Forced Labour & Vietnamese Debt Bondage

Forced labour is a form of modern slavery that affects millions of people worldwide, with debt bondage the most common form of forced labour, according to the International Labour Organization’s report on Modern Slavery estimates. With around 80,000 Vietnamese leaving the country for work overseas each year, and another 450,000 living abroad as temporary workers, the issue of debt bondage is especially significant among Vietnamese migrant workers.

Debt Bondage: Trafficking or Smuggling?

It is crucial to understand the legal differentiation between trafficking and smuggling. According to Open Democracy, trafficking refers to the deception, transportation, and exploitation of unsuspecting victims, including through debt bondage. Smuggling, on the other hand, involves payment for the illegal transportation of willing migrants. The issue of Vietnamese migrants and debt bondage is more complex. Many of them are not in debt to the smugglers that transported them and facilitated their foreign work, this is a service that requires at least some advance payment, with smugglers usually cutting ties with the migrant once they have arrived at their new place of work. Instead, many of these migrants are in debt to creditors back in Vietnam- relatives, friends, communities, moneylenders, and banks, who they borrowed from in order to afford smuggler fees. These are well thought out, intentional, irregular journeys, and as such, do not fall under the definition of trafficking. The result is that individuals are forced to work to pay off a debt, but the terms of repayment are often so harsh and exploitative that it becomes nearly impossible to do so. Debt bondage disproportionately affects migrant workers, particularly those from countries like Vietnam.

These workers are often lured with promises of high-paying jobs and a better life, recruited through labour brokers or employment agencies, which charge exorbitant fees for their services. Many workers take out loans to pay these fees, leaving them indebted before they even start working. In reality, these migrant workers are forced to work long hours for very little pay, living in substandard conditions, and unable to leave their jobs due to debt bondage. A recent investigation by The Diplomat found that Vietnamese migrants working in nail salons in the United Kingdom were being charged up to $27,000 USD in recruitment fees, and were working long hours, without breaks, and paid well below minimum wage. The workers were also forced to live in overcrowded and unsanitary conditions, with some sleeping on mattresses on the salon floor. More broadly, Vietnamese workers were paying the equivalent of three to four years wages at home in Vietnam to get access to jobs abroad at suppliers of major international brands.

Vietnamese migrant workers, particularly in Western countries, often face multiple forms of exploitation. Interest-based debt bondage occurs when workers take out loans to pay recruitment fees, but interest rates are so high that they can never repay the debt. The debt continues to grow over time, making it nearly impossible for workers to escape the cycle of exploitation. False debt bondage occurs when some employers create false debts, claiming that workers owe them money for various expenses like food or housing. These debts are often inflated, and the workers are not provided with any documentation to prove that the debt exists. The confiscation of identity and travel documents by employers may also leave them with no way to leave the country or seek help. This is illegal, but it is common in industries like domestic work and agriculture, sectors where STATT has seen online advertisements for Vietnamese workers sky-rocket in 2023.

Deadly Consequences

The consequences of debt bondage are severe and far-reaching. In 2021 500 Vietnamese construction workers were found working at Linglong car tyre factory in Serbia in conditions of forced labour, with their passports confiscated and living in cramped and degrading conditions. This is nothing new. Serbia and Romania are being increasingly used as gateways to Europe for smuggling gangs, using guest worker visa programs to transport large numbers of Vietnamese workers into Eastern Europe. The tragic result for some of these trips to find better lives and incomes is wrongful death. In 2019, the bodies of 39 Vietnamese migrants were found in the back of a refrigerated container lorry in Essex, United Kingdom. Each passenger had paid between £10,000 and £13,000 to be brought to the UK for work. The resulting trial found that people smugglers had been successfully bringing Vietnamese people into the UK illegally for years, with many charged exorbitant prices or subjected to various forms of debt bondage after arrival.

Moreover, the impact of debt bondage is not limited to the workers alone. Families back in Vietnam suffer as well, relying on the remittances sent by their loved ones working abroad. When trapped in debt bondage, workers struggle to have enough pay to send money home regularly, exacerbating the financial strain on their families, and hindering their ability to escape poverty.

At STATT Consulting, we recognise that growing issues such as debt bondage require cross-cultural collaboration and communication between sectors. Awareness regarding this issue is key, as is educating migrant workers about their rights and information regarding safe and legal migration channels. We continually strive to bring awareness to fair migration practices, identify cases of debt bondage and exploitation globally through grassroots research, and provide local insights into how this issue can be sensitively and constructively addressed.