The site

The Municipality of Bakun is situated at the northwestern tip of the Province of Benguet, Cordillera Administrative Region, Philippines. Bakun, which is about 31 000 ha of rugged mountains, was the first in the country to be awarded a Certificate of Ancestral Domain Title (CADT). Bakun has a population of 12 137 (2007) in 2346 households predominantly of the Kankanaey-Bago tribe. The tribe’s indigenous way of life governs how they relate with their natural ecosystems and among themselves. They have indigenous knowledge, systems and practices that govern the management and utilization of their ancestral domain.

The Bakun watershed has a total drainage area of 29 300 ha, consisting of four big rivers and several tributaries. The Bakun and Gambang rivers support the hydroelectric power operations of two mini-hydro companies, Hedcor Inc and the Luzon Hydropower Corporation, which provide benefits to the municipality and LGU.

The issues

Deforestation and water pollution were among the main problems of Bakun watershed identified during a hydrological assessment conducted in 2004. Deforestation was said to be caused by the occurrence of forest fires, the existence of logging and small-scale mining industries, and the expansion of commercial vegetable production that was driven by the increasing demand of a growing population. With the decrease of forest, siltation naturally occurred, which was further aggravated by road widening activities of the hydroelectric companies. The increase in silt load accumulation was estimated to cost the power plants about PHP 30–40 million (USD 729 000–971 000) worth of repairs and maintenance of turbines and other facilities annually. Water pollution, on the other hand, was caused by chemical waste from agricultural inputs and oil from vehicles. The existence of these problems could be seen in the decline of the quantity and quality of water.

The indigenous people living in the watershed were predominantly poor, with about 87% living below the poverty threshold. The municipality of Bakun had been receiving monetary remuneration from statutory, negotiated and voluntary benefits, paid in cash and kind by the power plants since their establishment. These benefits and financial assistance would have been ideal to alleviate the livelihood of the indigenous people. However, it was within the discretion of the LGUs to utilize the benefits according to their own municipal development priorities, with no or very little direct assistance given to those who were directly responsible for the stewardship of the watersheds. Based on the 2005 assessment of benefits provided by the two hydroelectric companies, most of the benefits went to infrastructure development. Very little had been aligned to livelihoods’ development and watershed conservation.

Environmental services and the people involved

Environmental services

Water for domestic, agricultural and industrial purposes

People who provide the services

The upland Kankanaey-Bago tribe

People who benefit from the services

Luzon Hydropower Corporation, Hedcor, lowland communities

People who act as intermediaries between the providers and the beneficiaries

Bakun Indigenous Tribes Organization, LGU

The Bakun watershed supplies water to the community for domestic, agricultural and industrial purposes. The community relies heavily on the watershed for sustained stream flow, good water quality, and a generally stable environment, particularly since the main source of livelihoods is farming and the hydropower companies rely on it to produce electricity.

Some of the essential environmental services’ scheme components were already in place prior to the choosing of Bakun as a RUPES site. For one, the possible sellers and buyers were easily identified. The upland Kankanaey-Bago tribe served as the provider and seller. The indigenous people had been maintaining the watershed for generations. However, it was not enough to just protect it, as economic necessities and population increase had overwhelmed the need for conservation. The hydropower companies operating in the area were identified as major environmental services’ beneficiaries of sustainable water supply. Traditionally, water had been used for domestic and agricultural purposes. But since the establishment of hydroelectric companies in 1991, water became essential for the production of electricity, paving the way for the electrification of some communities in the municipality as well as the construction of roads in the barangays (smallest government units) where the plants were located. 

Second, the optimal policy and legal frameworks were already in place through the Energy Act 1992 and the Electric Power Industry Reform Act 2001, which required hydroelectric companies to pay a specific amount that should benefit host communities. Aside from that, there was a memorandum of agreement between the power companies and the LGU, strengthening the relationship and increasing financial benefits received by the municipality of Bakun. It seemed that it was only a matter of seeing to it that the funds were directed to preserving the watershed and improving the livelihoods of the upland communities, which, before, were not primary concerns of the LGU nor the communities.

The Bakun Indigenous Tribal Organization (BITO), as the representative of the indigenous people, and the LGU of Bakun acted as the intermediary between the hydropower companies and the indigenous people, particularly in the upstream areas. RUPES, together with the Department of Agriculture Cordillera Highlands Agricultural Resource Management (DA-CHARM), provided assistance to the indigenous people by supporting capacity-building activities that were vital in enabling them and the intermediaries to negotiate with the hydropower companies and handle the rewards’ mechanism.

The rewards

The existing mechanisms of the hydropower companies were assessed for their efficacy regarding the twin objectives of poverty alleviation and resource sustainability. Since the hydropower companies were providing other benefits that could be given directly to the Bakun people, RUPES helped them to design proposals for watershed conservation programs that could reduce sedimentation.

RUPES in Bakun also increased the awareness of the community regarding the importance of environmental services and the need to conserve them for continuous benefits. Capacity-building interventions were conducted based on an assessment of the capacities of Bakun stakeholders to implement and sustain RUPES’ activities in Bakun.

A RUPES Technical Advisory Group composed of representatives from line agencies of government and non-governmental organizations in the region was formed. From that group, a technical working group was established to formulate the Bakun Integrated Watershed Development and Management Plan. In 2008, the plan was finalized with the intention of being jointly implemented by BITO and the Bakun LGU.

The plan’s activities would benefit the operations of the hydropower companies, thus, they needed to reward the indigenous people for their work. The rewards included incentives to villages for reducing the incidence of forest fires and rewards to upland farmers for protecting their private woodlots instead of converting them into vegetable gardens.

In order to prepare RUPES’ partners, particularly the LGU and the community, a proposal-writing workshop and a negotiation skills training course were conducted to enable them to negotiate properly with the two hydropower companies in Bakun to fund conservation and rehabilitation activities.


RUPES will follow up on the implementation of the plan, as well as the proposals made for the hydropower companies, and support further negotiations. RUPES will also continue to promote environmental services’ mechanisms in the development of watershed programs in Bakun.


  • Cordillera Highlands Agricultural Resource Management project

The Cordillera Highlands Agricultural Resource Management Project (CHARMP) is a long-term loan project under the Department of Agriculture funded by the International Fund for Agricultural Development, Asian Development Bank and OPEC Fund for International Development. The goal of the project is to reduce poverty and improve the quality of life of rural highland indigenous peoples in the Cordillera Administrative Region. The project is currently in its second phase.  

  • Bakun Indigenous Tribes Organization

The Bakun Indigenous Tribes Organization is a municipal-wide grassroots people’s organization established in 1998 with the main objective of promoting social and human development, economic growth, cultural development, a quality environmental and sustainable use of resources.

  • Bakun Local Government Unit

The municipality of Bakun has supported RUPES through its creation of the RUPES Bakun Technical Working Group, which consists of representatives from the different local government divisions and other stakeholders, such as CHARMP, the Bakun Indigenous Tribes Organization and RUPES. 

Contact for more information

Ms Ailene Florece (World Agroforestry Centre),