VZCZCXRO9811
PP RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHPB
DE RUEHHI #1836/01 2990557
ZNR UUUUU ZZH
P 260557Z OCT 07
FM AMEMBASSY HANOI
TO RUEHC/DEPT OF LABOR WASHINGTON DC PRIORITY
RUEHC/SECSTATE WASHDC PRIORITY 6574
INFO RUEHHM/AMCONSUL HO CHI MINH 3846
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION

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