ABSTRACT
In 1986, the Vietnamese Communist government ended its approach of maintaining a closed and centrally planned economy and sought industrialization by allowing private ownership of economic enterprises, encouraging a greater role for market forces and embracing an ‘open-door policy’ towards foreign investment. Since passing the Law on Foreign Investment in December 1987, there has been a continuous flow of foreign direct investment (FDI) into the country, mostly through the establishment of manufacturing plants by MNCs (Le 1997; Tran 1997). In the space of three decades, foreign investment has become a major and growing factor in the country’s economy, particularly in the industrial component and in exports. By June 2011, Vietnam had received commitments of US$198,889,098,224 for 12,776 projects from 92 countries and territories (MPI 2012) and as of December 2004, foreign-invested firms had created 1,044,851 jobs (GSO 2005: 121). Indirectly FDI has also provided employment through subcontractors and suppliers. Despite its relatively short history of development, Vietnam has been quite successful in attracting FDI compared to its neighbour countries. It ranks third among the investment recipients in the Association of South East Asian Nations (ASEAN) (Mirza and Giroud 2004). As an integral part of the national economy, the foreign-invested sector has contributed to the development of Vietnam in many ways: attracting foreign capital, improving the balance of international payments, increasing export and access to international markets, accelerating the process of international integration, and deepening cultural exchange etc. Most importantly, foreign-invested firms are the main source of technology and management practices transfer to Vietnam. There is strong evidence that MNCs from developed countries operate more sophisticated human resource management (HRM) policies and practices, including performance-based pay schemes and better training, fair career promotion and skill development (see for example, Vo 2009). On the other hand, HRM and industrial relations (IR) in labour-intensive sectors and in MNCs originating in developing countries are a lot more complex. According to the Vietnamese General Confederation of Labour (VCGL), from early 1995 to mid-2002, there were 472 strikes, of which 262 incidents happened in foreign-invested companies, accounting for 55.5 per cent of strikes occurring in Vietnam. Labour strikes are highly concentrated in firms invested by Taiwan,
Korea and Hong Kong, which normally operate in labour-intensive industries – on top of the list are the clothing and footwear industries. Up to 2002, these countries were responsible for 71.43 per cent of strikes. The situation has not changed in recent years, as in 2007 an estimated 350,000 workers of foreigninvested factories were involved in at least 541 strikes across Vietnam (Le 2008). According to VCGL, 336 strikes occurred in Vietnam between January and April 2011, which was a decrease from 762 strikes in 2008 (Majendie et al. 2011). Most were in the industrialized provinces or cities such as Ho Chi Minh City, Dong Nai, Binh Duong, Ba Ria Vung Tau, Ha Noi and Hai Duong. Interestingly, all the strikes in the last decade were illegal because in most cases they were organized by the workers themselves, with the unions standing by, and regardless of the fact that they followed the right procedures and processes (Vo 2009). Many are of the opinion (see Vo 2009) that recent labour strikes have been organized by the workers, bypassing the trade unions, due to the general lack of understanding of the Labour Laws and thinking that going on strike is the quickest way to solve labour disputes. In fact, this is only one side of the story. The other reason is the workers’ lack of confidence in the official trade unions. This chapter examines the role of trade unions in the textile and garment industry in Vietnam, focusing on the subsidiaries of MNCs from Taiwan. According to the Vietnamese Ministry of Planning and Investment, in June 2011, Taiwan was the biggest investor in Vietnam with 2180 projects worth US$23,164,997,783 accounting for 11.65 per cent of the total registered capital inflows to the country (MPI 2012). The textile and garment industry was chosen to study because it has emerged as one of the most labour-intensive industries characterized by the highest occurrence of labour conflict (VCGL 2010), and also because it has an essential role in the modernization and industrialization process in Vietnam. In 2010, total export earnings derived from the textile and garment industry reached US$11.17 billion, making Vietnam the fifth largest garment and textile supplier in the world. The sector is also the largest formal employer in Vietnam, providing jobs for more than two million people (ILO and IFC 2011: 6). Furthermore, this sector reflects the fact that most of Taiwanese FDI in Vietnam focuses on light industries, which absorb about 70 per cent of the total accumulated investment capital (Tran 2011: 23). Going through some key trade unions’ organizational issues, especially the expected roles and responsibilities and the constraints they meet in realizing expectations, this chapter shows the transformation of Vietnamese trade unions, intended by the Labour Laws, recent Trade Union Laws and related regulations, has had very limited results. At the present time, trade unions’ structure and operations are full of unresolved difficulties. At the workplace level, their formal activities are limited to arranging holidays, organizing social activities with the company’s funds, and encouraging workers to fulfil production quotas. However, ‘the race to the bottom’ within the textile and garment industry has led to violations of labour rights, especially low salaries, benefits and bonuses, and long working hours. Recording a series of labour strikes, including ‘wildcat’ ones,
I show that workers are not afraid to take aggressive action to protect and improve their rights. I also look at the formation of unofficial labour movements led by unofficial worker representatives, who bypass trade union leaders and have gained significant power to gather thousands of workers in instantaneous strikes, marking a shift in Vietnam from rights-based to interest-based disputes. The chapter is structured as follows. First, in the literature review I discuss IR in the context of globalization and the nature of the Vietnamese IR system. I then look at the research methodology. The empirical study presented in this chapter discusses trade unions’ roles and activities and the elements that constrain or facilitate their mobility at the grass roots level. The chapter ends with discussions and conclusions.
