Workers fight foreign bosses and win

VIETNAM: Workers fight foreign bosses and win

Michael Karadjis

Beginning late last year, tens of thousands of Vietnamese workers downed tools at dozens of foreign-invested enterprises (FIEs) in southern industrial zones around Ho Chi Minh City, demanding implementation of a 40-48% wage rise decreed by the Vietnamese government in September.
While strikes are common in Vietnam — some 900 have been reported since 1995 — the current wave is the largest in recent Vietnamese history.
Some strikes have turned violent. According to the January 26 Christian Science Monitor, “In the Song Than industrial zone, some smashed windows and attacked machines, spurred on by ringleaders who distributed handwritten messages urging action against low pay and poor conditions, say factory owners”.
Most Western media has reported that the strike wave ended around January 6 when the Vietnamese government relented to the strikers’ demands for a 40% pay increase. The January 28 Economist reported: “What is especially unsettling for investors is how the workers got their extra dough. Since late December, wildcat strikes have swept through the industrial zones surrounding Ho Chi Minh City. Apparently caught off-guard, the government issued a decree earlier this month raising the minimum wage in foreign-owned factories. Most strikers have now returned to work, but some have not, and investors are fuming over production stoppages and a higher wage bill.”
However, the Vietnamese government’s announcement to foreign investors that it is doing them a service in ending the strike wave by decreeing a massive wage rise is to some extent tongue in cheek, because the government decreed the rises long before the strike wave.
As the September 25 Vietnamese daily Saigon Giai Phong (Liberated Saigon) reported, “The Ministry of Labour, Invalids and Social Affairs [MOLISA] has called on FDI [foreign direct invested] enterprises to increase the minimum wages they pay their employees. It wants firms based in Hanoi, HCM City, Dong Nai and Binh Duong to pay at least 870,000 dong [about US$55] per month, those in Hai Phong, Ha Long, Da Nang, Nha Trang, Vung Tau and Can Tho to pay 790,000 dong [$50], and those in other areas to pay 710,000 [$45].” The new minimum salaries replace the previous minimums of 626,000, 556,000 and 480,000 dong respectively.
This decision was due to earlier lobbying by the Vietnam General Confederation of Labour (VGCL), the country’s peak trade union body.

Bosses delay pay rise

The strikes broke out because many foreign investors asked the government to defer the wage rise until after the Tet (Lunar New Year) holiday, beginning on January 28, because they “couldn’t afford” the wage rise and also pay the Tet bonus. The Tet bonus is the equivalent of a 13th-month salary that Vietnamese workers are entitled to. The government thus left it up to the bosses and workers to bargain over when it would be implemented.
Figuring they could “afford” not to get the rise less than the bosses could “not afford” to give it, the Vietnamese working class showed its bargaining strength, with the full knowledge that it had the law, the open sympathy of most Vietnamese, the discreet sympathy of the government, and the active support of the VGCL on its side.
According to the January 11 Viet Nam News, the VGCL claimed “the reason for recent strikes is that companies have announced wage policies and bonuses late. Also, companies have yet to improve working conditions and meals for labourers, while at the same time requiring them to work overtime.”
The government did not announce a new policy to end the strike wave, but merely stated that the existing policy had to implemented no later than February 1.
Foreign investors, governments and the Western media responded with hostility to the workers’ struggles. The Economist quoted bosses claiming that “outside agitators stoked the protests, distributing notes at factory gates while police stood idly by”, and noted that “some observers find it implausible that [the protests] could occur without the prior knowledge of the ruling party, which forbids independent trade unions. Workers are allowed to join only a pliant, party-affiliated union.”
But this fiction of “a pliant, party-affiliated union”, which Western “democracies” and their pliant media pretend to be concerned about, has blown up in their faces, and they are now revealing that it is precisely “pliant” unions that they would prefer to the militant, Communist Party-affiliated union leadership in Vietnam.
The Economist goes on to ask, “Why didn’t Vietnam crush the illegal strikes?” Taiwan’s deputy foreign affairs minister Michael Kau stepped in to demand the Vietnamese government “protect Taiwan investors and their businesses”, warning that if the government did not deal with the strikes properly and quickly, it would have an adverse impact on Taiwanese investment in Vietnam.
The European Chamber of Commerce wrote to the prime minister, Phan Van Khai, to warn him that investors set up shop in Vietnam because, they imagine, “the workforce is not prone to industrial action”.

Government support

In reality, the reason the Vietnamese government did not do the bidding of investors from “democratic” countries and crush the strikes is because it never does. A hostile 2002 report by the US Department of Commerce, Socialist Republic of Vietnam — Determination of Market Economy Status, asserted that although most strikes are led by spontaneous workers’ groups rather than official unions, and though most “do not follow proper legal procedures, they are tolerated by the government with no reports of retribution against strikers”.
I have also observed during my four years in Vietnam that in virtually every strike reported, the official Communist-led unions stepped in and forced bosses to relent to workers’ demands. In one example during a similar strike wave last October-November, reported in the November 25 Viet Nam News, the 1000 workers who struck at the Hong Kong-owned Rieker footwear factory only returned to work “after a meeting between company’s management and the provincial Nam authorities and Quang Nam Labour Federation”, when “the company’s management agreed to a worker pay raise, better lunch and better working conditions” — i.e., the strikers’ demands.
The VGCL and its campaigning newspaper Lao Dong [Labour] continually supports strikes, even though it rarely organises them. Chau Nhat Binh from the VGCL’s international department told Green Left Weekly that many plants employing rural migrants do not have union chapters, because the migrants initially think they want to keep out of trouble. However, once they discover the nature of exploitation and launch “wild-cat” strikes, and the VGCL helps them win their demands, they sign up as union members.
This observation is backed by the Economist Intelligence Unit, which claimed in an April 2, 2002 Risk Wire report that “labour rights sentiments are backed by a conciliation system and a judiciary sympathetic to labour demands”. Likewise, investors complain that Vietnam’s law protects employees more than employers. According to the manager of Nike Vietnam, quoted in a December 21, 2004 VDC Business Newsletter, when workers go on strike unlawfully, officials support them!

Minimum wage

Minimum wages at foreign enterprises are already set at about double the domestic minimum wage. However, the domestic minimum of US$20 per month is an extremely low figure that virtually no-one is paid. It is a minimum safety net for small household businesses that employ poor farmers casually, in the “idle period” between crops, when any extra cash is welcome.
According to Pham Minh Huan, director of MOLISA’s salary policy department, every employee at a state-owned enterprise (SOE) is paid more than the minimum — at least 35% higher for unskilled workers and 134% higher for newly recruited, skilled employees. On top of that, SOE employees share the profit via the bonus and welfare funds. When I visited a major state-owned cement plant last year, employees’ salaries ranged from $200-$250 per month, and at a major state paper mill, from around $120-$180.
On the other hand, while the FIE minimum rate was designed as a bare minimum and companies were expected to designate appropriate salaries for workers based on skill levels, length of service and other factors, many FIEs paid unskilled workers the absolute minimum, and some paid their skilled workers only 1-2% higher.
Thus in practice, many domestic firms, particularly state-owned firms, were paying higher than foreign firms despite having a minimum rate of only half the latter. Nguyen Thi Thanh Mai of MOLISA told the October 15 Viet Nam News that since the last minimum wage rise at foreign firms in 1999, the price of food and consumer goods had gone up nearly 40% and 25% respectively, and in practice, average monthly wages at Vietnamese firms had risen 35-50%, but “the minimum wage at foreign-invested firms has stayed the same”.
In January, MOLISA clarified that the new minimum wage applied only to unskilled labour, and that the monthly salary for workers who have done vocational courses must begin at least 7% higher. In addition, to prevent companies from “bargaining” over conditions when delivering the rise, MOLISA stressed that “allowances, bonuses, travel expenses, meals, and housing fees paid to staff by FIEs would be maintained when the new minimum pay is applied”. The VGCL also required enterprises to immediately announce Tet bonuses.
The current rise in the FIE minimum rate is also good news for workers in local firms, because MOLISA announced in October that the department was planning to introduce a single minimum wage for all forms of business in 2008.
To enforce the new law, deputy chairman of HCM City People’s Committee Nguyen Thien Nhan asked trade unions to make up-to-date reports on wages being paid at FIEs. The VGCL has instructed grassroots trade unions to oversee the payment of wages and bonuses and visit FIEs to help workers understand the government’s decision.
Not all workers returned to work immediately. On January 9, workers at the Korean-invested footwear company Daeyun in Linh Trung IP No.1 walked out, refusing to work overtime, because of the management’s delay in making a decision on the increases.

http://www.greenleft.org.au/2006/656/7431

From Green Left Weekly, February 15, 2006.