VZCZCXRO0596
RR RUEHCHI RUEHDT RUEHHM
DE RUEHHI #0833/01 1021020
ZNR UUUUU ZZH
R 121020Z APR 06
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 1438
INFO RUEHHM/AMCONSUL HO CHI MINH CITY 0914
RUEHZS/ASEAN REGIONAL FORUM COLLECTIVE

UNCLAS SECTION 01 OF 06 HANOI 000833 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS; G/TIP; INL/AAE 
STATE FOR CA, CA/VO, CA/VO/FPP 
STATE PASS TO DOL FOR ILAB/JLAI AND CHELM 
 
E.O. 12958: N/A 
TAGS: ELAB PGOV PHUM KCRM PINS VM TIP
SUBJECT: Vietnam Tackling Abusive Export Labor Firms 
 
Ref: A. Hanoi 801  B. 05 Hanoi 841 
 
HANOI 00000833  001.2 OF 006 
 
 
¶1. (SBU) Summary:  Confronted with problems related to 
a burgeoning export labor industry, the Government of 
Vietnam (GVN) is taking action to regulate the industry 
and protect workers from potential abuse. 
In an effort to mitigate unemployment and develop its 
pool of skilled workers, the Government of Vietnam aims 
to send 80,000-90,000 additional Vietnamese citizens 
overseas each year from 2006 to 2010.  Most of 400,000 
workers now overseas are employed in Taiwan, Korea and 
Malaysia, but the Vietnamese Government is increasingly 
targeting wealthier countries such as Saudi Arabia, 
Japan, Canada and the United States.  Alarmed at 
reports of export labor firms, employers abroad and 
domestic criminals exploiting and/or defrauding 
workers, the GVN has stepped up efforts to protect its 
citizens.  Central to this effort will be to replace 
past export labor regulations with an actual labor 
export law to regulate the industry, facilitate export 
labor and provide better protection to workers.  A 
draft export labor law is due to be debated in the 
National Assembly's May session, with passage expected 
in November 2006.  Post believes the current draft 
provisions for worker protection are an improvement 
over existing laws but still inadequate.  Post is 
encouraged that GVN and National Assembly officials are 
working to improve it in coordination with 
international community experts.  Other GVN measures 
include increasing prosecutions related to illegal 
export labor activities, investigating export labor 
firms, and holding off on new license approvals for 
firms seeking to send workers to the United States. 
End Summary. 
 
GVN Promoting Export Labor 
-------------------------- 
¶2. (SBU) The GVN is promoting export labor in an effort 
to mitigate unemployment, reduce social services costs, 
earn foreign exchange, and develop the country's pool 
of skilled workers.  According to the Ministry of 
Labor, Invalids and Social Affairs (MOLISA), 
approximately 400,000 Vietnamese citizens were working 
abroad as of late 2005.  The GVN plans to boost this 
number to as many as 500,000 by 2010 by increasing to 
80,000-90,000 the number of additional workers sent 
abroad each year between 2006 and 2010. In 2005, 
Vietnam sent 71,000 workers abroad.  (Note: the actual 
numbers of Vietnamese export laborers are far smaller 
than those being thrown around by labor export 
boosters; the "100,000 per year" to Saudi Arabia and 
the "200,000 per year" to Malaysia significantly 
overstate likely short-term or even medium-term 
prospects.  End note.)  The largest markets for 
Vietnamese workers abroad are Taiwan, Malaysia, Korea 
and Japan, with smaller numbers in Eastern Europe and 
some Gulf States.  The GVN is also actively exploring 
higher wage countries as markets for Vietnamese labor 
exports, particularly Japan, Saudi Arabia, Canada, and 
the United States. 
 
¶3. (SBU) In January 2006, the Minister of Labor, 
Invalids and Social Affairs visited Saudi Arabia to 
explore the possibility of sending Vietnamese workers 
there.  Though the Vietnamese press triumphantly 
announced the possibility of "100,000 jobs per year for 
Vietnamese workers in Saudi Arabia," experts at 
MOLISA's Department of Overseas Labor told Emboffs and 
visiting EAP and G/TIP officers that the Saudi program 
is in its infancy, that the initial numbers will be 
very low, and that Vietnamese labor export will be 
limited to skilled, male construction workers to avoid 
problems that have plagued foreign female domestic 
workers in Saudi Arabia. 
 
They Want to Be in America 
-------------------------- 
 
¶4. (SBU) Likewise, Vietnamese officials have been 
actively exploring U.S. markets.  Officers from MOLISA, 
the Ministry of Foreign Affairs (MFA) and the Office of 
the Government (OOG) all confirmed to Emboffs that 
Vietnam wants to establish a labor export relationship 
with the United States.  The primary obstacle to 
Vietnamese export labor, these experts say, is the fact 
that U.S. agricultural worker visas are only valid for 
one year, which limits the length of an export 
 
HANOI 00000833  002.2 OF 006 
 
 
laborer's contract to one year.  Because the fees a 
labor export company can charge a worker are capped and 
are dependent on the length of the contract the worker 
is able to obtain (with the maximum being one month 
salary per contract year), a one-year contract is not 
cost effective for the labor export companies, and 
consequently many concentrate on other labor-receiving 
countries where the profit per worker contract will be 
much larger.  Nguyen Xuan Vui, the director of 
VinaSerCo, the second-largest labor export company in 
Vietnam, told Poloff in March 2006:  "We would be happy 
to do business with the United States, but we cannot 
make a profit with only one-year contracts.  Please 
change your laws for export workers."  VinaSerCo sends 
workers to Malaysia, Taiwan and Dubai; the Dubai 
contracts can run as long as five years, and are very 
lucrative for the labor export companies and the 
workers, who earn many times what they could earn in 
Vietnam. 
 
¶5. (SBU) No firms currently have licenses to send 
workers to the United States, though several firms have 
tried to do so.  All Qworkers scheduled to be sent to 
the U.S. in 2006 thus far are to travel in connection 
with a still-unapproved contract between local labor 
export firms and the U.S. Global Horizons Inc.  In a 
meeting on March 28, MOLISA officials told Econoff, 
Conoff and Econ Assistant that labor firms should not 
have proceeded to recruit workers for the United 
States, because the contract between local labor firms 
and GHI had not yet been approved.  All 25 visa 
applications in Hanoi were denied and 37 of 48 visas 
were denied in HCMC because of falsified applications 
or the exorbitant fees charged by eight firms seeking 
to send workers abroad.  With firms charging between 
USD 5,000 and USD 6,500 (based, we understand, on what 
the export companies believed was a three-year labor 
export worker contract incorporating overtime 
assumptions), workers could not expect to see a profit 
in one year of working abroad, and thus could be 
expected to seek illegal employment in the United 
States. 
 
Mechanics of the Industry 
------------------------- 
 
¶6. (SBU) Workers participating in the export labor 
market do so via contracts signed with licensed 
Vietnamese labor exporting firms such as VinaSerCo, all 
of which are independent, but state-owned, enterprises. 
Export labor companies are licensed and managed by 
MOLISA's Bureau of Overseas Labor Management.  This 
office also coordinates matters related to export labor 
with other ministries (especially the Ministry of 
Foreign Affairs and Ministry of Public Security), and 
municipal/provincial People's Committees.  Interagency 
cooperation in Vietnam is often problematic. 
 
¶7. (SBU) According to MOLISA, there are currently 145 
export labor companies (including VinaSerCo) that 
facilitate sending workers abroad.  Only licensed labor 
export companies can engage in labor export without 
violating Vietnamese immigration laws.  Vietnamese 
export labor firms must submit their contracts with 
overseas firms (which place workers with employers) for 
approval before sending workers overseas.  Labor export 
companies recruit and train workers and are responsible 
for visas, health checks, travel arrangements and other 
aspects of laborers' contracts.  The permissible fees 
for these services are set by law. 
 
¶8. (SBU) The current legal instrument governing the 
management of Vietnamese overseas laborers, Decree No. 
141/2005/ND-CP, was issued in November, 2005 in an 
effort to regulate the growing industry and to 
supplement Decree No. 81/2003/ND-CP from July 2003 
which covers export labor more broadly.  Decree No. 141 
outlines the rights and responsibilities of workers, 
labor export firms and government agencies in all 
export labor activities.  The decree was written with 
encouragement of export labor in mind, stating: "The 
State encourages agencies, organizations and Vietnamese 
people at home and abroad to participate in expanding 
markets, seeking partners and contacts to create 
conditions for laborers to work abroad in accordance 
with international law, Vietnamese laws and laws of 
host countries."  The decree sets out sanctions for 
 
HANOI 00000833  003.2 OF 006 
 
 
violations by labor export companies, which can include 
fines or license suspensions or revocations.  According 
to the Deputy Director of MOLISA's Department of 
Overseas Labor, MOLISA is responsible for carrying out 
periodic inspections to ensure compliance with the law 
by labor export companies.  For violations that are 
"serious" or criminal in nature, violators can be 
charged under criminal law, MOLISA said.  Another 
motivator for the decree was the high rate of broken 
contracts for Vietnamese workers in certain high-wage 
countries, particularly Taiwan and Korea.  Forty 
percent of Vietnamese export laborers in South Korea 
and about nine percent of workers in Taiwan leave their 
contracted workplaces or disappear into the illegal 
labor market after the expiration of their contracts, 
MOLISA said.  Such violations have prompted periodic 
suspensions of labor import from Vietnam by both Korea 
and Taiwan.  The decree forbids Vietnamese workers from 
breaking labor contracts under penalty of 
"repatriation." 
 
Alleged Worker Abuses Causing Concern 
------------------------------------- 
 
¶9. (SBU) Amid stepped up efforts to promote export 
labor, reports have also increased of abuses by export 
labor firms, criminals in Vietnam defrauding would-be 
overseas workers, and employers abroad.  Alleged abuses 
range from bonded labor, to extortionate fees charged 
by labor contracting firms, to sexual trafficking 
conducted using labor contracts as camouflage. 
 
¶10. (SBU) Researchers from Taiwan's National Chi Nan 
University and Canada's University of Western Ontario 
recently conducted a case study of Vietnamese workers 
sent to Taiwan and provided a readout to Econoff and 
other NGO and International Organization staff in 
Hanoi.  The sample size of the survey was small (about 
50 workers) but the researchers believe that data was 
reliable because of the depth of interviews.  They 
found that fifty percent of the workers interviewed 
lost money during the period of their contracts abroad 
(which averaged 1.3 years).  They also found that 
Vietnamese laborers paid on average $6,343 during their 
first year of work abroad, while earning a wage of 
$5,760. Such figures are consistent with workers 
seeking H2A visas in Hanoi and HCMC (ref A). 
 
¶11. (SBU) In addition, the researchers documented cases 
in which Vietnamese workers had been sexually abused, 
coerced into signing exploitative contracts, or, once 
in Taiwan, held in situations of bonded labor.  They 
also reported cases of Vietnamese firms running up fees 
for workers by demanding extra payments for training, 
brokerage service fees for receiving-country labor 
firms, medical care, and airfare.  Some of these fees 
are legal, normal and customary, but it is unclear to 
what degree the relatively unsophisticated workers are 
aware of them in advance.  By the time these fees 
become unbearable, workers have already committed 
substantial sums and are unwilling to back out, said 
the researchers.  The Vietnamese press runs frequent 
public service announcements, cautionary tales and 
feature articles on overseas workers who find their 
experiences difficult and not profitable, all in an 
effort to raise awareness among potential laborers and 
reduce scams.  But the lure of high salaries overseas 
continues to draw thousands of unskilled laborers who 
are extraordinarily vulnerable to scams and cons. 
 
¶12. (SBU) According to the GVN and Vietnamese media 
sources, the various predators who take advantage of 
Vietnamese hopefuls are depressingly diverse.  Some 
criminals establish fake labor export companies and 
collect advance fees for jobs that do not exist before 
disappearing with the funds.  Some semi-legal operators 
set up expensive "training schools" that claim to be 
able to "place" graduates with labor export companies 
for good contracts overseas.  Others claim to be 
official intermediaries between labor export companies 
and workers, "brokering the brokers" for a fee.  When 
the differential between the overseas wage and the 
available local wage is so high, the opportunities to 
defraud unsophisticated workers are ample. 
Importantly, according to international organization 
and NGO contacts, the labor export companies themselves 
are rarely the culprits in these scams.  Their 
 
HANOI 00000833  004.2 OF 006 
 
 
businesses are lucrative enough from the large-scale 
collection of legal and legitimate fees that they do 
not need to engage in these petty scams to make money. 
"Many workers have accumulated substantial debt before 
they arrive at a labor export company," one Taiwan 
economic official told Poloff. 
 
¶13. (SBU) Another key area of difficulty is the lack of 
support to help Vietnamese workers abroad.  Vietnamese 
embassies have MOLISA labor officers assigned to assist 
workers in trouble and the GVN has also established a 
"Fund for Labor Export Support" to assist workers in 
need.  Export labor firms must contribute one percent 
of their service fees to the fund.  Vietnamese 
embassies in export labor destinations also have labor 
sections to support workers.  South Korea has four 
labor workers, Taiwan has four, Malaysia has four, and 
Japan has two. 
 
¶14. (SBU) unfortunately, knowledge of this support 
among workers is reportedly low.  Decree 141 attempts 
to address this issue by directing Ministries, overseas 
missions and other state agencies to support overseas 
laborers in a range of ways.  Article 18, for example, 
directs the Ministry of Foreign Affairs to "provide 
consular and legal protection for Vietnamese citizens 
working abroad."  Article 18 directs the Ministry of 
Public Security to "coordinate with overseas Vietnamese 
representative missions ... to investigate and handle 
in time cases showing criminal signs..."  Article 20 
directs Provincial People's Committees to conduct 
education activities on guidelines and policies for 
overseas workers.  Article 22 states that "overseas 
Vietnamese representative missions" have the 
responsibility to: 
 
-- Guide enterprises [labor export companies] to gain 
access to markets and sign labor cooperation contracts 
according to the provisions of the laws of Vietnam and 
the host countries; 
 
-- Assist specialized agencies in Vietnam in appraising 
the conditions and feasibility of labor receipt 
contracts and the legal person status of foreign 
partners; 
 
-- Guide and supervise activities of Vietnamese 
enterprises' representatives in foreign countries 
concerning their responsibilities to manage laborers 
and handle matters related to laborers; 
 
-- Protect the legitimate rights and interests of 
laborers working abroad; and handle violations 
committed by Vietnamese laborers working abroad 
according to the provisions of the Decree; 
 
-- Report on and propose competent Vietnamese agencies 
for settlement cases showing signs of serious violation 
of the provisions of Vietnamese law; 
 
-- Coordinate with functional agencies of Vietnam and 
the host countries and enterprises in sending violating 
laborers home. 
 
As always in Vietnam, implementation is the issue; 
small Embassies and large numbers of Vietnamese 
laborers abroad mean that this well-intentioned effort 
may not be able to overcome its resource limitations. 
 
"These are our people" -- Actions against Abusers 
--------------------------------------------- ---- 
 
¶15. (SBU) In light of potential and real abuses, the 
GVN has stepped up action against abusive export labor 
firms and is seeking to increase worker protections. 
In a meeting at MOLISA on March 15, Deputy Director for 
International Cooperation Nguyen Manh Cuong stated: "We 
understand the United States is concerned about the 
rights of Vietnamese workers.  You must know this: that 
the concerns that you have are ten times stronger for 
us.  These are our people."  Cuong's statements were 
echoed elsewhere in MOLISA, and, importantly, by the 
Vice-Chairman of the National Assembly's Social Affairs 
Committee, Luong Phan Cu, in a March meeting with 
visiting EAP and G/TIP staffers. 
 
¶16. (SBU) Central to this effort will be to upgrade 
 
HANOI 00000833  005.2 OF 006 
 
 
Decrees 141 and 81 and create an actual labor export 
law to regulate the industry, facilitate export labor 
and provide better protection to workers.  The initial 
draft of the law has been submitted for initial review 
at the May 2006 session of the National Assembly, with 
passage of the final law expected in the fall session, 
probably in November.  Post believes the current 
draft's provisions for worker protection are better 
than in Decrees 81 and 141, though still inadequate. 
Specifically, the draft law puts greater responsibility 
on labor export firms to bear the costs of providing 
medical care and returning workers home if workers are 
injured or fall ill.  Firms must also return fees on a 
pro-rata basis if workers must return to Vietnam for 
reasons "not due to their faults [sic]." The draft also 
clarifies the range of fees that workers are obligated 
to pay. 
 
¶17. (SBU) Despite these improvements, the GVN and the 
National Assembly agree the law needs better 
protections for trafficking victims, and are in the 
process of revising the draft in coordination with the 
international community.  MOLISA officials in their 
meeting with Econoff, Conoff and econ assistant on 
March 28 expressed interest in receiving input from 
other countries as well as international organizations 
such as the ILO and IOM on the law to improve it.  Vice- 
Chairman Cu told Poloff he is "unsatisfied" with the 
current draft and has returned it to the drafting 
committee for re-evaluation.  "The National Assembly 
has instructed the Government agencies to work on the 
draft law for labor export so that it will ensure that 
workers are not exploited," Cu said.  "Vietnam is 
interested in, and welcomes, the recommendations and 
suggestions of the international community on how to 
protect workers." 
 
¶18. (SBU) Pham Chi Lan, a senior advisor on the Prime 
Minister's Research Commission, who is close to several 
of the cabinet officials on the drafting committee for 
the labor export law, told Poloff that the initial 
draft of the labor export law was created to focus on 
promotion of labor export and reduction of contract- 
breaking among Vietnamese workers overseas that could 
cause Vietnamese labor to be unattractive or 
uncompetitive.  However, the various approving 
agencies, including the OOG, the National Assembly and 
the Party, have all demanded that the protections for 
Vietnamese workers be strengthened before the law is 
passed.  Officials from the International Organization 
for Migration and the International Labor Organization 
will meet with the Chairwoman of the Social Affairs 
Committee of the National Assembly during the week of 
April 10-15 to explain needed changes in the law.  ILO 
and IOM are optimistic that their input will be 
considered and incorporated. 
 
Current Enforcement Measures 
------------------------------ 
 
¶19. (SBU) In addition to drafting a labor export law, 
the GVN has stepped up other actions against abusive 
labor firms.  The following are concrete actions 
currently under way or taken recently: 
 
-- While the GVN does not keep or supply statistics of 
export labor violations, a survey of news reports 
indicates the GVN has prosecuted more abusive labor 
firms in the first quarter of 2006 than it did in all 
of 2005.  The GVN has is currently criminally 
prosecuting at least ten individuals for labor export 
related abuses in 2006.  Post found two such cases in 
¶2005.  Most alleged crimes relate to theft of worker 
fees, though in at least one case victims were 
trafficked illegally with no documents after workers 
paid substantial fees. 
 
-- MOLISA, has suspended approvals of new contracts for 
work in the United States in order to learn the facts 
surrounding the recent GHI case (ref A).  MOLISA is 
also interviewing workers associated with apparently 
illegal attempts to send workers to the United States 
related to the GHI case. 
 
-- MOLISA has increased regular and spot inspections of 
export labor firms.  MOLISA carried out 46 periodic 
checks and three surprise investigations on labor 
 
HANOI 00000833  006.2 OF 006 
 
 
supply companies in 2005.  Seven firms were faced with 
fines in 2005; while no licenses were withdrawn or 
suspended.  In 2006, MOLISA has thus far carried out 
three regular inspections and four surprise 
investigations.  From these, it levied fines in four 
cases, and suspended license for three of the four 
firms because the severity of their violations.  "There 
are more checks and more severe punishments than last 
year," said Tuan Nhu Nguyen, Deputy Head of the Labor 
Market Division in MOLISA's Department of Overseas 
Labor. 
 
Comment 
------- 
 
¶20. (SBU) Vietnam is tackling head-on the central 
contradiction of export labor: how do you develop your 
labor export market without falling into the trap of 
competing in a "race to the bottom" with other labor 
export countries concerning worker protection?  Vietnam 
officials are sincerely interested in creating a legal 
and regulatory framework that protects workers.  We are 
encouraged that MOLISA officials have asked for post 
assistance in understanding U.S. immigration law, and 
we believe that strong progress is being made in 
raising the GVN's consciousness regarding the important 
human rights issues related to export labor.  Once a 
sufficient legal framework is in place, the next 
challenge will be to convince Vietnam to put time and 
money into implementing that framework, especially when 
funds are so short. 
 
¶21. (SBU) There are other ways we can help.  The COMMIT 
process (ref B), despite high administrative and staff 
costs, generated a useful project proposal (Project 
Proposal Concept 10) entitled "Addressing Exploitative 
Brokering Practices" that could make a difference in 
this problem across the region, not just in Vietnam. 
Here, in Vietnam, we also hope to use the United States- 
Vietnam Labor Dialogue to educate Vietnam on export 
labor.  We hope that the dialogue, which did not take 
place in 2005 because of a lack of funding for a U.S. 
Department of Labor delegation to visit Vietnam, could 
include a ministerial level visit to Washington. 
 
MARINE