Students work with Bhutanese small business entrepreneurs to help them realize their dreams. Students can help clients with their organizational and transactional legal needs, but can also work with them to help refine and focus their business plans on what really matters to them as business entrepreneurs.
Students also work with policy makers on efforts to create a conducive environment for small business entrepreneurs, especially those that pursue a strong social and environmental mission.
Druk Metho Project
In 2017, JSW Law was approached by the entrepreneur Mr. Thinley Namgay. Thinley Namgay had been approached by a Swiss company that was interested to source organic edible flowers from Bhutan for use in high-value food products (for example, Risotto and Tea mixed with edible flowers). The Swiss company offered to not only provide market access, but also to support local processing with the goal to create high-value food products for the local and regional markets. Thinley decided to develop a new partnership with a group of young farming women in Drachukha, a small village near the Gasa-Punakha border.
The clients wondered whether a cooperative model or a regular corporate model would best suit this project, to which the Clinic’s answer was a resounding “neither.” The Clinic proposed a process designed to educate and empower the Drachukha farmers group to make such decisions on their own, with active facilitation by the Clinic. This process, which concluded in April of 2019, resulted in a groundbreaking profit-sharing model between two separate corporate entities, the first being the farmers cooperative (which grows the flowers) and the second Druk Metho, a for-profit company (which processes and markets the final product, both domestically as well as internationally). No similar corporate structure exists in Bhutan or elsewhere. This model harmonizes the incentives of Druk Metho and the Farmers Group, and profits generated by Druk Metho flow directly to the community, not as charity or as a form of “corporate social responsibility,” but rather as a joint payoff for joint efforts.
Druk Metho utilizes the potentials of high-value food production to drive changes in the agricultural systems towards more regenerative and resilient farming practices. While the export market is an important backbone of the project, Druk Metho is simultaneously developing the local market with healthy products that are relevant and affordable for Bhutanese customers. If you are interested to learn more about Druk Metho, you can find additional information in the recent Annual Report or watch a video about Druk Metho, produced by the Royal Monetary Authority.
The clinic’s partnership with Druk Metho consisted, inter alia, of the following deliverables:
• Various consultations with the key stakeholders of Druk Metho and the Drachukha Farmers’ Group regarding their business model, including a two-day workshop convened in Punakha to finalize the model;
• Legal support to Druk Metho to formally register as a Sole Proprietorship;
• Legal support to the Drachukha Farmers’ Group to incorporate;
• Drafting the overarching agreement between Druk Metho and the Drachukha Farmers’ group;
• Legal support to Druk Metho to develop a relationship with Swiss Alpine Herbs;
• Crowdsourcing support to Druk Metho for startup capital;
• Support to Druk Metho for a series of requests to potential donors and investors;
• Creation of advocacy films to promote Druk Metho story & business model;
• Support during the first annual audit, conducted in spring of 2020.
Royal Monetary Authority Social Enterprise Agenda Project
As an illustration of how the clinics’ work representing individual clients (in this case Druk Metho) may sometimes lead to valuable Policy Advocacy Projects (PAPs), the SEC has since started a PAP with the Royal Monetary Authority (RMA). Based on the SEC’s experience with the Druk Metho project, the RMA asked Prof. Adrian to serve as an expert to help formulate new guidelines on the promotion of social enterprises in Bhutan. Based on a newly developed definition for “Social Enterprises of Bhutan,” Prof. Adrian is supporting the RMA to draft a legislative framework for Impact Investment Funds as well as a Grant Facility for Social Enterprises.
The Druk Metho project was chosen as one of eight businesses nationwide that were featured at the 2019 Bhutan Economic Forum for Innovative Transformation (BEFIT). The RMA showcased the Druk Metho project as a model to emulate across the country, and encouraged Dzongkhag and national officials to look for similar governance features when deciding how to allocate the substantial sums of development funds available under the nation’s 12th Five Year Plan (2018-2023).
Biodynamic Food Forests Bhutan (BFFB)
Building on the positive experiences made with the Druk Metho model, the SEC is supporting the entrepreneur Biran Subba to develop a similar enterprise in the subtropical plains of Southern Bhutan together with a young farmers’ cooperative.
BFFB will develop climate resilient and pro-biodiversity Food Forest projects in Sarpang Dzongkhag. Based on guaranteed access to a premium market, the project will create a value-chain for growing and processing of organically certified ginger as well as other fruits, vegetables and crops. The core purpose of the project is to empower rural communities and strengthen community resilience through a social enterprise approach with local farming communities at the center of all efforts. With a “regenerative agriculture” approach, the project will be designed to fit the regional landscape and surrounding ecosystems. Implementation will start with one model farm, which has been identified in Tashithang Community of Umling Gewog, bordering the global biodiversity hotspot Royal Manas National Park. The farm on the Gurungtar Plateau will become the first Demeter certified Biodynamic farm in Bhutan and will serve as a learning, training and demonstration ground for investments that will follow from a pipeline of similar investment opportunities.
The model is established in partnership with the juice company Voelkel, market leader for organic juices in Germany and a pioneer in the Biodynamic farming movement. The company guarantees market access for a minimum of 100 tons of organically certified and pre-processed ginger at a premium price. The ambition of BFFB is to channel private and public funds into the value-chain development to the benefit of the involved farming communities.
The SEC will support the BFFB project to develop legal foundations, anchor the social and environmental mission in the legal DNA of the enterprise and establish the entire value chain, including requirements for high level organic certification and export to Germany.