Actors in a Written Play:

Trade Union in Vietnam Taiwan Company

 

 

 

 

Hong-zen Wang

 

Assistant Professor

Division of Futures Studies

Tamkang University, TAIWAN

 

 

Keywords: Taishang, Trade Union, State, Capital, Strike

 

 

 

Abstract:

This paper argues that trade union under capitalist strict control in Taishang company should be understood from the Vietnam socio-political structures. In a party-state country like Vietnam, there is no independent and free association to express their own interests. Though the state seems quite supportive of establishing trade union in foreign company, it will not encourage the emergence of independent trade union when it wants to continue to control of civil society and to attract foreign capital.

 

 

Paper presented at “International Capital, Labour and Ethnicity: Industrial Relations in Southeast Asia”

PROSEA, Academia Sinica, 2000/12/8
Actors in a Written Play:

Trade Union in Vietnam Taiwan Company

 

Hong-zen Wang

 

Assistant Professor

Division of Futures Studies

Tamkang University, TAIWAN

 

Introduction

Accompanying the increased overseas investment from Taiwan capital, there is a surging interests in the labour practices in these Taiwan companies. Research interests from business school focus mainly on human resources management, and their concerns are ‘how to effectively manage industrial relations’ in the Taishang companies (Huang and Si, 1998; Zhao, 1998). However, this kind of research is basically gazing Vietnam from Taiwan’s ‘orientalistic’ perspective, without any reference to local historical and social structures. For example, Zhao used systemic control model to categorize human resources management of Taishang in China into ‘input control’, ‘behaviour control’ and ‘output control’, which aims to reach the maximum efficiency for the whole factory.

 

Researches from sociological works are more critical. Tseng et al (2000) find that labour practices in Indonesian Taishang companies tend to be authoritarian. In their research on Vietnam Taishang, Wang and Hsiao (2000) use ‘relational social embeddedness’ to explain the migration patterns of Chinese professional transients working in Vietnam, and try to explain the role of these Chinese in the labour control process. Chou et al (2000) point out that the policy of ‘localization’ in Malaysian Taishang companies result in the employment of Malaysian to be department directors. Kung further distinguishes four ethnic groups in the Malaysia Taishang companies. Malaysia is the most aloof group from Taishang. Taishang and Bengal become an alliance in the labour process. Ethnic Chinese plays the role of middleman in the hierarchy, and ethnic Chinese with Taiwan tertiary education credential is the core cadres of the company (Kung, 1999). In another paper, Hsiao and Kung criticize the idea of ‘ethnic resources’, and with the Malaysia Taishang examples, they find that the so-called ‘Taiwan experience’ is more important in the development of industrial relations for management (1998). Wu (2000) uses the concept ‘fictive ownership rights’ to explain the business model of Taishang in China. This kind of business model is used to deal with bureaucratic hassles and corruption.

 

Though these mentioned researches by Taiwan scholars have discussed about the labour practices, no one has discussed the role of trade union in the labour practices, and the impact of foreign capital on the development of trade union. Chan and Norlund’s research on China and Vietnam unions touches the issue of state, capital and trade union relationships in foreign capital companies. Their conclusion is that Vietnam government is more supportive than Chinese government to protect worker’s rights (1999). Vietnamese trade union is even able to influence government’s policy. This argument contradicts to our common understanding of the corporatist Vietnam state regime, where most mass organizations are incorporated into state’s control and its interests can only be represented by the state sanctioned organizations (Jeong, 1995; 1997). The state-society relations, classified by Kerkvliet, can be “mono-organizational socialism”, “mobilization authoritarianism” or “penetrating civil society” (1995: 298-9).

 

Chan and Norlund’s is a view of the last one, ie., social groups can shape society. However, their conclusion cannot explain one phenomenon: why up to now there is no independent union emerging if the government is so supportive? Does the problem lie in the strong capital control? Or are there other reasons to hinder the emerge of independent union?

This paper will argue that the present situation of Vietnam worker’s union is the result of political control by the party-state. In this socio-political structure, any independent organization is hard to speak and act for its members welfare without the government’s consent. Because there is no proper social milieu for an independent group to emerge, it is still a long way for the Vietnam trade union to represent its worker’s welfare.

 

The data in this paper is based on my three fieldwork trips to Vietnam in 1999. We interviewed 40 companies, and 14 related persons like Taiwan officials and those people who had worked in Vietnam. The companies are located in the neighbourhood of Ho chi Minh and Hanoi city[1].

 

 

Government in Dilemma

 

Let me start from the status of trade union in Vietnam. According to Chan and Norlund (1999), there are three characteristics of Vietnam unions: firstly, though Trade Union Law rules that trade union is under Vietnamese Communist Party (VCP) leadership, it is more willing to hand down its power to trade union. Secondly, trade unions have the right to join international trade union organizations and accept donations from overseas. Thirdly, newly established unions are dominated by the management, and it is regarded as a pressing problem for the government.

 

Their findings are interesting, but it also raises a puzzle. On the one hand, the government supports the development of trade unions, but on the other, the government is not able to reach its influence into the foreign capital companies. If so, we are curious about two questions: firstly, how does the government react to labour disputes in these foreign capital companies? Is it labour friendly? Or the government is always on the side of capital? Secondly, why the government cannot intervene in the industrial relations? Why does the capital can control the workplace unions so effectively? Let’s review the government’s foreign capital policy to understand its structural constrains.

 

Foreign Investment Policy

 

After the Doi Moi policy in 1986, Vietnam government endeavors to attract more foreign capital to invest there. In December 1987, it passed the most generous foreign investment law in Asia to attract overseas capital. In January 1998, to fend off the influence of Asia financial crisis, it announced a more generous revised law. By the end of March 1999, the government has approved 2,623 projects, totaled US$35.3 billion. Taiwan’s investment in Vietnam is close to US$5 billion by the end of June 2000, ranked as the second largest foreign investor (IDIC, 2000/11/10).

 

Beresford and Fford have found that this door-open policy relates to the interests of different groups traced back to the late 1970s (1997). Is so, then we can expect that different groups will have different opinions to the foreign capital. For example, politicians emphasizing worker’s rights would hope to have a strong union vis-à-vis foreign capital. Chan and Norlund say that Vietnam government and VCP are happy to see this development (1999:215). If we compare the labour policy in Malaysia, where setup of a new trade union should get permission from the Ministry of Labour, and the government does not encourage the establishment of trade union in foreigner-invested company (Kung, 2000: 18), Vietnam government should be considered a union-friendly regime. However, we are more concerned about the underlying structures which might not the same as our first sight of the government’s laobur policy.

 

Government’s Labour Policy

 

How is the real situation of implementation of this labour-friendly policy? Chan and Norlund found that most strikes, over 70%, were in foreign companies. They said that the government regarded this situation as serious (1999:211-212). However, Bersford in another article said that the government did not have any intention to intervene in these disputes (1997: 192). How do we explain the two different interpretations of state’s action toward strikes?

 

International Herald Tribune reported that there were no more than 3,000 workers involved in strikes in 1994. The number rose to more than 12,000 in the first half-year of 1997. Vietnamese official openly criticized foreign companies from Taiwan, Korea and Singapore for their labour-abused disciplines in the workplace. The official trade union VGCL also claimed that it would act up to protect worker’s rights in these foreign companies (Senser, 1997). This sort of action was extraordinary, for it was the first time that the Vietnam government publicly blamed overseas capital. According to my interviews, most Taishang faced strikes in their factories at that time. An informant in Tan Thuan Export Processing Zone (EPZ) described:

It was a hard time for every new company here. Strikes were like contagious virus spreading everywhere. No one is exempted. I don’t know why, but there must be something wrong because all new companies, including Japanese and Korean companies, had the same problem.

 

Our data shows that strikes occurred in all interviewed Taiwan companies in Tan Thuan EPZ. The reasons of industrial disputes were: the raise of overtime pay, year-end bonus, the raise of subsidy, the working hours, etc. These disputes are basically labour-conditions related.

 

If so, why did most strikes happen in the foreign companies, and not in the state owned enterprises (SOEs)? Does it mean that labour conditions in SOEs are better? In a 1993 survey, wage in private sector was higher than that in public sector when the workers with high school or higher education (Moock, 1998: 11). As the requirement for worker’s education in Taiwan companies is secondary schooling, we can reasonably say that payment in the foreign companies is higher than in SOEs. The average wage in public sector in 1998 was US$55. The legal minimum wage, starting from July 1999, is US$45 in HCM and Hanoi; US$40 in the adjacent provinces of the two cities and Haiphng, Van Tau, Bien Hoa; US$35 in other provinces. Overtime work should be no more than four hours per day, and no more than 200 hours in a year (IDIC, 2000).

The minimum wage is normally not the money a worker receives. In our survey, the wage in five companies in July 1999 is described below:

A: US$58, which was the addition of basic wage, overtime work pay and subsidy, deducted insurance fee, income tax and trade union fee.

B: US$40, plus overtime work pay and subsidy pay.

C: US$100 for staffs, and US$40 for on-site workers.

D: US$43-57 for skilled labour; US$ 71 for very good skilled labour; US$35 for newly recruited workers, plus a free meal.

E: US$42, plus subsidy, free lunch. One month wage bonus at the year end.

 

 

 

It shows that most Taishang pays legal minimum wage to workers, plus some benefits. Though it looks like the wage is lower, we should not forget that the wage in SOEs was the average of blue- and white-collar workers, while the minimum wage paid in Taishang companies was for blue-collar workers. In addition, these Taiwan companies just started their operation for one or two year, and most workers were not senior enough to get high pay, according to one’s working years in the same company.

 

A Vietnamese company paid US$18 to it workers. After it had joint venture with a Taiwan company, the wage was raised to US$35, almost doubled, to meet the legal minimum wage. An interviewed Taiwanese boss told me that the wage in his company was good, US$45, compared to other Vietnamese factories in his neighbourhood. It was piece-work wage, and a skillful worker could earn as high as US$70. In a subcontracting factory, the Vietnamese factory paid US$36, about 80% of minimum wage, to workers, but working time was 16 hours. Nor can we expect that the situation in SOEs is better. An informant signed a cooperative contract with one state enterprise[2]. She said that the wage in this state enterprise next to her office was paid by piece-work wage, and there was no minimum wage set.

 

From the comparison of wage difference, we cannot say that labour conditions in foreign-owned company are worse than Vietnamese company. I also get the impression from fieldwork that Taiwan company there does not have the trouble of recruiting workers to work in their company. Official unemployment rate is 2.21%, but underemployment rate is as high as 25.8% (Statistical Publishing House, 1999: 536, 638). So any job opened will attract thousands of applicants. Regarding the turn-over rate of workers, most Taiwan companies reported that the rate was less than 5%, except one in Hanoi, whose turn-over rate was 30%. The reasons to leave are personal, eg., live too far away from factory, marriage, etc. We do not have the data of turn-over rate of SOEs, but 5% turnover rate is quite reasonable and stable.

 

If labour conditions in foreign companies are not so worse, compared to Vietnamese companies, why most strikes happened in foreign-owned companies? An informant pointed out a key factor:

Vietnam government has an ambivalent feeling toward foreign capital. On the one hand, it wants to be rid of poverty, and on the other, it fears the corruption from development. It welcomes foreign capital, but fears the exploitation of labour.

 

It shows that Vietnam government wants to protect worker’s rights. Labour law enacted covers almost every field of labouring process, and all foreign companies is required to obey the law. One Taishang told me that he strongly recommended all Taiwan businesspeople read carefully the labour law, for he was sued once for neglect of a rule. Vietnam government seems want to enforce the labour law to protect worker’s rights.

But if foreign company does not obey the rules, what the government can do if it does not want to offend foreign capital? Strikes become one of the best means to concretize its policy. Whenever there is a strike in the foreign company, the government can openly intervene in the disputes, and to show its power to implement its labour policy. No wonder one informant directly pointed to the government hidden behind the scene of strikes. Why did he have this kind of view? He said: why the government officials always know when to come when there was a strike? The local Labour Office came and then asked the company to organize a trade union. For what? The official said: for your company to handle the industrial disputes.

 

This process also again confirms the finding by Chan and Norlund that Vietnam government are more likely to support trade unions. Or at least we can say that the government hopes that trade unions in foreign companies can protect worker’s rights.

 

However, the government should be cautious about its move to support a strong trade union. If it openly supports a strong union to fight against foreign capital, it will undoubtedly scarce away investors, which violates the interests of economic development powered by foreign capital. As another interviewee pointed out that the police, labour office staffs and party cadres came at once when his company had a strike. They wished his company to set up a trade union in three months. But the informant also felt that these officials did not want to push him too far, for in the 1998 Asia financial crisis period, there had been a decline of overseas investment from Korea and Japan. Taiwan was the top investor at that time, and the government also worried about the retreat of capital. This dilemma happens in all courtiers who want to attract more foreign capital to invest. The strikes in Taiwan-invested company Chentex tell the same story: the government is sided with the management because Chentex threats to cancel its investment in Nicargua. Vietnam government also faces the same dilemma. We hear the words of the Taishang mentioned above again: Protect workers? Or Encourage capital?

 

The Emerge of an Independent Trade Union？

 

Even we believe that the government is willing to protect worker’s rights, and forcibly asks foreign company to let trade union organized, we still doubt how much the government can do in the workplace to fulfill its claims to protect worker’s rights.

 

We talk about this problem from the workplace union’s relations with the business and government. If trade union works closely with the government, and the government supports an independent trade union, we will be able to say that the government’s attitude toward trade union is very positive and supportive. However, from our interview data, it seems not the case. Most trade unions, or more exactly, no trade union, is independent from the capital’s control, and the government does not care about it at all.

 

In a country without any free association, it is hard to imagine the emergence of an independent union. Though the economic growth in Vietnam made the state  reduce its ability to control the civil society, it is far away seeing any independent political organization to replace the role of state apparatus in the society (McCormick，1999：174-175). Any independent association is seen as a threat to the established regime, and is not tolerated by the state. One monk was arrested in October 2000 just because he tried to deliver aid to people stricken by floods. The government punished him for his independent action out of the state-organised effort (Economist, 2000/11/11: 32). In the Trade Union Law, the first article is “A trade union is a large political and social organization of the working class voluntarily established under the leadership of the Vietnamese Communist Party.” (National Political Publishing House, 1996:225). So even there are some NGOs in recent years, it is not yet evident that these organizations conform to the definition of civil society which emphasize the independence from the state (Gray, 1999). The widely reported strikes in 1997 could be just another social movement initiated by the government, as Heng said that the state-media relations in Vietnam is in the form of “mono- orgnaisational socialism” where major decisions are made within the bureaucracy (1999). The widely reports on strike in foreign companies at that time should be observed from this perspective, ie., they were motivated by the state rather than society motivated.

 

The history of the workplace union we discussed above clearly tells us that the emergence of trade unions in these foreign companies are dependent on the state’s power, and not independent from the state. Good to get support from the state, but on the other hand, it will inevitably bring the result that the trade union is under the state’s control if there is no free association in the society. As we can see that the emergence of strikes in the foreign companies were led by VGCL with the state’s consent. In 1990, the Confederation of Vietnamese workers drafted a law which does not allow any independent unions to emerge, and enabled VGCL to monopolize its sole representation (Jeong, 1995: 161).

 

The framework of national Vietnam trade unions tells its role in the whole political structure. Its basic unit of trade union is workplace trade union. In addition to this kind of industrial trade union, workers and professionals can organize occupational trade union. In one area, there is only one union governing lower hierarchical trade unions, eg., there is only one provincial trade union to represent the interests of all workplace unions. Above the provincial union, VGCL represents all provincial unions’ interests in Vietnam. This kind of hierarchical organizational structure aims to control all trade unions, which is a type of state corporatism by some scholars (Jeong, 1997: 227-228). To effectively monitor this union system, the Party normally attends to assign some members to actively participate the trade union. One interviewee has noticed this kind of political control, and said:

 

 

Normally we don’t hire workers recommended by the EPZ Council because some ‘cells’ (spies, chi bo) are hidden in this group. These cells often encourage you to do something. In most occasions I know who are cells, and am able to pick them out.

 

Jeong finds that these cells play the function of connecting the grassroots members with the top leaders (1995: 152). Another informant in Hanoi area says frankly that there is party organization in his company, which functions as the transmission belt for government rules. Workers in his company have to attend meetings or to learn political lessons from time to time. When broke up with his Vietnam partner in a joint-venture company, the boss said that this partner angrily told him about his role in this joint-venture company: assigned by the Party to monitor all the activities in this company.

 

Under this political milieu it would be very hard to emerge any independent trade union and free associations. The so-called widespread strikes in 1997 sounds like a drama directed by the government. How could the workers protest so strongly and openly when they were not allowed to express their opinions freely? The only reason to explain the emergence of the strikes in the period is that the government wanted to utilize these events to show its politically correct ideology: they are with the workers. However, it still cannot hide the fact that the trade unions are still under the Party’s strict control.

 

The power of trade union is further weakened if the capitalist site intentionally manipulates its members and activities. As Chan and Norlund have already found that the workplace unions are probably dominated by the management.

 

In Taiwan, the attitudes of boss are generally hostile to trade union. In her research of Malaysian Taiwanese-invested factories, Kung also finds that “no one company has trade union in the workplace” because “they (Taishang) don’t allow” (2000:18). We can imagine this, because most Taishang companies had no previous experience dealing with trade union when they were in Taiwan. Most new trade unions in Taiwan were established after the lift of martial law in 1987 and subsequent political liberalization period. The investment in Vietnam mostly started from this period, and the businesspeople even had no time to know more about the trade union before their overseas investment.

 

Since they did not have experience in dealing with trade unions in Taiwan, would these Taishang complain about the trade union law? No. No one has complained it to me. Why? Because the workplace trade union is like that one in Taiwan during the martial law period, ie., all trade unions are phoney unions, under the capitalist’s control.

 

The process of establishing a workplace union can be exemplified by one company: a provisional union was set up in 1998, and formalized in 1999. The workers elected some representatives, and then elected committee members and chairperson among the representatives. Up to the interview date, August 1999, only half of the workers joined union. The government was not satisfied with this figure, and asked the company to encourage more workers to join, at least 80%. The company’s policy is: not encourage, not prohibit and not oppose to join trade union.

 

Because it is not compulsory to join the union, not every one wants to be a union member. In addition, the membership fee, which is set at 2% of worker’s monthly wage, also reduces the willingness to join the union. Without company’s strong support, we doubt that there would be many union members. As we mentioned above that in such a society without the tradition of free associations, to ask workers to freely sign in a union would be hard. Many workers join the union are just because ‘the government rules to join’. A Taiwan manager’s interview shows the lack of free association in such a society:

 

Our company wanted to set up a trade union two years ago, but workers did not want to join, because it would charge them membership fee every month. The fee is very low, and we can manage the fund quite well. But they still did not want to join. This year (1999) I tried to persuade them to join, and the government’s rules were showed to them to ‘enforce’ them to join.

 

As we can see that the union member is not compulsory to join, and many workers do not want to pay the membership fee, it turns out that the bosses can easily arrange ‘their people’ join union, pursue the seats of committee, and become the chair to control the unions. An informant, who had worked in China, told me that his experience to control trade union can be parallel transplanted in Vietnam. Before the setup of the trade union, he ‘raised’ a batch of loyal workers, gave them lots of benefits. When these workers were well organized and identified company’s management policies, it was the time to call for a new trade union.

 

Besides, Vietnamese workers are not familiar with trade union law, either. It is the company management side to arrange lessons for workers, eg., staffs in office-site, and foremen in production-site) to learn how to set up a trade union. When they know about the organizing process, these trainees will elect union cadres and leaders among themselves.

 

The list of trade union cadres for campaign is normally proposed by the management, and workers can only choose their ideal candidates from this list. As we have explained that the Vietnamese workers have no experience of free association or freedom of speech, they are not able to change this hand-over list. So the elected union leaders are mostly the cadres of management, not the representatives of workers. Trade union becomes a transmission belt of the company.

 

From these case studies, we should not only blame the capitalist control of trade unions. The reason why the state cannot exert its strong influence on the trade union function in a foreign-invested company lies in the problem of the lack of free association in Vietnam, and therefore the capital can easily exclude the state’s power from the labour-capital relationship.

 

Function of Workplace Union

 

Trade union in the Vietnamese socio-political context becomes an arm of management for company. At best they help the company to manage human resources efficiently, and in the worst, it collaborates with the company to repress workers.

 

In one of our visited companies, the trade union locates on the same floor of human resources management department. The chairperson was an ethnic Chinese, who showed deference attitudes to the personnel manager when he accompanied us to walk in the union. The photos showed on the wall were those activities held in last year (1998), and all of the activities were domestic tours organized by the union, and the official visits to the union.

 

According to our interview data, we find that the main works by the unions include the transmission of government rules, emergency help, collect money for charity, a better meal for festivals, visit ill workers and organization of tours. These activities are worker’s welfare-related, but never touch the power relations between workers and the management. Though the institutional design empowers trade union to protect worker’s rights, it is hardly used as it aims. For example, workers can write to government or trade union to complain anything. If there is any dispute between management and worker, trade union will act as a mediator. Between trade union and the management, there is a ‘mediation committee’ to arbitrate the disputes between trade union and workers. If this committee cannot resolve the disputes, both sides go to the court to ask for judgment.

 

However, the real power of the trade union to protect worker’s rights is strongly doubted. The management always has the intention to control the union to exclude those potential threatening forces. One interviewee clearly said:

 

Basically the trade union will not be out of your control. You can breed your own cells to monitor the deviant behaviours. If you find someone who likes to criticize the company, well, we have a “graveyard” in the company, and s/he will be sent and buried there.

 

This kind of labour control was often found in Taiwan in the 1980s. For example, Taiwan Plastic company often assigned active Taipei site union leaders to work in Kaohsiung, a city 400 km away from Taipei. They even promoted the union leader to prevent any criticism. The case of Chentex Textile Company in Nicaragua is another showcase of Taiwanese administration of trade union. It fired the workers who joined the union supported by Sandinista Workers Confederation. Workers are assigned to join the pro-company trade union, which is supported by Confederation of Nicaraguan Workers (New York Times, 2000/9/16).

 

Containing the contagious strike is also important. Workers in an interviewed company had demanded higher wage, more subsidies to pollution compensation and more flexible working hours, which were refused by the boss. Some workers blocked the entrance door and did not allow workers to enter the factory. To prevent long-term blockade, the boss and other managers went to the front door of the factory in the very early morning next day to expel those strikers’ harassment to other workers. These strikers could do nothing at the time, and left the company as soon as they found out no hope of changing the labour conditions.

 

Another case is the demand for one additional memorial day overtime pay. The company does not agree to pay overtime work for this, for it is not a national holiday. The result was the collective slowdown of work pace, and some workers did not come to work for a few days. The company threatened those workers not to renew the contract if they continued their strikes after the contract expired. The dispute disappeared silently in the end.

 

Because the workplace union is controlled by the management, what union can do is working closely with the company. It can help the management more efficient through different ways:

 

1.        Trade union can work as a rubber stamp to fire inefficient workers. One interviewed company pays piece wage. Normally a worker has to be very ‘efficient’ to meet the requirement for the minimum wage set by the government. Not everyone can achieve this set quota target, but the company cannot fire these workers due to the protective labour law. The only way is to ask the trade union to fire the inefficient workers in the name of ‘spoiling the reputation of workers’.

2.        An often-mentioned situation is ‘lazy’ workers recommended by powerful Vietnamese bureaucrats. The boss does not want to offend these bureaucrats, and cannot reject the hire of these workers. But the cost consideration makes him difficult to use these workers. The only way to get rid of these undesired workers is to ask union to layoff these workers.

3.        If there is conflict between worker and on-site cadre, the dispute can be proposed to the union to arbitrate. When there is any theft, the charged worker will be fired at once by the union.

 

These cases studies all show the role of workplace union is basically an arm of the management. It is not independent of the management and company. However, does the government not know about this kind of company-controlled union? We believe that the government knows quite well. Officials from Labour Department come to have labour inspections periodically. These officials must know about the power relations between trade union and the company. If the company can bribe these officials, it will be more difficult to have an independent trade union in a company, because the union will get no support from the state. Some informants said that they paid them to come, in the name of ‘transportation fee’ to prevent frequent bureaucratic harassment. About the difficulty of investment environment in Vietnam, Hill found that bureaucratic harassment is widespread (2000: 293). In a survey in 1999 by International Center for Corruption Research, Vietnam is ranked as the 76th among the 90 countries, while Taiwan is ranked as 28th (ICCR, 2000). Our fieldwork data shows clearly that every one had the problems of bureaucratic harassments. How can we expect the substantial help from the government to support an independent trade union in these micro-power relationships?

 

 

The Third Way？

 

In Chan and Norlund’s research, they think that with time the enterprise-based union, fragmented and absorbed by the management, the Party and government, might be replaced by grassroots occupation-based union (Chan and Norlund, 1999: 218, 225). However, we doubt this possibility according to Taiwan’s experience. Up to now, we would rather think that the pressures from Western buyers to ask subcontracting factories to follow codes of conduct could be the alternative path to protect worker’s rights.

 

The trend to enforce the codes of conduct comes from the ‘anti-sweatshop’ movement in Western countries. One famous example is the boycott of Nike shoes in 1996 by customers and unions to blame its labour practices in Vietnam and Indonesian subcontracting factories. The Vietnam factory, operated by a Taiwan company, was found to use physical punishment for improper conducts. This kind of physical punishment is totally not acceptable in the human rights standard.

 

To respond the overwhelming protest from customers and labour groups, these Western buyers started to demand their subcontractors to follow the codes of conduct strictly. To ensure the implementation of these codes, many big buyers hire an independent third party to monitor the labour practices in these subcontracting factories, eg., Nike authorizes PricewaterhouseCoopers to audit the practices. Avon demands its suppliers to follow SA8000 social clauses.

 

Will this kind of new monitoring system improve the conditions of labour practices? According to O’Rourke and Brown’s research in 1998 on a supplier of Nike shoes, this Korean-owned factory improved its production physical environment significantly after the codes of conduct were imposed on, mainly the reduction of worker exposures to toxic solvents, adhesives and other chemicals (1999).

 

Basically our finding is consistent with O’Rourke and Brown’s. Three companies were required by their buyers to obey the codes of conduct. On their factory wall, there is a painted sign to show the codes of conduct. One of the three companies list three languages posts, English, Chinese and Vietnamese. Another one started to set up their workplace trade union two years ago. They have emergency exit practices with local fire brigade every half-year. One boss told me that he did not worry about labour inspection from the government, but had to be very careful about the inspection from the auditing company. If they were found mistakes, the order would be cancelled.

Compared to those Taiwan companies aiming at domestic market, the working environment in these three companies is much better, in terms of light, air and the flow of production line. Signs of these three companies are very clear to tell you which areas are not allowed to walk in, and which areas are designed for stock-piling. In one Taiwan company in Hanoi, it rented an inventory house from a SOE to be his factory. When I walked in, I could not hear what the boss said to me even we were face to face. The toxic dissolves was put in a pool, and the product was manually put in to make zinc-coated. The boss told me his future plan: to put out parts of the production procedures to save cost. He had negotiated with a Vietnamese private enterprise to assemble some parts, which might save him 10% of labour cost. Physical environments of the companies with codes of conduct seem better than those without pressures from Western buyers.

 

However, the trade unions in these three companies are also under the management’s strict control. According to the rules of SA8000, the company shall respect the right of all personnel to form and join trade unions of their choice and to bargain collectively, and in those situations in which the right to freedom of association and collective bargaining are restricted under law, facilitate parallel means of independent and free association and bargaining for all such personnel. As the cases of the three companies show, though workers are entitled to organize unions, this situation is ‘directed’ by the government, and not the result of free association by the workers. When the auditors walk in the factory and interview the trade union leaders, can they find out the structural problems of trade union, which is not a real free association as we see in Western countries? A report by China Labour Watch also points out that this monitoring method is individualistic, and will unitise workers and fragment the potential collective power of workers (LARIC, 1999:12). In other words, the new method to protect workers’ rights is yet to reach its power in the confliction arena: the trade union, which is designed to balance the power of capital.

 

If so, the power of the labour-rights supporting groups in the first world still cannot help the formation of independent trade union in the country without freedom of association. This dilemma originates in the local political structures. If there is independent social forces in the civil society, it would be easier to organize and support the independent trade union. For example, the emergence of the independent trade union in Chentex, a Taiwan-invested company in Nicaragua, is strongly supported by the social and political forces, Sandinist party. Under the strong support of Sandinist group, the company still openly represses trade union, it would not be surprised to see the iron-fisted discipline toward trade union in a society without freedom of association.

 

Conclusion

 

This paper starts from the research by Chan and Norlund’s finding that Vietnam government is quite supportive of the development of trade unions. They also found that the newly-established workplace unions are dominated by the management. Why can these foreign companies control workplace unions in a trade-union-supportive regime? Why does the government only play a role in the beginning stage of union establishment, and then does not concern trade union anymore?

 

Our data basically supports Chan and Norlund’s argument that the socialist government still holds the ideology to protect workers rights, but the action by the government to publicly denounce foreign capital and support strikes is suspicious. The research on Vietnam public media has shown that the mass communication system is more a motivation-oriented than information-oriented (Heng, 1999). If so, the widely reports on strikes and VGCL actions in 1997 could be a showcase for the government’s socialist ideology. Strikes in foreigner-invested companies were not the outcome of bad labour conditions, but that of government’s manipulations. Therefore, we would expect that, unless with government’s content, there would be very few autonomous strikes initiated by the workplace trade unions.

 

Here we are able to see the most important structural constraint on trade union’s action. When the government has other considerations, eg., to reduce labour cost to compete for foreign capital, its public support of trade union would cease into silence. As we have seen, Vietnam government does not want to push labour movement too far, for if the power of trade union is too strong, it will scarce away foreign capital, and this is not the ending that Vietnam government would like to see.

 

This constraint gives the room for capital to maneuver the workplace union. If the government wants to keep the capital in Vietnam, it has to concede to capital’s demand for stable and cheap labour source. A long-term strike-stricken country would not be a good destination for capital, especially for those capitals seeking cheap labour. We have explored the ways to control trade unions in these Taiwanese-invested companies. The constrained political right by the government, plus the individualized workplace union, the function of trade union in Vietnam is destined to be limp. Trade union turns to be an arm of the management, and not the representation of worker’s interests in these companies.

 

We also explore the influence of the newly development of ‘codes of conducts’ from Western buyers, which emphasizes the rights to freedom of association and collective bargaining. In the survey of three companies, which are required to follow the codes of conduct by buyers, they did not grant more freedom to trade union than those companies without codes of conduct. The problem may lie in the problem of auditors who are not able to realize the real power relations in the companies. It shows that the codes of conduct and auditing process has a blind point here: how to measure the freedom of a trade union, and its degree of representation for workers.

 

In summary, the present situation of Vietnam trade union results from the corporatist party-state. When there is no free and independent civil society, any support from the state is only a farce: to show the greatness of the state. It still takes a long way to have an independent trade union to defend for workers rights in Vietnam.

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[1] The fieldwork was conducted when I held a post-doctoral research fellow position at Program for Southeast Asia Studies (PROSEA), Academia Sinica. I am due to Professor Michael H. H. Hsiao (director of PROSEA), Zhou Yan (director of TECO, Ho chi minh), Wang Ping (director of economic division, TECO, HCM), Xie Mutang (director of economic division, TECO, Hanoi), Ding Wei (secretary, TECO, HCM), Zeng Xianzhao (secretary, TECO, Hanoi), Lin Lianshan (representative, Pan-Asia Bank), Cai Jiahuang (president, Hung-yi travel agency) and Wang Suyue (manager, Hung-yi, HCM) for their kind help during my fieldwork trips.

[2] Vietnamese government allows three kinds of joint venture: a contractual business cooperative, a wholly foreign-owned business, and a joint venture with a local partner. The case here is a contractual business cooperative to subcontract its production to a state-owned enterprise.