Wednesday, September 27, 2006

Unions fight to restrain `market forces'

Unions fight to restrain `market forces'


Headlines such as “Workers strike against impossible quotas” and “Wildcat strike forces workplace reforms” abound in the Vietnamese media. They not only indicate the proliferation of labour struggles, but also the unabashed sympathy of the state-controlled media with the workers.

Speaking about the hundreds of strikes in Vietnam in recent years, Chau Nhat Binh, head of the international relations division in the Vietnam General Confederation of Labour (VGCL), noted that “almost every strike has been technically illegal”, as it didn't follow the lengthy procedures in the labour law. Nevertheless, the VGCL regards “every one” of these technically illegal strikes to be justified.

In Vietnam's precarious balance between mobilising private and foreign capital to help develop the war-ruined country and trying to maintain a dominant state-owned sector and a “socialist orientation”, the role of organised labour is crucial in stopping “market forces” from undermining labour standards.

The “market mechanism” has certainly challenged such standards. Yet while Vietnamese trade unions resolutely denounce bosses who abuse workers' rights, they almost never initiate strikes.


Virtually every strike has been a “wildcat” action led by spontaneous workers' committees. Binh explains that it is often difficult to get union members in privately owned factories because many workers are from rural areas, intending to work temporarily during the “down season” between sowing and harvest. They have no culture of unionism, don't want to fork out for union dues and don't want to lose wages through strikes.

But union membership grows due to experience — these workers find they are brutally exploited and so launch wildcat strikes without the unions. Even when unions are present, the official procedures would delay the strike. Yet, though seemingly sidelined, the union intervenes and forces the bosses to submit to the workers' demands — “in 100% of cases”, according to Binh. In this process, the union recruits the workers.

These strikes belie hopes among capitalist investors that rural migrants are easily exploited. A factor in this may be that most rural migrants still have some land due to past revolutionary land reforms.

Binh's claim is backed by countless reports in the media, which routinely report the intervention of the district labour federation, the local branch of the labour ministry and the police to force bosses to relent to the workers' demands.

The evidence of this is also backed by a more hostile source — the US commerce department. A 2002 US commerce department report (available at ) noted that “although the majority of the strikes did not follow proper legal procedures, they were tolerated by the government with no reports of retribution against the strikers”.

State proclivities also tend to aid victory for workers. The report claimed that “labor rights sentiments in Vietnam are backed by a conciliation system and a judiciary sympathetic to labor demands”.

Binh admits that the VGCL at times has conflicting views on labour issues with the government, but claims the government is generally supportive. He claimed globalisation may promote a “race to the bottom” in terms of wages and conditions, but the Vietnamese unions were not worried about this because they are confident about fighting its negative impacts.

The VGCL “refuses to accept investment under any conditions”, said Binh. It sometimes expels companies from the country. He claims that union actions in the late 1990s have even tamed the rogue footwear company Nike.

Not everything goes their way — recent amendments extended maximum overtime allowed from 200 to 300 hours per year, capitulating to lobbying by foreign investors, despite the VGCL's objections. However, this is far less than what the bosses wanted, and they have to go through detailed procedures to prove the necessity of overtime above 200 hours.

Contrast with China

The Vietnamese government sees the role of Communist Party cadres in unions as defending workers from the ravages of its own “market” policies. The labour code allows the right to strike and the spontaneous formation of new unions — at variance with the situation in neighbouring China.

This contrast was shown in a March 2003 report by Anita Chan and Hong-zen Wang into Taiwanese bosses in China and Vietnam (“Raising Labor Standards, Corporate Social Responsibility and Missing Links — Vietnam and China Compared”, available at < href="">).

Chan and Wang found that, while Taiwanese employers expected Vietnamese workers to be easier to deal with than mainland Chinese workers since Vietnam is a poorer country, the reverse was true. The bosses “observed repeatedly that they had to abide by the law” in Vietnam, and “were surprisingly frank about the harsh management methods they personally had used in China”.

One Taiwanese boss complained: “You can't even touch the Vietnamese workers, let alone abuse them. In China, physical punishments were very common, including even hitting, like in the military.”

Another claimed the problem with Vietnamese workers was that “their human rights awareness is very high. Taiwanese have to face a lot of labour disturbances and strikes. They easily stage mass protests. Their labour and democratic consciousness is very high... This is not just a problem at my factory, this is a problem of the entire society. In Vietnam their protection of labour rights is too stringent.”

Regarding overtime, Vietnamese workers said they wanted one day off a week and an absolute maximum of 12 hours overtime. “If the managers pushed them too far, they indicated they would just go on strike”, Chan and Wang reported.

By contrast, “in China, during busy seasons workers often work for a few months without any days off ... a survey of China's footwear industry found that in Taiwanese enterprises, the average number of work hours was 11 hours each day ... (in) the export toy industry in Guangdong in the busy season workers laboured for up to 14-18 hours with no days off.”

A fundamental difference is the attitude of the governments. A supervisor from China trained by the Taiwanese to work in Vietnam claimed that “Chinese workers' conditions are more miserable than the Vietnamese, whose rights are better protected. Why is there such a difference? The government. The Chinese government wants to make money and therefore just neglects workers' rights.”

State-owned enterprises

While most reports are about labour activity in private and foreign companies, Binh claims 30% of strikes take place in state-owned enterprises (SOEs). Overall, however, SOE wages and conditions for manual workers are far ahead of those in the other sectors.

In the garment industry, for example, average wages in SOEs are around one-third higher than in the other sectors. While almost 90% of workers in SOEs have labour contracts, only 40% do in private enterprises. While workplace accidents have declined in SOEs, they have risen between 18% and 31% in private enterprises.

What attitude does the VGCL take towards “equitisation”, the partial rivatisation of a portion of the state sector, either to rescue debt-ridden SOEs, relieve the state of control of smaller firms, or inject private capital to improve “efficiency”?

Binh said the VGCL views equitisation as a “dilemma”. In economically weak SOEs, it injects more investment funds, so profits rise and so do wages. But this depends on the percentage of private and state investment and the position of workers within the process.

Binh claims that despite the regulations and official limitations on the size of private shareholdings, “most equitised enterprises end up more in private than in state hands. There have been coups d'etat when private interests seize management from workers — workers are given shares, but in many cases, management buys them all out shortly after equitisation”, though it is officially frowned upon and technically illegal.

Therefore, trade unions “are very cautious about equitisation and opposed to doing anything without clear planning”. In fact, there is evidence that workers are having some influence in keeping the process on hold, despite Binh's negative examples.

There is much hype about equitised enterprises paying higher wages or not laying off workers. However, this is because equitisation has so far succeeded mainly in enterprises where it would not affect workers' jobs. The World Bank is bemoaning the “slowness'” of the equitisation process — it is years behind schedule.

A survey of equitised enterprises found that 83% were paying higher salaries, but that the old management “have not adapted their business philosophies and have failed to renovate the operations of their enterprises”. Translated from “reform”-speak, Chu Hoang Anh from the labour ministry said that “if an enterprise wants to make big changes, they have to convince workers to change or nullify their labour contracts. This is not easily accepted by employees.” Thus it seems if workers don't agree, it won't happen.

From Green Left Weekly, December 10, 2003.

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