Vietnam:
Protest in the Zones:
Workers in Vietnam's Export Processing Zones

by Gerard Greenfield

Date: Fri, 12 Dec 1997 04:33:31 -0500
From: International Viewpoint
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It is an irony of history that Vietnam's first Export Processing Zone (EPZ), created to integrate Vietnam into the global capitalist economy, arose from a partnership between the Vietnamese Communist Party and Taiwan's ruling Kuomintang Party (KMT) - the Party of Chiang Kai Shek.
No doubt their common Stalinist heritage enabled them to negotiate this partnership with ease, consolidating the privilege and power of the ruling bureaucratic elite through new Zones of global capitalist accumulation and the unrestrained exploitation of 'cheap' labour.

Despite the Party-state's strategy of enforcing militarised discipline among workers and maintaining industrial peace in the Zones, over 2,000 EPZ workers were involved in strikes in 1997.

Gerard Greenfield

The Tan Thuan EPZ was established in Ho Chi Minh City in 1991 through a joint venture between the Vietnamese government and the Central Trading and Development Corporation (CT&D), owned by the KMT. In 1966, CT&D built the Kaoshung EPZ in Taiwan - Asia's first EPZ.

Three decades later the severe exploitation of workers in the Tan Thuan EPZ was foreshadowed in its construction, when over 300 migrant workers were illegally brought into Vietnam from mainland China to build the electric power station in the Zone. It was also clear that real power lay with the CT&D. The Vietnamese Deputy Director of the Tan Thuan EPZ (representing the Vietnamese government) asserting that "all operations here are directed by the general director in Taiwan".

For Taiwan's capitalists and the ruling elite the creation of the Tan Thuan EPZ in Vietnam was part of a strategy of offshore relocation and hollowing-out which undercut the independent labour movement and crushed the militant workers' struggles in the Kaoshung EPZ. Nearly 30,000 workers were laid off in the Kaoshung EPZ from 1987 to 1992, at the same time that Taiwanese capital was moving into Vietnam.

Since its creation the Vietnamese government has presented the Tan Thuan EPZ as a successful model for attracting foreign capital - a model which underpins the rapid increase in EPZs and Industrial Zones (IZs) throughout the country, with 350,000 workers now employed in 41 Zones. In the beginning of 1997, the Party-state intensified its drive to create even better conditions for foreign capital by allowing 100% foreign-owned EPZs, such as the Dai Tu EPZ, which is 100% Taiwanese-owned. In a further shift away from state regulation of foreign capital, a number of projects licensed as EPZs were permitted to re-register as IZs. Some EPZs, like the Danang EPZ established by Malaysian capital, are referred to as both an EPZ and an IZ, which enables them to evade existing regulations on EPZs.

IZs provide many of the incentives of EPZs, with even less governmental regulation. That can mean 45-year leases, tax holidays of two to four years, reduced tax rates and fees, and reduced taxes for companies exporting at least 80% of production. Combined with the freedom to sell products (including scrap and waste) on the domestic market.

Most important of all, companies in IZs operate under a quasi-private Zone Authority, dominated by private foreign interests. In fact an increasing number of IZs are privately owned, like the O Cach Industrial Zone which is wholly owned by South Korean capital. This gives transnational capital unprecedented freedom from state regulation.

Even if an IZ is a joint venture with the local government, such as the Nomura-Haiphong Industrial Zone, real power lies with the foreign joint venture partner. Ultimately the Japanese financial conglomerate, Nomura, will "regulate" capital in the Zone and exercise control over its 30,000 workers.

The 1995 Labour Code is supposed to apply to all workplaces throughout the country, regardless of whether or not they are located in EPZs or IZs. In practice, only the disciplinary and repressive elements of the labour laws and regulations are used in the Zones. Meanwhile, local labour departments and trade union federations have come to play a central role in maintaining industrial peace by condemning 'wild-cat' strikes by workers and intervening to resolve disputes through closed-door negotiations with management. These negotiations exclude the workers themselves, and the 'solutions' arrived at inevitably fail to meet their strike demands.

Of course, the enforcement of industrial peace at the cost of workers' rights and interests reflects the underlying logic of the Zones: to attract foreign capital using a 'cheap', compliant labour force. This occurs within the context of a partnership of interests between foreign capital and the Party-state (and the trade unions under the Party-state); a partnership institutionalised in the Tan Thuan EPZ, where the President of the Zone is also an executive committee member of the Ho Chi Minh City Federation of Labour.

As the authoritarian Communist Party regime oversees the transition to capitalism in Vietnam, an important continuity remains. The emphasis on industrial discipline - the imposition of time-work discipline and control from above - which underpinned the Party-state's Stalinist industrialisation strategy in the past is now consolidated under its programme of capitalist industrialisation. This is manifested in the EPZs and IZs where a militarised regime of production within the Zones reinforces the 'whip of capitalism' outside the Zones, the whip of mass unemployment.

The official discourse on industrial discipline is reflected in a report by an economist from the National Centre for Social Sciences, Thanh Luu, on a visit to the Tan Dinh An Industrial Zone:

"From afar, we saw a big group of women workers, in blue and yellow uniforms, marching in steady steps under the command of "one, two" of a military commander. The driver explained to us: "A militia group of women workers are undergoing military training." He added: "Life here is quite merry now!" Yes, that is true.... At present, it is quite lively, with a thick car traffic, a profusion of electric light, and some 2 000 workers working in Nam Cuong footwear enterprise, a cashew-nut processing factory, and the Daewoo-Vietnam Electronics company. We put some questions to a number of women workers, who were quite young and looked quite skilled: - How long have you been here? - Since the opening of the factory. - Do you like your job? Are the wages good? - I was a peasant, and so I was a bit uneasy with the discipline in the factory. But I am quite used to it now " (Vietnam Economic Review, no.3/4, 1997, p.43)

Thanh Luu then adds, "We met a big number of peasant girls in Song Be. They are now factory workers, used to industrial discipline and collective life, always willing to help one another in case of illness or other misfortunes." (Vietnam Economic Review, no.3/4, 1997, p.43)

Two strikes involving over 400 workers in the Tan Thuan EPZ on June 24, 1997, marked the first collective protests against exploitation and labour rights violations in the Export Processing Zones. Both strikes took place at 100 per cent Taiwanese-owned factories: a shoe factory, Delphi Co., and the Toan My Co. glove factory. On the morning of June 24, over 200 workers in the tanning workshop at Delphi Co. were involved in a mass walk-out after the second shift. The workers were protesting against the humiliating punishments inflicted by the Taiwanese supervisors, which include verbal and physical abuse, and being forced to line up and wait in the rain for long periods of time. The workers also demanded an end to forced overtime. In the preceding months the management forced the workers in the tanning workshop to work an extra four hours at the end of each shift, with no overtime pay. Anyone refusing to do overtime faces a penalty of 20 000 dong (US$1.80) per day, which is more than a day's wage. Workers caught going to the toilet or resting are fined 50,000 dong (US$4.50) each time, which can lead to deductions of up to half their wages at the end of the month.

The day before the strike at Toan My Co., the director, Duong Duc Hung, issued a communiqu‚ stating that the system of wage payment would be changed before the end of June and any outstanding wages would be left unpaid. More than 200 workers declared strike action to protest these changes, demanding the full payment of wages and collective negotiation of any changes to the wage system. In response to the strike the newly-created branch of the Ho Chi Minh City Labour Federation established to manage industrial relations in the Tan Thuan EPZ intervened to resolve the dispute. As a result the director agreed to paying the wages outstanding at the end of June in the following month, though a new wages system was introduced without any collective negotiation involving the workers themselves.

Less than a week later, on June 30, more than 600 workers went on strike at Giai Man Co., a Taiwanese-owned picture frame factory located in the Linh Trung EPZ, the second largest EPZ in Vietnam. The strike began at 5 o'clock in the morning, lasting eleven hours. The workers demanded shorter working hours, a decrease in shifts, specific policies to protect the rights and well-being of women workers, a system for the protection of workers' health and safety, and an end to the mistreatment of workers by managers and supervisors. Although the workers went back to work on the morning of July 1, these problems remained unresolved. Despite attempts to organise a union in April, the workers were still unable to form a union, even after the June 30 strike.

An even bigger protest took place in the same EPZ on October 16, when 930 workers at the Korean-owned shoe factory, Dae Yun Co., began a two-day strike. Workers protested against the refusal of the management to pay allowances for exceeding their quotas in September. The allowance - which increases the pace and intensity of work to meet monthly quotas - is a basic part of workers' monthly earnings and is stipulated in their contracts. Despite raising output in each shift for the whole of September, workers were paid less than half the allowance owed to them - losing up to 112 800 dong (US$10.25) each. After the issue was raised on October 14, officials from the Ho Chi Minh City trade union federation for EPZs and IZs intervened. The failure of the trade union officials to deal with the problem led workers to declare a wild-cat strike two days later. However, on October 17, the South Korean deputy director, Kwak Dae Hoon, threatened the workers with dismissal, forcing an end to the strike.

But just as the Dae Yun strike ended, more than 80 workers at Kasvina Co. Ltd., a Korean-owned factory in the Tan Thuan EPZ, began a two-day strike to protest against unpaid wages. The management claimed that they lacked the finances needed to pay workers, insisting that workers should get back to work and be paid later. Local authorities and trade union officials again intervened to end the strike, accusing the workers of failing to follow the regulations on strikes. Despite its small scale, local government and trade union officials were particularly sensitive to the Kasvina strike because the factory is located in the Tan Thuan EPZ, representing a revival of workers' protest in the heart of Vietnam's foremost Zone of capitalist industrialisation.

Sources: Saigon Times Weekly, July 20, 1996, p.25; Thoi Bao Kinh Te Sai Gon (Saigon Economic Times), February 20, 1997, pp.8-11; Lao Dong (Labour), June 26, 1997; Nguoi Lao Dong (The Worker), July 2, 1997; Lao Dong (Labour), August 3, 1997; Lao Dong (Labour), August 30, 1997; Lao Dong (Labour), September 6, 1997; Nguoi Lao Dong (The Worker), October 18, 1997; Lao Dong (Labour), October 21, 1997; Thanh Luu, "The bustling Binh Duong Industrial Zone", Vietnam Economic Review, no.3/4, 1997, p.43.

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