Laos Private Sector Assessment A Preliminary Scoping Study The primary objective of the study is to provide a broad-based overview of the private sector in Laos as a stakeholder in com- bating modern slavery in the country PB The Mekong Club Laos Private Sector Assessment The Mekong Club Laos Private Sector Assessment 1 The Mekong Club 1. Contents The Mekong Club is a catalyst 2. Objectives of the Study 4 for change – engaging, inspiring and supporting the private sector to eradicate slavery from 3. Definition of Terms 5 their business. Given that the majority of modern-day slavery 4. Demographic Overview & Key Social Trends 6 exists in the private sector, these companies are ideally placed to help turn the tide of this global 4.1 Summary 6 epidemic. 4.2. Population Distribution 6 The only organisation of its kind, 4.3. Social Indicators 8 The Mekong Club steers away from the approach taken by other 4.3.1. Human Development Index (HDI) 8 players in this space, which is to 4.3.2. GINI Coefficient 10 ‘name and shame’ companies – 4.3.3. Poverty Rate ousting bad behaviour or issues 10 related to this subject. Instead, we believe in starting and ending 5. The Labour force 11 with collaboration. 5.1. Employment and Income 11 In fact, The Mekong Club 5.1.1. Employment Distribution 11 originally formed as a direct 5.1.2. Income response to the growing 13 number of companies looking 5.2. Gender Gap 13 to develop strategies to address 5.3. Comparative Minimum Wage 14 forced labour risk through a professional forum. Divided into industry-specific working groups, 6. Political Risk Assessment 16 these networks meet regularly to learn, share best practices, and network with other like- 7. The Private Sector 17 minded professionals. Member 7.1. Overview 17 companies also work together to achieve an annual deliverable 7.2. Key Players in the Private Sector 18 which will work towards producing tangible results in the 7.3. Transparency 19 fight against forced labour. 2 The Mekong Club Laos Private Sector Assessment The Mekong Club Laos Private Sector Assessment 3 8. The Mekong Club Target Sectors 20 8.1. The Agriculture Sector 20 8.1.1. General 20 8.2. FMCG Retail 21 8.3. Manufacturing 21 8.3.1. Garment Industry 22 8.4. Banking Industry 23 8.5. Tourism, Food Service & Hospitality 26 8.5.1. Tourism 26 9. Modern Slavery in Vietnam 28 9.1. Background 28 9.2. USA Department of State “Trafficking in Persons” Report – June 2017 Update 29 2 The Mekong Club Laos Private Sector Assessment The Mekong Club Laos Private Sector Assessment 3 2. Objectives of the Study The primary objective of the study is to provide a broad- based overview of the private sector as a stakeholder in combating modern slavery in the country. More specifically the study aims to generate a knowledge base from which The Mekong Club can approach the private sector in order to create awareness and offer cooperative solutions for the eradication of modern slavery in corporate supply chains; the core focus of the Mekong Club’s mission. The following secondary objectives specify the details of the data that need to be gathered in order to fulfil the scope of the study: • Give an overview of the demographic landscape and economic conditions in Laos • Detail the characteristics of the labour force in Laos by looking at factors such as size, average income, distribution, key issues • Provide a detailed analysis of the private sector in terms of size of industries, number of workers and key players • Provide in-depth reports on the Banking/finance, Manufacturing, Construction, Agriculture and Retail and hospitality industries • Identify the current state of modern slavery in Laos 4 The Mekong Club Laos Private Sector Assessment The Mekong Club Laos Private Sector Assessment 5 3. Definition of Terms Throughout the report the following definitions will apply to the use of the terms human trafficking, forced labour, bonded labour and contract slavery, as specified by The Mekong Club. FORCED BONDED LABOUR HUMAN TRAFFICKING LABOUR AND CONTRACT SLAVERY An act (1) carried out by a All work or service which is Bonded labour begins when a third party, through different extracted from any person worker borrows money from means (2), for the purpose of underthe menace of any an employer and commits exploitation (3). penalty and for which the themselves to work person has not offered for the employer in return. For children under age 18 it is themselves voluntarily. sufficient to demonstrate Contract slavery involves the act of moving a child for deceiving or illegal contracts the purpose of exploitation. signed by victims who cannot understand them,and used to justify forced labour. 1. Act of: Threat of penalty Common features of Bonded • Recruitment • Physical and/or sexual Labour • Transportation violence. • Transfer • Imprisonment or physical • The employer manipulates • Harbouring confinement. interest rates or charges • Receipt • Withholding of wages, excessive rates. unreasonable fees or financial • The employer imposes 2. By means of: penalties. high charges for • Threat • Withholding of identity food, accommodation, • Force or coercion documents. transportation, or tools. • Abduction • Unfair dismissal or exclusion • The employer charges • Fraud from future employment. workers for shortfalls in • Deception • Deprivation of food or shelter. business output or days • Abuse of power • Exclusion from community, missed due to worker • Abuse of vulnerability social life or denunciation to sickness. community/family. 3. For the purpose of: • Intimidation and other threats. Common features of Contract • Exploitation Slavery • Slavery or similar practices Lack of Valid Consent • Contracts are in a language • Servitude • Worker deceived about the the victim does not • Prostitution wages they would receive. understand. • Removal of organs • Worker cannot leave • Contracts are presented to • Forced labour and service employment as they must victims who cannot read. remain for an undefined period • Victim is told fines and to repay debts to employer. penalties will follow if he • Worker made to work by breaks the contract. family. • Deception or fraud during recruitment stages. HUMAN TRAFFICKING FORCED LABOUR BONDED LABOUR emphasizes the movement of is often a consequence victims of human trafficking and CONTRACT SLAVERY emphasizes are two forms of forced labour the exploitative condition the victim suffers 4 The Mekong Club Laos Private Sector Assessment The Mekong Club Laos Private Sector Assessment 5 4. Demographic Overview & Key Social Trends 4.1. Summary Population 6.4 million Rural 67% HDI 0.740 Poverty Rate 7.2% GINI 39.4 4.2. Population Distribution The total population of Laos was estimated at 6,492,228 as of March 1,2015.1 According to the Population and Housing Census of 2015, about 67% of the total population resided in rural areas. The male-female ratio is almost equal. The reports states that “At its current population, the country remains one of the smallest in Southeast Asia - slightly bigger than Singapore, but less than half of neighbouring Cambodia.” Population Distribution by gender and Location in (2016) 2016 Total 6,492,228 Male 50.1% Female 49.9% Rural 67% Urban 33% The Lao population is distributed over 17 provinces and the capital Vientiane, which has a population of 820,940.2 1. http://www.lsb.gov.la/lsb/pdf/PHC-ENG-FNAL-WEB.pdf 2. http://www.lsb.gov.la/lsb/pdf/PHC-ENG-FNAL-WEB.pdf 6 The Mekong Club Laos Private Sector Assessment The Mekong Club Laos Private Sector Assessment 7 Number of Districts and Average Population of Districts by Province: 2015 Average Number of Total Province Population of Districts Population Districts Total 148 6,492,228 43,866 Vientiane Capital 9 820,940 91,216 Phongsaly 7 177,989 25,427 Luangnamtha 5 175,753 35,151 Oudomxay 7 307,622 43,946 Bokeo 5 179,243 35,849 Luangprabang 12 431,889 35,991 Huaphanh 10 289,393 28,939 Xayabury 11 381,376 34,671 Xienkhuang 7 244,684 34,955 Vientiane Province 11 419,090 38,099 Borikhamxay 7 273,691 39,099 Khammuane 10 392,052 39,205 Savannakhet 15 969,697 64,646 Saravane 8 396,942 49,618 Sekong 4 113,048 28,262 Champasack 10 694,023 69,402 Attapeu 5 139,628 27,926 Xaysomboun 5 85,168 17,034 Laos has a youthful population that will soon lead to the realisation of a “demographic dividend”, which “refers to the opportunity for accelerated economic growth resulting from declining fertility and mortality which, leads to a growing proportion of the working population accompanied by a reduction in population dependent on them.”3 The 2017 population pyramid clearly shows that about 60% of the population is under the age of 29.4 3. Ibid 4. https://www.populationpyramid.net/lao-peoples-democratic-republic/2017/ 6 The Mekong Club Laos Private Sector Assessment The Mekong Club Laos Private Sector Assessment 7 Population Pyramid 2017 Male Female 100+ 0.0% 0.0% 95-99 0.1% 0.0% 90-94 0.0% 0.0% 85-89 0.1% 0.1% 80-84 0.2% 0.2% 75-79 0.3% 0.4% 70-74 0.5% 0.6% 65-69 0.7% 0.9% 60-64 1.1% 1.2% 55-59 1.4% 1.5% 50-54 1.6% 1.8% 45-49 1.9% 2.2% 40-44 2.3% 2.5% 35-39 2.9% 3.0% 30-34 3.8% 3.8% 25-29 4.9% 4.8% 20-24 5.5% 5.3% 15-19 5.3% 5.1% 10-14 5.4% 5.2% 5-9 5.9% 5.7% 0-4 6.1% 5.8% 10% 8% 6% 4% 2% 0% 2% 4% 6% 8% 10% 4.3.