT 2007 LABOR DIALOGUE IN HANOI REF: HANOI 1799 HANOI 00001836 001.2 OF 004 ¶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 Summary. ¶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. INTRODUCTIONS -------------- ¶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." LABOR RIGHTS AND ENFORCEMENT -------------- ¶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 equality. HUMAN RESOURCE DEVELOPMENT -------------- ¶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 so. ¶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 curriculum. CHILD / FORCED LABOR AND TIP -------------- ¶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 resides. ¶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. INDUSTRIAL RELATIONS -------------- ¶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 choose. ¶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. OCCUPATIONAL HEALTH & SAFETY -------------- ¶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 professions; - 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 investigated. ¶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. EXPORT LABOR -------------- ¶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. GENERALIZED SYSTEM OF PREFERENCES -------------- ¶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 relationship. CONCLUSION -------------- ¶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 delegation. ¶21. (SBU) After the closing remarks, the two sides summarized the list of requests made by MOLISA to the DOL. These requests include: - 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 labor; - 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. MICHALAK