Nestled beneath the green slopes of Burkhey village in Sampheling Gewog in southern Bhutan, a small stretch of forest is quietly demonstrating how communities, industries, and nature can work together for mutual survival.
The Burkhey Community Forest (CF), covering just 22.92 hectares, may appear modest in size. But it has become one of Bhutan’s most practical examples of how Payment for Ecosystem Services (PES) can transform conservation into a shared responsibility between those who protect natural resources and those who depend on them.
Today the forest stands lush and thriving. Springs flow steadily through its shaded undergrowth, feeding water systems that serve both nearby villages and the industrial town of Pasakha, the country’s largest manufacturing hub. But a decade ago, the story of Burkhey looked very different.
Before the PES initiative began, the forest around Burkhey had suffered years of pressure. Expansion of industries in Pasakha, combined with timber harvesting, grazing, and fuelwood collection, gradually degraded parts of the landscape. Water sources began showing signs of stress, raising concerns among both villagers and industrial users downstream.
At the centre of the issue were the springs at Devithan, located below Burkhey village. These springs are a crucial water source for surrounding communities and industries in Pasakha. As industrial growth accelerated and climate variability began affecting rainfall patterns, protecting these water sources became increasingly urgent.
Recognising the shared risk, local communities, industries, and supporting organisations came together in 2015 to launch the Burkhey Payment for Ecosystem Services scheme.
The idea behind PES is simple but powerful: those who benefit from ecosystem services—such as clean water—help finance the protection of the ecosystems that provide them.
In Burkhey’s case, downstream industries contribute financially to the community that manages and protects the forest above the water sources.
Six major industrial water users participate in the scheme: Tashi Beverages Limited, Bhutan Carbide and Chemicals Limited, Druk Cement, Bhutan Hume Pipe, Bhutan Soya Proteins, and Aha Oxy Gas Pvt Ltd.
These companies rely on the Burkhey water source for their operations. By contributing financially to forest protection, they are essentially investing in the sustainability of their own water supply.
An official from Tashi Beverages Ltd., the company responsible for bottling Coca-Cola products in Bhutan, said the partnership reflects the company’s environmental commitments.
“Our engagement with the Burkhey PES scheme reflects our responsibility toward environmental stewardship,” the official said. “We maintain a 50-metre buffer around the water sources, avoid harvesting trees in the catchment area, and prevent domestic animals from entering the springs. In return, we contribute Nu 25,000 annually to support conservation.”
Druk Cement, another key industrial partner, views the initiative as both an environmental and operational necessity.
“With increasing water scarcity, the Burkhey water source is extremely important for our drinking and industrial needs,” the plant manager said. “This initiative helps secure a reliable water supply while supporting the community that protects the forest.”
For smaller industries such as Aha Oxy Gas Pvt Ltd, the value of the water source is immediate.
“The water quality at Burkhey is excellent,” said CEO Tshering Lhuendup. “Without this source, we would have to transport water from Jumja, nearly eight kilometres away, which would significantly increase our costs.”
At the heart of the initiative is the Burkhey Community Forest Management Group (CFMG), which oversees conservation activities and manages the funds received from industries.
For the community, the scheme has brought both environmental and economic benefits.
“Our forest is a vital resource,” said Suk Bdhr. Tamang, chairperson of the Burkhey PES initiative. “It supplies clean water to industries and communities, supports local livelihoods, and helps us protect our environment.”
Each year, participating industries collectively contribute about Nu 150,000 to the community forest group. The funds are reinvested directly into conservation work and community welfare.
Over the past decade, villagers have protected around 2.5 acres of critical catchment area and established plantations across 14.5 acres of degraded land. Regular maintenance—such as bush clearing, fencing, and cleaning water tanks—helps keep the springs clean and protected.
These efforts reduce soil erosion, improve groundwater recharge, restore vegetation, and stabilise water flows throughout the year.
Despite challenges such as difficult terrain and limited financial resources, the community’s commitment has remained strong.
“Collective action has made a real difference,” Tamang said. “Protecting the forest means protecting our future.”
The PES scheme has also strengthened the community’s financial resilience. Part of the funds collected each year is used to support small loans for residents.
“We provide loans of up to Nu 40,000 depending on members’ needs,” Tamang explained. “So far, 17 households have benefited, helping families manage urgent expenses or invest in small livelihood activities.”
This revolving fund has become an important safety net for many households.
The community has also expanded its activities beyond conservation. In January 2025, villagers opened a small recreational park known locally as the “Picnic Spot” within the community forest.
The site has begun attracting visitors from nearby areas, creating opportunities for small-scale eco-tourism and local income. Revenue from the park contributes to community welfare programs and forest maintenance.
This story was produced as part
of the media reporting grant
funded through the Australian
Government’s Regional Media
Support Fund through JAB.
Sherab Dorji
From Thimphu
