ILO and UNDP Launch Digital Wage Initiative for Palm Growers in Ucayali to Boost Formal Employment and Financial Inclusion

 The Opinion Times Bureau

    New Delhi, August 5, 2025:  In a significant move to improve labor conditions and promote financial inclusion in the Peruvian Amazon, the International Labor Organization (ILO), in collaboration with the United Nations Development Program (UNDP) and the Ministry of the Environment, has launched a training program to promote digital wage payments among small-scale oil palm growers in the Ucayali region.

    The initiative, supported by the Global Environment Facility (GEF) through the Sustainable Productive Landscapes in the Peruvian Amazon project, seeks to address the high levels of informal employment in Ucayali. According to the 2024 Permanent National Employment Survey, nearly 80 percent of employment in the region remains informal. Even among the formal workforce, more than half are still paid in cash, based on official data from the Ministry of Labor and Employment Promotion’s electronic payroll system as of March 2025.

    The lack of access to formal financial services further compounds the issue, with only 39 percent of the population holding accounts with financial institutions, primarily in urban centers. These challenges underscore the urgency of promoting wage digitalization to improve business efficiency, support job formalization, and enhance access to financial services.

    As part of the response, the ILO’s Global Centre on Digital Wages for Decent Work has begun a series of targeted trainings in coordination with COCEPU (Central Committee of Palm Growers of Ucayali) and ASPASH (Association of Palm Growers of Shambillo). The first workshop, held on June 6–7 in the district of Neshuya, brought together more than 46 small palm-growing entrepreneurs.

    The sessions were led by consultants Hayme Lluch and Imelda Vargas, who introduced participants to the benefits and processes of digital wage payments. The training covered key elements such as setting up payroll systems, registering workers, issuing digital pay slips, and complying with labor regulations.

    Emphasizing a responsible transition, the initiative aligns with the ILO’s Decent Work agenda and encourages the use of digital wages as a tool for strengthening business management, transparency, and regulatory compliance. Participants expressed strong interest in formalizing labor relationships and improving administrative efficiency through digital solutions.

    “This is a crucial step toward transforming how wages are paid in the region,” said one of the participating palm growers. “Digital payments help us become more transparent and professional in our operations, and they open doors for our workers to access the financial system.”

    In response to the enthusiastic reception, the ILO and UNDP teams have initiated an action plan to provide continued support to businesses transitioning to digital wages. This includes coordinated efforts with the National Superintendency of Labor Inspection, the Ministry of Labor, and financial service providers to ensure a comprehensive and sustainable approach.

    The initiative aims not only to promote fair labor practices but also to support the long-term sustainable development of the Ucayali region. By fostering inclusive financial ecosystems and strengthening institutional collaboration, the program is setting a foundation for improved livelihoods and environmental responsibility in the Peruvian Amazon’s palm oil sector.