Skip to main contentReference ID: 07HOCHIMINHCITY1105
Created: 2007-10-26 12:21
Released: 2011-08-30 01:44
Classification: UNCLASSIFIED//FOR OFFICIAL USE ONLY
Origin: Consulate Ho Chi Minh City
VZCZCXRO0268
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DE RUEHHM #1105/01 2991221
ZNR UUUUU ZZH
O P 261221Z OCT 07
FM AMCONSUL HO CHI MINH CITY
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3285
INFO RUEHHI/AMEMBASSY HANOI PRIORITY 2265
RUCPDOC/USDOC WASHDC 0043
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE
RUEHHM/AMCONSUL HO CHI MINH CITY 3498
UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 001105
SIPDIS
SENSITIVE
SIPDIS
STATE FOR EAP/MLS AND DRL/IL MARK MITTELHAUSER
COMMERCE FOR 4431/MAC/AP/OPB/VLC/HPPHO
STATE PASS USDOL ILAB
E.O. 12958: N/A
TAGS: ELAB ECON PREL PGOV OTRA OVIP VM
SUBJECT: DUS PONTICELLI HCMC VISIT - PUBLIC SECTOR LAPSES AND
EMERGING CIVIL SOCIETY IN HCMC
HO CHI MIN 00001105 001.2 OF 002
1. (U) Summary: Deputy Undersecretary of Labor for
International Affairs Charlotte Ponticelli and Department of
Labor Senior Advisor for EAP Affairs Zhao Li stopped in Ho Chi
Minh City (HCMC) on October 20 to observe and discuss HCMC labor
issues en route to the 2007 U.S. - Vietnam Labor Dialogue in
Hanoi. NGOs, U.S. garment/footwear manufacturers and labor
market experts described the strain that HCMC's rapid economic
growth has placed on the public sector mechanisms for preventing
and resolving labor disputes. At the same time, interlocutors
demonstrated that this pressure creates opportunities for civil
society to develop, including the increasingly entrepreneurial
HCMC Women's Union. End summary.
Not Your Mother's Women's Union
-------------------------------
2. (SBU) In a meeting room packed with bouquets and placards
commemorating the 77th anniversary of the national
organization's founding, Vice-President of the Women's Union of
HCMC Ms. Nguyen Ngoc Hanh described their efforts to enhance
women's economic role in Vietnam's ongoing economic boom.
(Note: The 12 million member Women's Union is closely connected
to the Communist Party under the umbrella of the Fatherland
Front. Although its activities were purely political in the
pre-reform era, it has since expanded to broad based social
welfare programs, in cooperation with numerous foreign donors
and NGOs. End note.) Hanh explained that the Women's Union's
Culture House concentrates a broad range of services at one
location: three to four thousand women per day participate in
vocational training (e.g. cosmetology, hair styling, sewing,
etc.); marriage and health counseling; calisthenics and
exercise; personal hygiene counseling; and cultural
performances. The Center also works to address and prevent
child labor problems and houses women's vocational,
professional, and student clubs, as well as an association and
management training program for women entrepreneurs.
3. (SBU) Hanh described micro-lending projects aiming to double
the income of the more than 10,000 HCMC households surviving on
one USD per person per day. To date, the 4,500 micro-lending
groups organized by the Union (totaling 27,000 participants)
have a repayment rate of 98 percent.
4. (SBU) DUS Ponticelli relayed USG priorities for job creation
as the best way to tackle poverty and promote economic growth,
and commended the Union's efforts to combat this problem.
Regarding child labor, Hanh said that an ILO-funded project
established that hawking newspapers and lottery tickets, shining
shoes, and working as housekeepers or in family shops were the
most typical forms of child labor in the three city districts
surveyed. Women's Union remediation efforts include educating
parents as to the importance of education, offering scholarships
or night classes, or vocational training to the children
involved.
Improvements in Working Conditions Don't Deter Strikers
--------------------------------------------- ----------
5. (SBU) The delegation toured the Chang Shin footwear factory,
a Nike Inc. sub-contractor facility in Dong Nai province with
20,000 workers. Chief Nike representative Shirley Justice
described Nike's global and Vietnam presence, its extensive
corporate social responsibility efforts (e.g., scholarships,
Habitat for Humanity projects, a micro-loan program with the
Women's Union), and current challenges. Nike's relationship
with its subcontractors has evolved from an auditing/monitoring
function to a consultation, where Nike works together with its
partners to improve working conditions and enhance human
resources. Despite these efforts, Ms. Justice reported
low-level but chronic labor unrest, with 38 strikes across the
industry in the last two weeks, including incidents at several
Nike facilities.
Fighting Turnover: "Deskilling" vs. Movie Night
--------------------------------------------- ---
6. (SBU) Representatives from foreign-invested footwear (Nike
and Adidas), Vietnamese garment manufacturers, the corporate
social responsibility NGOs Company Stakeholder Responsibility
(CSR) and Global Standards, and the Chamber of Commerce and
Industry of Vietnam raised worker shortages and labor code
issues during a roundtable discussion with the DOL delegation.
Manufacturers described a temporary, migrant work force intent
on maximizing income for several years before returning to their
home regions, and willing to switch factory jobs for a 20,000
VND (USD 1.25) bonus. Having found on-site amenities such as
kindergartens, movie nights, and even wedding services
ineffective in retaining workers, Adidas has 'de-skilled'
HO CHI MIN 00001105 002.2 OF 002
factory operations, maximizing automation to minimize the labor
force and training. At Nike, however, human resource capacity
building remains a top priority and together with the social
amenities provided has kept turnover rate there at 10 percent,
significantly below the industry average.
Coping with Labor Unrest in a Public Sector Vacuum
--------------------------------------------- -----
7. (SBU) All participants agreed that educating the work force
in labor law was the best way to prevent strikes, but that this
was an unfulfilled GVN responsibility. Participants also
criticized the GVN's inaction in the face of labor unrest, as
well as the lack of regular communication between the GVN and
industry, but agreed with VCCI's observation that the GVN has
recently begun to solicit industry input.
Comment
-------
8. (SBU) The GVN's lack of an effective communications strategy
and weak execution hampers effective labor relations in HCMC.
This inertia contrasts sharply with the dynamic, multi-faceted
training and educational programs of the increasingly autonomous
Women's Union. Although leaders at various levels receive
modest salaries, much of the Women's Union activity is
volunteer-based or supported by membership fees. Its
metamorphosis from a communist party tool to an increasingly
self-funded volunteer-driven agent of social change marks the
Women's Union's as a leading indicator of HCMC's emerging civil
society. End comment.
9. This cable was coordinated with Embassy Hanoi and cleared by
the delegation.
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