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### Viewing cable 04HANOI2107, ENCOURAGING TIP PROGRESS IN VIETNAM

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
04HANOI2107 | 2004-07-29 09:06 | 2011-08-25 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Hanoi

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

` `

    UNCLAS SECTION 01 OF 04 HANOI 002107

    SIPDIS

    SENSITIVE

    STATE FOR G/TIP, EAP/BCLTV, EAP/RSP, INL/AAE

    E.O. 12958: N/A
    TAGS: PHUM KWMN KCRM ELAB VM OMIG LABOR TIP
    SUBJECT: ENCOURAGING TIP PROGRESS IN VIETNAM

    REF: A. Moeling-Dunlap email 7/26/04 B. Hanoi 1190

    ¶1. (SBU) Summary: To provoke the changes necessary to
    graduate Vietnam off the TIP Watch List, the USG should
    encourage greater protection of workers while staying out of
    the sensitive debate over the character and desirability of
    the labor export sector in Vietnam.  We should push hard on
    areas where there is consensus on what Vietnam can do
    (ratification of UN Protocols, signing of a trafficking MOU
    with Cambodia, creation of labor export regulations that
    protect workers, increasing prosecutions of traffickers,
    increasing training for anti-TIP officers, improving
    coordination to protect victims, establishing a national
    plan of action to prevent trafficking, for example) and take
    a wait-and-see approach on areas where there is disagreement
    about what Vietnam can or should do (specific instructions
    regarding the restructuring of the labor code.)  In terms of
    tactics, to prevent a counterproductive Vietnamese reaction
    to U.S. "demands" we should avoid presenting our
    recommendations as a quid-pro-quo.  End summary.

    ¶2. (U) Embassy has reviewed a draft copy of the proposed TIP
    action plan for Vietnam (ref A) and has the following
    specific comments and recommendations, keyed to the text.

    ¶3. Embassy response to emailed proposed G/TIP action items
    for Vietnam to be removed from the TIP Tier 2 Watch List:

    BEGIN POINT-BY-POINT REVIEW

    ¶4. (SBU) Proposed:
    -- Pass a comprehensive law against labor trafficking.  This
    law should define involuntary servitude and debt bondage.

    Embassy response:
    The process of passing new legislation in Vietnam is
    incredibly complex and time-consuming, requiring a multi-
    year process of consensus-building.  In addition, Vietnam
    completed (and passed) a comprehensive new labor law in
    2003; it is therefore at the bottom of the legislative
    priority list.  It would be more realistic for us to suggest
    that the GVN create comprehensive regulations on the export
    of labor to prevent trafficking.  The regulations are
    necessary to implement the new labor law, and achievable in
    a reasonable timeframe.  As such we would be asking the GVN
    to do something within its power.

    ¶5. (SBU) While Vietnamese law does not refer specifically to
    debt bondage or involuntary servitude, Article 71 of the
    Constitution of 1992 guarantees the "inviolability of the
    person and the protection of the law with regard to his
    life, health, honor and dignity" and Article 123 of the
    Penal Code sets out criminal penalties for those who
    "illegally arrest, hold in custody or detain other persons."
    This is sufficient in Vietnam to criminalize slavery and
    debt bondage.

    We recommend changing this action to:

    -- Create comprehensive regulations on the export of labor
    to prevent trafficking and the abuse of workers.

    ¶6. (SBU) Proposed:
    -- Provide protection for victims of labor trafficking,
    including the protection from retribution by the offending
    labor company or employer.

    Embassy response:

    The GVN response to this is likely to be "we do this
    already."  Under the penal code, retribution is illegal and
    the victim has the right to lodge a complaint with the
    Ministry of Public Security or the police if his rights or
    freedom have been violated.  The degree to which this is an
    effective remedy is a function of the health of the overall
    Vietnamese justice system, and not of the GVN's willingness
    to tolerate trafficking.  The GVN is likely to challenge us
    to provide examples or evidence that labor trafficking
    victims have been subject to retribution, and at the moment
    we will have a hard time providing that.  The only support
    post has seen for the "retribution" accusation has been the
    claims that Daewoosa victims were sued to recover the amount
    of their settlement checks and that they believe they have
    been denied employment as a result of the case.
    As reported Ref B, an Embassy inquiry (with the cooperation
    of the Ministry of Labor and the Hanoi Lawyers Association)
    has demonstrated conclusively that the Daewoosa victims who
    were the defendants in a government-supported civil suit to
    recover the amount of their settlement awards had received
    interest-free loans against the settlement amount in excess
    of the actual amount and had pledged the settlements
    themselves as collateral for those loans.  The labor
    companies were allowed to bring the suit only after the
    victims refused to honor the terms of the initial promissory
    note.

    ¶7. (SBU) Regarding the claims of labor trafficking victims
    being unable to find employment after returning to Vietnam,
    this problem is not unique to the victims and should not be
    considered retribution.  A July, 2003 case study on labor
    export in Vietnam done under the auspices of the UNDP Asia
    Pacific Regional Initiative on Trade, Economic Governance,
    and Human Development, which surveyed households in a rural
    district of Ho Chi Minh City (Cu Chi) with a high level of
    participation in temporary overseas employment (TOE)
    revealed that only five percent of TOE participants found
    employment as "workers" after returning home.  The rest
    either returned to the fields, took up previous jobs as
    public officials, engaged in self-employed handicrafts or
    trading, or (in 25 percent of cases) were unemployed.  The
    25 percent figure is in notable contrast to the 5 percent of
    respondents who indicated that they were unemployed before
    going overseas to work.

    We recommend removing this action from the list.

    ¶8. (SBU) Proposed:
    -- Provide greater protection for Vietnamese workers sent
    abroad by state-controlled labor export companies,
    including:
    an adequate mechanism for addressing worker complaints and
    assuring them they will not be punished for raising
    complaints (vice the current practice of deporting
    "troublemakers");
    in contracts with state-owned companies: eliminate up-front
    fees for "processing" and transportation that are most often
    a contributing factor to debt bondage; and the elimination
    or reduction in the financial penalties for failure to
    complete the duration of the contract (suggest using a
    bonus/incentive system instead).

    Embassy response:

    The reform of Vietnam's enterprise laws is opening up a
    great number of industries - including labor export - to the
    private sector.  We do not want protection for workers
    limited to those sent abroad by state-owned companies, so we
    propose dropping "state owned".

    ¶9. (SBU) Embassy agrees with recommending the creation of an
    adequate mechanism for addressing worker complaints.  We
    recommend removing the specific reference to "punishment for
    raising complaints" and the reference to "deporting
    troublemakers."  The reason for this is that the GVN is
    working hard to combat the perception in key labor consuming
    countries (particularly Taiwan and Korea) that Vietnamese
    workers are an immigration risk.  The current terms of labor
    export contracts with Taiwanese and Korean companies and
    Vietnamese workers stipulate that the workers may remain in
    Taiwan and Korea only as long as they are filling the
    position specified in the company specified in the contract.
    According to Andy Bruce, IOM's Chief of Mission in Vietnam,
    dissatisfied workers do not have the option to move to
    another company within Korea or Taiwan - if they do so, they
    become illegal workers in those countries.

    ¶10. (SBU) This system seriously reduces the power of
    individual workers, giving them the option to either accept
    the current situation, return to Vietnam, or become illegal
    workers in Taiwan or Korea.  For Vietnam, accepting these
    terms is the price of competing with Thailand, the
    Philippines, Indonesia, and China for labor export markets.
    The deportation of workers who are involved in disputes with
    their employers overseas is a host-country decision and not
    within the GVN's power to change.  We should leave it out of
    our action plan.

    ¶11. (SBU) Regarding contracts with labor export companies
    (again, we should eliminate "state-owned"), we are concerned
    that we are involving ourselves too deeply in a complicated
    debate over the nature of labor export in general.  A number
    of experts, including the drafters of the UNDP study
    mentioned above and the drafters of a confidential January,
    2004 study by the French Government, have noted the burden
    on workers that the high cost of securing a contract to go
    overseas represents.  The studies suggest - but do not
    conclude - that the debt that workers take on encourages
    them to break their labor export contracts in favor of more
    lucrative market-rate jobs once they reach the destination
    country.  The result of this is to expose the workers to the
    risks of living in a country illegally and to aggravate
    tensions between the host governments and the GVN, which is
    then criticized for allowing its citizens to illegally
    immigrate and break labor contracts.

    ¶12. (SBU) We have discussed this phenomenon with a variety
    of interlocutors, including such recognized trafficking
    experts as IOM and UNICEF, and the unanimous conclusion is
    that while these fees may create problems for workers and
    the labor export system, they do not represent a causal
    factor for labor trafficking.

    ¶13. (SBU) One reason for this is that the debt that workers
    take on in order to purchase a TOE contract is not held by
    or connected to the labor export company or to the future
    employer.  The UNDP study determined that 60 percent of
    households with people engaging in labor export sell assets
    to raise the necessary funds.  67.5 percent borrow money
    from relatives at an average rate of 6.12 percent per year,
    and 30 percent borrow from banks at a rate of 12.12 percent
    per year.  Loans from the labor export company or the
    employer are not listed as financial sources for
    participating in TOE at all.  ("Other sources" is a category
    that might represent loans from the labor export company or
    the employer.  However, it includes only 2.56 percent of
    households.)  Our conclusion is that while indebtedness may
    be factor limiting the options of Vietnamese laborers
    abroad, neither the employers nor the labor export companies
    control that indebtedness.  The laborers have limited
    financial options, but are not in a condition of debt
    bondage.

    ¶14. (SBU) We note that in all of our discussions about the
    high cost of securing TOE, none of our interlocutors have
    mentioned trafficking as a consequence.  As the French put
    it, "it is because of the high cost of leaving to work
    abroad that most Vietnamese workers leave the enterprise to
    take illegal but better-paying work.  It is said that if the
    cost of leaving were less, there was no corruption and the
    selection could be done in a transparent manner - perhaps a
    lottery system - more Vietnamese workers would respect the
    contract."

    ¶15. (SBU) In fact, in our increasingly extensive review of
    the situation of Vietnamese export laborers, the only case
    of labor exploitation rising to the level of trafficking
    that we can find occurred more than four years ago - the
    Daewoosa case.  Other cases involving abuse of the labor
    export system involve defrauding workers, stealing money
    from them, sending them to export labor markets without
    actual jobs, abandoning them overseas, absconding with their
    salaries, or misrepresenting the actual nature of work.  We
    have seen no cases - reported or confirmed - involving
    involuntary servitude of Vietnamese workers since the
    Daewoosa case of 1999.

    ¶16. (SBU) What we have seen is a systematic effort by the
    GVN to clean up the labor export system and find a way to
    achieve the benefits of labor export (hard currency
    remittances, reduced demand for social services, lower
    unemployment, and technology transfer) while minimizing the
    negative impacts on workers.  Mark Sidel, a professor of law
    at the University of Iowa and a severe critic of the
    existing labor export system in Vietnam, acknowledged this
    in a paper he gave at a 2003 legal reform conference, saying
    "at the central government level, many honestly do wish to
    maintain an appropriate, even just balance between law as
    the protector of rights under a marketizing system, and law
    as the facilitator and accelerator of that market growth."
    Sidel ultimately criticized the effectiveness of this effort
    (his central thesis was that corrupt local officials,
    police, and labor export companies profit handsomely from
    Vietnamese export labor) but did not dispute the central
    government's desire to minimize abuses.

    ¶17. (SBU) Considering the sensitive and fundamental nature
    of the debate over the balance between protecting workers
    and ensuring that contractual obligations with receiving
    countries are honored, and the fact that the current system
    has produced only one known trafficking case more than four
    years ago, we recommend changing this action to:

    -- Provide greater protection for Vietnamese workers sent
    abroad by labor export companies, including:
    an adequate mechanism for resolving disputes between workers
    and labor export companies;
    reform of the system of fees and penalties paid by workers
    to minimize the financial pressure on workers that can lead
    to abusive situations.

    ¶18. (SBU) Proposed:
    -- Use existing laws to increase investigations, arrests,
    and prosecutions of traffickers.

    Embassy concurs.

    ¶19. (SBU) Proposed:
    --Train police and immigration officials, judges, and
    elected officials on trafficking issues and how to deal with
    victims of labor and sex trafficking.  Incorporate
    trafficking in persons training at the Ministry of Public
    Security to train law enforcement officials.  Provide
    information on how many officers received the training and
    on how the training is being implemented in the field.

    Embassy recommends moving this entire action to the
    "consider for action" section vs. the "must do" section.  We
    believe the GVN has already begun doing this in cooperation
    with the UNODC on a U.S.-funded project, and the recent
    expansion of the anti-trafficking special units to cover the
    entire country is a welcome development.

    ¶20. (SBU) Proposed:
    -- Adopt a national action plan to combat trafficking in
    persons.

    Embassy concurs.

    Embassy also concurs with all "consider for action" areas,
    and recommends adding "Vietnam should ratify as soon as
    possible the Protocol to prevent, suppress and punish
    trafficking in persons, especially women and children, of
    the UN Convention against Transnational Organized Crime."

    ¶21. (SBU) Tactically, we must ensure that the presentation
    to the GVN is not perceived as a USG ultimatum.  If the
    action plan comes off as a threat to keep Vietnam on the
    Watch List or downgrade it to tier 3 if certain benchmarks
    are not met, the GVN will reject it.  Even if the actions
    suggested are positive ones the GVN is inclined to carry out
    anyway, the offices and individuals working on TIP issues
    cannot afford to be seen to be giving in to USG demands.
    The GVN has demonstrated that it is independently committed
    to tackling the TIP problem, and we can present the action
    plan as a USG recommendation of areas on which the GVN can
    focus its efforts.  If we try to use it as a "stick" to
    compel GVN action, we will certainly be disappointed.
    BURGHARDT

`