Shifty Move on Labor Rights in Vietnam
The Clinton administration showed a few days ago that it is faster and has shiftier moves than Michael Jordan.
Jordan, the world’s most famous basketball player, has said that he will travel to Asia this summer to see firsthand how workers are treated at Nike factories in Vietnam and other countries. He decided to make this trip after seeing a flurry of reports about substandard working conditions in these countries.
But last week, the U.S. government beat him to the punch. In a little-noticed action, a federal agency called the Overseas Private Investment Corporation formally determined that things are getting better and better for workers in Vietnam--thus opening the way for it to start helping businesses get established in that country.
OPIC gave Vietnam’s labor policies a clean bill of health--even though it acknowledged that that country’s trade unions are controlled by the Communist Party, that workers are not free to join unions of their choice, that wages range from $30 to $45 per month and that Vietnam does not spend money to enforce health and safety rules.
How could this happen? How could an agency of the federal government reach a conclusion that seems to defy reality and common sense? To understand that, one has to know about Washington and the forces that drive it.
OPIC’s job is to provide insurance against political risk for U.S. companies when they do business abroad. U.S. firms want OPIC insurance so they can launch projects overseas with the assurance that, if there is some upheaval, they will not lose all their money.
Not long ago, there was some talk about abolishing OPIC. It was “corporate welfare,” said conservative critics such as House Budget Committee Chairman John R. Kasich (R-Ohio). Such talk is not heard anymore, mostly because conservative Republicans, like liberal Democrats, have been overwhelmed by the political clout of the U.S. business community.
Over the last year, the Clinton administration has been eager to clear the way for OPIC to begin operating in Vietnam. U.S. Ambassador to Hanoi Pete Peterson, in particular, has argued that American companies will be more eager to do business in Vietnam if they can get insurance from OPIC and loans from the U.S. Export-Import Bank.
For their part, American firms have been waiting in line. According to Virginia Foote of the U.S.-Vietnam Trade Council, OPIC insurance could help clear the way for deals for steel processing, telecommunications, air-traffic control and power installations.
So two powerful interests, the diplomats and the American business community, both wanted OPIC to start up in Vietnam--which would have been fine, except for a slight legal impediment. It involved the question of labor.
Congress enacted a provision several years ago that prohibits OPIC from operating in any country not “taking steps to adopt and implement laws that extend internationally recognized worker rights.”
Given Vietnam’s labor record, you might think this requirement would be difficult to meet. Even Clinton administration officials seemed to think so.
Last December, when the administration decided to remove the main legal obstacle to new economic relations with Vietnam, Assistant Secretary of State Stanley Roth assured Congress that this action was only a “limited and modest step.” It did not amount to carte blanche for programs such as OPIC, Roth testified, because there were other factors, including “problems on labor rights.”
Congress was being misled. Clinton’s action had much broader implications. Within a day after it was made final on March 10, OPIC announced that it was ready to go in Vietnam.
To make the issue of labor rights disappear, OPIC turned to the third key ingredient for getting things done in Washington: lawyers. OPIC’s attorneys crafted a 14-page decision that interpreted the labor provision so narrowly that Simon Legree might have passed the test.
The only thing that counts is whether Vietnam has done anything at all regarding labor, the decision reasoned. And Vietnam does have a labor law, passed in 1994. OPIC admitted that, when it comes to workers’ rights to form their own unions, Vietnam’s labor law does not meet international standards. Nevertheless, OPIC’s lawyers decided that Vietnam is “taking steps.”
“The measure is not an absolute standard, but a comparison,” Charles Toy, OPIC’s vice president and general counsel, said in an interview. “They’re making progress.”
OPIC had dispatched a couple of delegations to Vietnam, in part to look at conditions there. But the agency’s final decision avoided saying anything about what, if anything, they saw. “Meetings and interviews were held” with management and workers, the report helpfully noted.
So, presto. Congress’ labor requirement has been satisfied and OPIC now gets to start up in Vietnam.
This is Washington at its hypocritical best. Why have a phony labor requirement, one that is going to be worded and interpreted so weakly that it is rendered meaningless? Why not just openly say that Congress is going to pay for OPIC programs, no matter how a country treats its workers?
In judging Vietnam’s labor performance, the United States government let speed and its desire to please American businesses win out over honesty. Maybe Michael Jordan can do better.
