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Industrial Relations in Vietnam – an introduction and some theoretical

references Prof. Dr. Ingrid Artus

presentation for the conference „Labour Market and Industrial Relations in Vietnam“, 9th october 2012, Nuremberg

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Some beginning remarks….

The following presentation is

■ based mainly on secondary literature and only a few ‚first-hand‘ empirical evidences

■ an essay to grasp the Vietnamese situation with Western concepts

■ guided also by own research on industrial relations in (Eastern) Germany and France

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Theoretical concepts

■ Modernization

■ Transformation

■ Institutionalist and cultural concepts

■ Globalization and international division of labour

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1. Modernization

Vietnam is

– a ‚late-comer‘

– in the transition stage from an agrarian to an industrial society

– on the way of rapid industrialization and urbanization

=> Resemblance of Vietnamese social conflicts to the European „first industrial revolution“

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1. Modernization ?

The processes of the first, second and third industrial revolutions are taking place in Vietnam simultanously, not consecutively (as in Europe)

=> Very heterogenous labour force situations

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2. Transformation

■ Vietnam’s economic system has undergone (and is still undergoing) a transformation from state-planned economy to market principles

■ Dual - or even triadic economic structure:

• state firms

• privatized Vietnamese companies

• foreign-owned “global-market factories” (FDI)

■ The institutional system, applying to both, state and private companies, in many regards is still oriented to the premises of a socialist planned economy.

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Transformation of Industrial relations(?): the VGCL

■ The VGCL is a „mass organization“ and part of the political system

■ Main Functions:

– Encourage the production drive and maintain labour discipline

– Provision of employee information and education

– Organizing social and cultural activities/welfare

– Some protective tasks for the employees

■ Overall: Harmonizing interests and mediation – not direct interest representation of its members

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Weak employee representation at the company-level

■ In many FDI-companies the legally binding establishment of a workplace union is avoided

■ But even if there is a workplace union:

– It often acts as „the long arm of the personal department“

– Workers see union representatives often as a part of management

Reasons (?!?!) – or typical arguments:

- No effective job guarantee for union activists

- The workplace union representatives are paid by the company

- Lack of training and qualification

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3. Institutionalist and cultural arguments

Three points of cultural and institutional characteristics of the Vietnamese system of industrial relations shall be sharply outlined:

■ The ideal of a harmonious society…

■ …and however a long history of union struggles

■ Formal rules versus informal “underground”

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4. Globalization and international division of labour

■ FDIs go mainly into lowtech „extended workbenches“

■ Vietnam provides in the global value-creation chain mainly ‚raw‘ labour power

■ Many Vietnamese companies are sub-sub-sub-contractors with very low profit margins and a marginal market position in the international value-chain

■ Tolerance towards strikes in FDI companies may be a rational ‚national corporatist strategy‘ to enlarge the share of profit kept within the country

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Globalization of Labour unrest

■ Silver (2003) argues from a ‚world historical perspective that product cycles and the extension of capitalist production is one of the most important reason for the strengthening of the working classes and increasing labour unrest

■ The reactions of capital to the emerging conflicts are permanent delocalizations and geographical shifts of production => f.e. to Vietnam

■ What we see in the Vietnamese factories is a ‚new round‘ in an old struggle – against the priority of individual profit in favor of a secure existence for all.

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Thank you for your attention!