VZCZCXRO6137
RR RUEHHM
DE RUEHHI #3019/01 3491030
ZNR UUUUU ZZH
R 151030Z DEC 06
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 4130
INFO RUEHHM/AMCONSUL HO CHI MINH 2241
RUEHC/DEPT OF LABOR WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RHEHNSC/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHGV/USMISSION GENEVA 1153

UNCLAS SECTION 01 OF 02 HANOI 003019 
 
SIPDIS 
 
SENSITIVE BUT UNCLASSIFIED 
SIPDIS 
 
STATE FOR EAP/MLS AND DRL MITTELHOUSER 
COMMERCE FOR 4431/MAC/AP/OPB/VLC/HPPHO 
LABOR FOR LI 
STATE PASS USTR 
 
E.O. 12958: N/A 
TAGS: ELAB ECON PGOV ETRD EIND EINV VM
SUBJECT: VIETNAM NATIONAL ASSEMBLY PASSES NEW LABOR LAWS 
 
SENSITIVE - DO NOT POST ON INTERNET 
 
REF: A) HANOI 3012; B) HANOI 2050 
 
¶1. (SBU) Summary: The National Assembly passed two important pieces 
of labor legislation in its fall session, one governing labor 
disputes and another regulating the country's burgeoning export 
labor industry.  Labor experts note that the new strikes law could 
help open the door to greater freedom of association by allowing 
worker representatives who are not members of the Communist 
Party-controlled labor union to negotiate labor disputes in some 
circumstances.  The new law on export labor, meanwhile, creates some 
protections for the growing number of Vietnamese who go overseas to 
work.  The law is a general disappointment to many labor and human 
rights experts, however.  That said, the implementing decrees must 
still be written for both laws, providing a final chance for the 
international community to weigh in on these issues before the laws 
come into effect on July 1, 2007.  End Summary. 
 
LAW ON STRIKES 
-------------- 
 
¶2. (SBU) During its recently ended fall session, the National 
Assembly amended Chapter 14 of Vietnam's labor code, a section of 
the law covering the legal process for resolving industrial 
disputes.  The law was drafted in the wake of a surge in labor 
unrest in late 2005 and early 2006 and is meant to clarify the 
procedures for holding strikes legally.  The redraft was deemed 
necessary because all but a handful of the 1,200 strikes in Vietnam 
in 1995 have technically been illegal due to their failure to follow 
a heretofore lengthy and complicated dispute resolution process. 
 
¶3. (SBU) The new Chapter 14 allows worker representatives for the 
first time to negotiate for workers in disputes at enterprises where 
no union is present.  In the past, the Vietnam General Confederation 
of Labor (VGCL), the Communist Party-controlled labor union, was the 
sole organization allowed to represent workers in industrial 
disputes.  While the law does not allow for independent unions, it 
states that the negotiation of disputes can be led and organized by 
"relevant entities" when the enterprise in question does not have a 
union. "Where a union doesn't exist, the workforce can select its 
own representative to organize and lead the dispute.  It is a big 
step," said Dang Duc Son, Director of the Legal Department at the 
Ministry of Labor, Invalids and Social Affairs (MOLISA), who 
assisted in the law's drafting.  Son noted that 60-70 percent of the 
foreign-invested enterprises and private firms in Vietnam are not 
unionized, "so in these we have created a new mechanism for the 
organization and leading of strikes." 
 
¶4. (SBU) The International Labor Organization (ILO) lauded the 
change.  "These are small steps in the evolution of the right to 
association," said Jan Sunoo, Chief Technical Advisor of the ILO's 
Vietnam Industrial Relations Project.  VGCL lobbied aggressively to 
become the required worker representative in all disputes, but was 
rebuffed by the increasingly independent National Assembly.  It will 
be necessary to wait until the implementing decrees for the law are 
written to fully understand the law's effectiveness or impact, Sunoo 
pointed out.  The law will come into effect on July 1, 2007. 
 
¶5. (SBU) A key feature of the amended law is that it shortens the 
time for resolving disputes by half and divides labor disputes into 
those over rights and those over interests.  Disputes over rights, 
which MOLISA's Son said are "by law violations of the law," must be 
routed through a "conciliation council" composed of worker 
representatives and the enterprise in question, or, if the council 
cannot resolve the issue, to the Provincial People's Committee 
Chairman.  Workers can appeal the chairman's decision to a court or 
have the right to go on strike, Son said. 
 
¶6. (SBU) In disputes over interests, meanwhile, workers must take 
their claims through a process involving a conciliation council and, 
if no resolution is obtained, a provincial arbitration council 
before a legal strike can be held.  MOLISA's Son stated that the 
government would begin an information campaign to educate workers 
about the new code, with the Vietnam Chamber of Commerce and 
Industry (VCCI) and the VGCL contributing.  The Prime Minister will 
also chair a forum, to be attended by VCCI and VGCL, to help spread 
understanding of the new law, he added. 
 
EXPORT LABOR LAW 
 
HANOI 00003019  002 OF 002 
 
 
---------------- 
 
¶7. (SBU) The law "On Vietnamese Labor Working Abroad by Contract," 
also passed in late November and coming into effect on July 1, 2007, 
seeks to regulate enterprises and protect workers participating in 
Vietnam's growing export labor industry.  Some 400,000 Vietnamese 
citizens are currently employed outside of the country and the 
government is seeking to encourage another 80,000 to 90,000 
Vietnamese each year between 2006 and 2010 to do the same.  Most 
workers are now employed in Taiwan, Korea and Malaysia, but the GVN 
is looking further afield, and particularly to the Middle East 
(Saudi Arabia, Bahrain and the United Arab Emirates) and Western 
countries (France, Canada and the United States), for further 
opportunities. 
 
¶8. (SBU) Amid the industry's growth, news reports and human rights 
groups have cautioned against ramping up the industry without also 
providing robust worker protections.  In particular, human rights 
groups and news reports have noted increasing numbers of Vietnamese 
workers who have been charged upwards of $7,000 for the opportunity 
to work abroad, fees which mean workers can only begin to cover 
after one or sometimes two years abroad.  Reports of bonded labor, 
sex trafficking and the lack of resources available to workers in 
distress have also emerged. 
 
¶9. (SBU) The new law provides terms for the provision and revocation 
of labor export licenses for enterprises, sets out various worker 
protections and specifies a range of obligations upon workers 
themselves engaging in the industry.  The National Assembly has not 
yet issued a final copy of the law, but Vu Dinh Toan, Deputy 
Director General of the Department of Overseas Labor at MOLISA, 
provided Econoff a verbal outline.  Noting that the regulations of 
the Philippines and Thailand were used as examples, Toan said the 
law contains provisions requiring overseas labor firms to inspect 
conditions at workplaces and bear the costs of returning critically 
ill or deceased workers to Vietnam. 
 
¶10. (SBU) Other provisions continue an already existing fund, 
supported by export labor firms and the government, to support 
workers in distress, Toan continued.  Labor export firms will be in 
charge of handling worker disputes abroad and "Labor Administration 
Boards" (which already exist in Vietnamese embassies in major 
labor-receiving countries) will handle worker matters that cannot be 
solved by export labor firms.  Firms found violating the law can be 
fined, have their licenses revoked or, for individuals at firms 
involved in severe violations, held criminally liable.  The 
implementing decree for the law will create ceilings upon the 
various fees that workers will pay and set out the required 
contributions to the worker protection fund, Toan added. 
 
¶11. (SBU) Experts noted the law falls far short of their hopes. 
Andy Bruce, Chief of Mission at the the International Organization 
of Migration (IOM), told Econoff privately he felt the language on 
worker protections was weak and vague, and that export labor firms 
had probably successfully limited the terms on protection provided 
in order to make their operations easier and more profitable.  Such 
limits were of interest to the GVN, he said, because its main 
interest is to increase the size of the industry. 
 
¶12. (SBU) Other experts, commenting on earlier drafts that appear 
almost identical to the final based on Econoff's discussions with 
MOLISA, have noted that the law contains no sanctions for corruption 
in the governmental administration of the programs, no clear 
procedures for the remediation of disputes, and no clear standards 
for the screening of firms engaged in brokering labor contracts. 
The law also does not provide any extra resources or funding for the 
Vietnamese embassy Labor Administration Boards charged with handling 
worker cases and contains a range of stiff penalties placed for 
workers who violate their contracts. 
 
¶13. (SBU) Comment:  The next six months will provide an important 
opportunity for the international community to influence the 
implementing decrees for the both the export labor and strikes laws. 
 On export labor, Post plans to continue pressing for adequate 
worker protections.  In regard to the strikes law, it will remain 
important to work to ensure that the government does not walk back 
the new right given to workers who are not union members to mediate 
their own disputes.  End Comment. 
 
MARINE