Supreme Court orders vote on Hacienda Luisita

FIELD OF DREAMS Benigno Palad, 61, tends to his sugarcane field at Hacienda Luisita while waiting for the Supreme Court’s decision on the final disposition of the estate. RAFFY LERMA

The farmers will again have to choose whether they want to have their own land or shares of stocks in the hacienda owned by the family of President Benigno Aquino III, according to the Supreme Court decision issued Tuesday on the thorny issue of land reform.

Voting 6-4, the high court denied the HLI petition to stop the Presidential Agrarian Reform Council ruling upholding the Department of Agrarian Reform (DAR) revocation in 2005 of the estate’s 16-year-old stock distribution option (SDO).

However, the magistrates ruled in a 90-page decision penned by Associate Justice Presbitero J. Velasco Jr. that they could not “turn a blind eye” to the overwhelming vote for SDO in 1989 of the 6,296 farmer-worker beneficiaries (FWBs) and called for a new referendum under DAR supervision.

“[The] DAR shall immediately schedule meetings with the said 6,296 FWBs and explain to them the effects, consequences and legal or practical implications of their choice, after which the FWBs will be asked to manifest, in secret voting, their choices in the ballot,” the court said in its ruling posted on the Newsbreak website.

“Of the 6,296 FWBs, he or she who wishes to continue as an HLI stockholder is entitled to 18,804.32 HLI shares, and, in case the HLI shares already given to him or her is less than 18,804.32 shares, the HLI is ordered to issue or distribute additional shares to complete said prescribed number of shares at no cost to the FWB within 30 days from finality of this decision.

“Other FWBs who do not belong to the original 6,296 qualified beneficiaries are not entitled to land distribution and shall remain as HLI shareholders. All salaries, benefits, 3-percent production share and 3-percent share in the proceeds of the sale of the 500-hectare converted land and the 80.51-hectare SCTEx lot and homelots already received by the 10,502 FWBs, composed of 6,296 original FWBs and 4,206 nonqualified FWBs, shall be respected with no obligation to refund or return them.”

Constitutionality

The majority opinion dismissed the workers’ contention that the SDO was unconstitutional, saying it was “too late in the day” to raise 18 years after it was enforced as an exception to the 1988 Comprehensive Agrarian Reform Program (CARP)—centerpiece of the late President Corazon Aquino’s social justice initiative to develop the countryside and remove a major cause of the world’s longest running communist insurgency.

Critics have said the SDO watered down the CARP program.

In a signal approval of corporate schemes that large plantations comprising more than 1 million hectares of land that have so far evaded the CARP, the court said “the old pastoral model of land ownership where nonhuman juridical persons, such as corporations were prohibited from owning agricultural lands are no longer realistic under existing conditions.”

A new CARP law with reforms passed in 2009 is mandated to complete the 1988 agrarian amelioration program in five years.

The court said that within 30 days after determining who from among the original FWBs would stay as stockholders, the DAR would segregate from the HLI agricultural land with an area of 4,915.75 hectares the 500-ha lot that had been converted for agro-industrial-commercial use, the 80.51-ha lot sold to the government as part of the Subic-Clark-Tarlac Expressway (SCTEx) and a total of 6,886.5 square meters designated as part of the individual 240 square meter plots designated as homelots.

HLI obligations

The court also held:

“After the segregation process, as indicated, is done, the remaining area shall be turned over to [the] DAR for immediate land distribution to the original qualified FWBs who opted not to remain as HLI stockholders.

“HLI is directed to pay the 6,296 FWBs the consideration of P500,000,000 received by it from Luisita Realty Inc. for the sale to the latter of 200 ha out of the 500 ha covered by the Aug. 14, 1996, conversion order, the consideration of P750,000,000 received by its owned subsidiary, Centennary Holdings Inc. for the sale of the remaining 300 ha of the aforementioned 500-hectare lot to Luisita Industrial Park Corp., and the price of P80,511,500 paid by the government through the Bases Conversion Development Authority for the sale of the 80.51-hectare lot used for the construction of the SCTEx road network.

“From the total amount of P1,330,000,000 (P500,000,000 + P750,000,000 + P80,511,500 = P 1,330,511,500) shall be deducted the 3 percent of the total gross sales from the production of the agricultural land and the 3 percent of the proceeds of said transfers that were paid to the FWBs, the taxes and expenses relating to the transfer of titles to the transferees, and the expenditures incurred by HLI and Centennary Holdings Inc. for legitimate corporate purposes.

“For this purpose, [the] DAR is ordered to engage the services of a reputable accounting firm approved by the parties to audit the books of HLI and Centennary Holdings Inc. to determine if the P1,330,000,000 proceeds of the sale of the three aforementioned lots were used or spent for legitimate corporate purposes. Any unspent or unused balance as determined by the audit shall be distributed to the 6,296 original FWBs.”

All about distribution

Only 13 magistrates remain in the high court with the recent retirement of Associate Justices Eduardo Nachura and Conchita Carpio-Morales.

Eleven justices participated in the deliberations. Senior Associate Justice Antonio Carpio inhibited as his law firm was the counsel of Rizal Commercial Baking Corp. (RCBC), which bought a parcel of the disputed land. Associate Justice Diosdado Peralta was on leave.

Of the 11 magistrates, “10 justices are of the view that the (PARC) resolution revoking the stock distribution plan must be upheld,” said court spokesperson Midas Marquez.

Only Chief Justice Renato Corona ruled that the provision in the Comprehensive Agrarian Reform Law of 1988 that allows for a stock distribution option is “unconstitutional,” Marquez said.

“For the Chief Justice, land reform means giving actual land and not giving actual certificates. But the Chief Justice is also of the view, for the consideration of fairness and equity, that qualified farmer-beneficiaries may waive the right to land and instead get shares of stocks,” Marquez added.

Compulsory acquisition

Six justices said the DAR referendum would ask the FWBs if they wanted to stay with the corporation and instead get shares of stocks or if they wanted to get actual land, according to Marquez.

The six were Associate Justices Teresita Leonardo-de Castro, Lucas Bersamin, Roberto Abad, Jose Perez, Mariano del Castillo and Presbitero Velasco Jr., who wrote the majority decision.

“Four justices, however, are of the view since the stock distribution plan has been revoked, then the land should be under compulsory land reform and therefore, the farm worker-beneficiaries should be given actual land,” Marquez said.

The four were Associate Justices Martin Villarama, Jose Mendoza, Ma. Lourdes Sereno, and Arturo Brion, who wrote the dissenting opinion.

Motion for recon

Sereno agreed in some parts with the minority opinion but also wrote her own dissenting opinion, Marquez said.

Parties in the case may still file a motion for reconsideration within 15 days.

The beneficiaries who will choose to have stock options will be entitled to 18,804.32 HLI shares, Marquez said, citing the Supreme Court decision.

A total of 4,915.75 hectares of land, minus the 500 hectares now owned by “innocent buyer” RCBC, will be distributed to the farmers who want to own their land.

RCBC told the high court that it bought land from Luisita Industrial Park Corp., unaware that it was part of the ongoing land dispute.