(Another) Paradise Lost - Strikes and riots in the Export Zones in Vietnam and Bangladesh, 2006

Submitted by Steven. on November 16, 2006

Information and analysis on the workers' movements and strike waves which have swept factories in Asia.

The garment and clothing industry is a mobile industry, it has almost completely moved from North-America and Europe to Asia, where about 80 to 90 per cent of the global production is situated. Within Asia, capital moves further on, in its constant look-out for lowest wages and stable conditions of exploitation. Upturns and slumps in the international market or changes in the trade policies have immediate effect on the workers, e.g. by short-term labour-shortages or sudden redundancies. The following two recent movements in Vietnam and Bangladesh express the reaction of the workers to these rapidly changing conditions: rapid workers' movements with a fair chance of international copy-cat effects.

In 2000 a fair share of the Indonesian export success consisted of 'used textile machinery'. After the collapse of the Soeharto-dictatorship, the Indonesian workers successfully used their new breathing space to ease the impact of the Asian crisis of 1998, and the clothing industry began searching for an escape. Even today they are still probably the most strike-happy workers in South-East Asia. Due to its very nature as an industries which is based on the exploitation of a large-scale work-force, relatively little capital and machinery is involved. A sewing machine or sometimes only a brush to apply glue to a sole of a shoe – and a work-place is created. This type of industry is mobile. During the last decade textile- and shoe industries were already shifting production to Vietnam, and even more so to China. On their look-out for the currently cheapest work-force the factories can nowadays only move from the coast regions, towards the inland. But recently it became clear: the Chinese migrant workers are not on the lowest rungs of the wage scale any more. Today Vietnam is a top destination, mainly because in the even cheaper regions (e.g. North Korea, Laos, parts of Africa) the infrastructure is insufficient, or the political situation unstable or the workers have already proved their ability to struggle, as for example in Cambodia. The boss of the European Chamber of Commerce in Vietnam claimed that one of Vietnam´s major advantages compared to Indonesia is "the fact that the workforce is not prone to industrial action".

It is difficult to compare wages. Partly because systematic researches are not available. Partly because the purchasing power would have to be compared. An alternative project, which tries to evaluate on a world-wide scale how many burgers a McDonald's worker is able to buy from her/his wage has not yet progressed very far. In Asia the wage differences between branches, regions or different groups of workers are much more extreme than they are in Europe. A fore(wo)man might earn five times as much as a normal worker. We estimate that a better paid industrial worker in China would be able to earn about 1000 Yuan (104 Euro), in Indonesia 1 Million Rupiah (91 Euro) and in Vietnam 1 Million Dong (53 Euro). These are monthly wages including over-time. This is not a comparison of living standard, but of costs which global capital would calculate with.

Nike, Adidas or H&M do not have their own factories, South Korean and Taiwanese capital organises the production on a global scale. Textile and shoe industries have been in Vietnam for some time now, mainly employing women who migrate from the northern to the southern regions. The migration and factory regime causes changes in the gender relations:

A lot of the women who take manufacturing jobs in the nation's industrial zones are single, and long hours of hard work give them limited opportunities to get married or start families. Thu Thuy, 31, a footwear industry worker in Ha Nam, said, "I work from early morning until midnight everyday so I don´t have time to have fun or look for a boyfriend." Duyen admits that she was born in a rural area and doesn't have much education, so factory work is the best job available to her. Working in the same factory as Duyen, Tran Thi Ha noted that people complain about more and more couples living together before marriage. "But for workers like me, it may be the only way not to be lonely forever," Ha said. Ha lives with a male factory worker who works similar hours to hers. "I'm getting older and I don't want to be lonely any more," she said. Bien Hoa and Binh Duong Industrial Zones employ about 650,000 workers, about 75 per cent of whom are young women aged 18-25.

Since last year the Japanese electronic industry have also been increasingly attracted to this region. The Japanese bosses were shocked by the anti-Japanese protests and by the frequent strikes in China. Their strategy seems to be to relocate parts of the production to Vietnam in order to be on the safe side in case of losses due to trouble. “The workers struggles erupted at a critical moment given that a lot of Japanese companies have just relocated their factories from China and other places to Vietnam”, wrote the Asahi Shimbun on the 3rd of February 2006. Since December 2005 factories in Vietnam which produce for the world market have been shaken by one strike after the other. The regions in the south are most effected, particularly Ho-Chi-Minh-Town and Bien Hoa. An alleged shortage of workers in the textile sector works to the advantage of the strikers. A survey by Vietnam's Central Institute for Economic Management (CIEM), finds labour turnover in foreign invested enterprises (FIEs) is relatively high at 43%. The highest ratio of worker turnover is seen in textile and garment, and footwear enterprises: with 32% of labourers shifting to other FIEs, 23% setting up private business, and 18% moving to Vietnamese owned enterprises. Only a few cases of dismissal were reported, with most workers changing their jobs spontaneously. According to initial statistics of HCM City, Binh Duong, and Dong Nai, the scarcity of workers has become alarming in some industrial zones, where only two-thirds of workers have returned to work after the Tet (New Year)-holiday.

We do not have much first-hand information about how the struggles are organised. It seems like the official state trade union is not involved in any way. Partly because it is not present in most of the companies with foreign capital involved. Partly because it was not seen as the representative body by the workers themselves. From purely a legal perspective all the strikes were illegal. According to the International Labor Organization, only 10 percent of workers in the export sector are represented by a trade union. A manager of a company for factory security guards said about the organising of the strike: ”There are people who sit and people who stand,” he says, ”And those who just mill around without any organisation. At other sites, people sit down in an organised fashion and they select a representative to speak with management. There are a number of protesters who are aggressive. They throw things and they kick and destroy property.”

The organisation and also the whole extent of the strike wave is unknown. There are hardly any independent sources. During the first strike wave, between the 28th of December and the 8th of January, about 50,000 workers from over 50 factories were involved. The first factories effected were the Taiwanese ones, due to the fact that wages there were the lowest and working conditions the worst. Here is one example:

More than 1,000 workers from Taiwanese shirt maker Beautech Vina, located in Binh Duong's Song Than Industrial Zone (IZ), went on strike in search of fairer wage policies. The strike began in the early days of January 2006. The workers want the basic minimum monthly wage of 620,000 VND ($38.75) to be increased, because it is not enough for them to support their families on. Following negotiations, Beautech Vina agreed to an increase of 50,000 VND per person per month so long as workers complete 1,200 products by 18:00 pm, every day. The previous deadline fell between 20:00 and 20:30. If the workers fail to meet the new deadline, they will not receive any additional salary. Beautech Vina's workers have complained that they are often forced to work until 22:00 to complete their orders, and those who are still not finished must stay on until midnight or later. Female workers have reported fainting during the long hours.

Soon the strikes began to spread to other plants of all kinds of sectors. About one million workers work in the foreign textile-, shoe- and electronic factories. The wages have not been increased for years. Although wages are higher in the foreign companies compared to the state-owned ones, the money often is too little to sustain a whole family. The conditions are catastrophic (workers are subject to health-damaging chemical, the sanitary facilities are insufficient) and the working times are long. Therefore the strikes are not (only) about wages, they are also always concerned with additional concrete demands. Here is an example:

Six months before the eruption of mass strikes in Ho Chi Minh City, 10,000 workers staged an illegal strike at Hong Kong-owned KeyHinge toys in the Central Vietnamese city, Danang. The workers, who manufactured plastic toys given away in McDonald's Happy Meals, told Lao Dong newspaper that unless they worked 12 hours a day without overtime they would be fired. The workers also complained they were only allowed two bathroom breaks a day and that the factory only had one cup for drinking water. They told Lao Dong they were treated like "animals," not allowed sick days, and fined for any mistakes.

The heavy impact of of the strikes forced the state to declare an increase of the minimum wage in FDI-factories (foreign direct investment) by 40 per cent for the first of February 2006. Monthly earnings are supposed to rise from less than $40 a month to a minimum of $55 in Vietnam's two biggest cities in Hanoi and Ho Chi Minh City, to $50 in mid-sized cities, and $45 dollars in the rest of the country.

The main reason behind this move might be the attempt to prevent the strikes from spreading to the joint-ventures and state-owned companies. Perhaps the government speculates that the increase of a part of the wage does not necessarily result in a drastic increase of the total wage. But it was exactly this question which triggered the second strike wave in February 2006. The companies only increased the basic wage according to the governments decree, but at the same time they cut the bonuses and supplements. This mainly pissed off the permanent workers given that one of the most important bonuses paid is for seniority. There are hardly any figures on the second wave, given that the state controlled media ceased to report them. Most of the info originates from the companies countries of origin, during the second wave mainly Japanese companies were effected, such as Mabuchi Motors and Fujitsu Computer. The Taiwanese, Japanese and also the European bosses associations demanded that the Vietnamese government act more firmly against the strikes. But so far the Vietnamese officials have kept a low profile on the matter. One minister said “The strikes occurred because the companies did not stick to the Vietnamese labour law”.

The strike wave was still continuing on the 15th of March when 8,000 workers of a Taiwanese owned shoe factory walked out. There has also been some initial news reports about workers of state owned companies talking direct action. They do not seem to accept that they are supposed to earn so much less. As far as we know the state administrations are still holding back and restrict themselves to mediating between the parties in conflict.

On 22nd of May 2006 about 100,000 workers from Dhaka Export Processing Zone and other surrounding industrial areas protested for higher wages, a mandatory day off on Fridays, regular payments and extra pay for overtime. In terms of wages the current payment for a finished sweater is about 11 cents, the workers demand at least 16 cents. According to the Brussels-based International Textile, Garment and Leather Workers' Federation in February 2005 a garment worker in Bangladesh received only 6 cents per hour, when the figure is 20 cents in India and 30 cents in China and 40 cents in Sri Lanka. During the protest the police shot one worker and injured several others. The same had happened the previous week during a protest in Sripur, 60km north of Dhaka, when the police killed one worker during a demonstration for higher wages. After the shooting in Dhaka riots started. The police reports that on the 22nd of May about 30 factories were ransacked and dozen vehicles were smashed. They also said that they had to rescue a factory owner from the mob. The riots continued for another four days. In total 14 factories are said to have been set on fire, thousands of finished clothing pieces were destroyed and 70 factories damaged. The production in several hundred factories in the area stopped. During the four days 3 workers were killed and 150 injured, the police shot live ammunition and stormed factories in order to prevent further damages. Other media sources mention that the protest of workers of the FS Sweater Factory of the SQ Group could have ignited the riots. On 16th of May the management closed the factory without settling the question of three months unpaid wages. The management promised to come up with a solution on the 20th of May, but on that day the workers had to face thugs hired by the company who assaulted some of the workers. The management did not answer the questions concerning outstanding wages and the future of the factory. The workers stated to protest in front of other factories and found support. During the growing protest the police shot a worker, which fuelled the anger.

After the riots the media put forward similar complains to the ones the media announced after the strike wave in Vietnam: the international buyers from USA and Europe are concerned and might disregard Bangladesh as a clothing manufacturer in the future. Bangladesh's foreign exchange earnings relies on the ready-made garments export, which makes up for 76 per cent. Bangladesh has more than 4.2 Million garment factories and employs more than 40 per cent of all industrial workers. About 2 Million workers, the majority of them women, work in the textile mills. In the last nine months of the fiscal year exports have risen by 20 per cent compared to the previous year.

In the aftermaths of the riots the government, the employers association and union representatives voiced their disapproval of the riots and agreed on forming a “minimum wage board” exclusively for the garment sector. Here lies another parallel to the reaction of the government after the strike wave in Vietnam, trying to curb future unrest by increasing the official minimum wage. Although state and capital accepted the link between riots and workers discontent by setting up this wage board, ministers and former union leaders started to spread conspiracy theories which blamed foreign instigators for the riots.

Asia Tribune, 26th of May 2006
The Nation, Thailand 23rd of May 2006

For more information see:

http://english.vietnamnet.vn/ or http://www.atimes.com/atimes/Southeast_Asia/

prol-position news #6 | 7/2006

This is an edited translation of an article published in the latest number of wildcat (www.wildcat-www.de), written by comrades who organise the Asia focused website “Welt in Umwaelzung” (www.umwaelzung.de). Taken from www.prol-position.net