Thousands on strike in Vietnam over insurance law

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Workers of Pou Yuen Vietnam gather at their factory on the fifth day of a strike in Vietnam"s southern Ho Chi Minh City 31 March 2015Image source, Reuters
Image caption,
The workers have occupied the factory compound and surrounding streets

Thousands of workers at a shoe factory in Vietnam's largest city, Ho Chi Minh City, are on strike for the sixth day, in a rare anti-government protest.

The workers are protesting at a social insurance law that kicks in next year.

They have occupied the factory compound of Taiwanese-owned Pou Yuen, which makes footwear for major brands such as Nike and Adidas.

Vietnam sometimes sees worker disputes but large-scale protests against the government are rare.

City and government officials have been trying to negotiate, as streets surrounding the factory remain blocked by protesters, who have been conducting peaceful sit-ins.

"The company has given them a day off today and we are holding dialogue with workers," Nguyen Tran Phuong Tran, deputy chairwoman of the city's labour union, told Reuters.

Analysis: Nga Pham, BBC Vietnamese

The ongoing strike in Ho Chi Minh City is one of the largest and longest that has ever happened in Vietnam. It is also unusual as the protesters are rallying against the government's labour policies rather than working conditions or pay.

The Vietnamese government does not tolerate dissent and considers mass protests a challenge to national security. Until now, the strike has been peaceful but there are fears that it may expand and get out of control.

It is likely that the Labour Ministry will reconsider their insurance policies to address the workers' concerns in order to avoid social unrest before the all-important Communist Party Congress that is planned to take place early next year.

Image source, Reuters
Image caption,
The majority of Vietnam's population of 90 million are aged below 40 years old

Social insurance law

The dispute is over the government's move to effectively convert an unemployment welfare scheme into a retirement savings scheme.

Currently, workers pay a monthly premium into a central fund, and when they become unemployed they receive a lump sum payout equivalent to premiums paid.

Under the new law, workers will only receive payouts when they retire, and the amount will be given on a monthly basis rather than as a lump sum. Only a small minority will be eligible for unemployment payouts.

The retirement age in Vietnam is 60 for men and 55 for women.

The government has argued that the rule is aimed at meeting "long-run social security objectives for the sake of labourers", said news portal Tuoi Tre.

But the workers on strike say that they prefer getting payouts when they are unemployed, to cover daily needs while seeking new jobs.

With its low wages and young workforce, Vietnam has become a manufacturing hub in the region, producing consumer goods and electronics for multinationals.

The majority of Vietnam's population of 90 million are aged below 40 years old, according to the CIA Factbook.