SDO reign in farms doomed

The Supreme Court decision that annulled the stock distribution option (SDO) scheme at Hacienda Luisita, the country’s largest landed estate, has set the stage for the dismantling of similar arrangements in other estates as a mechanism to avoid their redistribution to farmers tilling the land under the agrarian reform program.

The November 22 decision created the biggest social earthquake since the enactment of the Comprehensive Agrarian Reform Law (CARL) in June 1988 allowing the stock transfer scheme in lieu of land distribution under the administration of President Cory Aquino barely two years after she took power from the Ferdinand Marcos dictatorship in the 1986 Edsa People Power Revolution.

Cory Aquino, whose family owns Hacienda Luisita, had claimed that CARL was the “centerpiece” of her commitment to social justice and redistribution of wealth in the country.

Luisita was the first estate to install the SDO. It is also the economic and political power base of the Aquino political dynasty, which has given the country two leaders in just two generations, including the incumbent President Aquino, in the transition from dictatorship to democratic restoration.

The Supreme Court’s decision is being regarded by peasant groups across the country as a precedent in dismantling SDOs in 10 other large estates.  In this sense, the court’s landmark ruling is expected to generate a domino effect on the ownership of land in the estates.

According to the Department of Agrarian Reform (DAR), there are about 7,700 hectares of land in 13 haciendas that have SDO arrangements.

Luisita, in Tarlac, has the biggest SDO coverage, at 4,900 ha, representing 63 percent of the total area where SDOs operate.

The second biggest estate with SDO is Ledesma Hermanos Agricultural Corp. with a 1,000-ha sugar plantation in Negros Occidental.

In a 14-0 vote, the ruling transcended the conflict between the Aquino administration and the court, 12 of whose members were appointed by then President Gloria Macapagal-Arroyo, over the issuance by the high tribunal of a temporary restraining order on the administration.

There’s no basis to conclude that the court-administration conflict has something to do with the ruling on the Luisita issue.

In its decision, the court ordered the management of Hacienda Luisita Inc. (HLI) to distribute 4,915.75 ha of the sugar estate to 6,296 registered farmworker-beneficiaries.

Although the court voided the SDO scheme at the hacienda, saying that it had not benefited the farmers who have been working the land for generations, the ruling did not go as far as declaring the SDO unconstitutional.

But it was emphatic in declaring that “the policy on agrarian reform is that control over agricultural lands must always be in the hands of the farmers.”

Control over land

In making the ruling, the high court affirmed the resolution of the Presidential Agrarian Reform Council (PARC), chaired by the President, revoking the stock distribution plan. (Arroyo was the President at the time.) In its July 5 ruling, the court upheld a decision of the DAR and PARC revoking the 1989 SDO in lieu of land distribution under CARL.

The decision penned by Associate Justice Presbitero Velasco Jr. also directed HLI to pay the farmers over P1.33 billion, representing the amount generated from the sale of the “converted” portions of the hacienda for commercial use.

In its 56-page ruling, the court said: “In line with our finding that control of agricultural lands must always be in the hands of the farmers, we reconsider our ruling that the qualified FWBs (farmworker-beneficiaries) should be given an option to remain stockholders of HLI … Upon review of the facts and circumstances, we realize that the FWBs will never have control over these agricultural lands for as long as they remain stockholders of HLI.”

Thus, the court said, the option to remain in HLI granted to the individual FWBs will have to be recalled and revoked.

In declaring an end to the stock distribution plan, the court ruled that Hacienda Luisita “will no longer be operating under the SDO and will only be treated as an ordinary private corporation” and the FWBs who remain as stockholders of HLI “will be treated as ordinary stockholders and will no longer be under the protective mantle of RA 6657 (CARL).”

Unconstitutional

The decision drew a strong dissenting opinion from Chief Justice Renato Corona, who did not go along with the majority decision not to rule on the constitutionality of the SDO, which he said was “unconstitutional.”

He argued that the fundamental standard of agrarian reform is Section 4, Article XIII of the Constitution, which declares, “The state shall by law,  undertake an agrarian reform program founded on the rights of farmers and regular farmworkers who are landless, to own directly or collectively the lands they till.”

Where the provision of a statute goes against the fundamental law, especially if it impairs rights and constitutional values, he said: “The court should not hesitate to strike it down as unconstitutional. In such a case, refusal to address the  issue of constitutionality squarely is neither prudence nor restraint but evasion of judicial duty and abdication of the court’s authority.”

Land to the tiller

He went on to say: “Agriculture is historically significant in Philippine society and economy and agrarian reform is imbued with public interest. Our constitutional history and tradition show that agrarian reform has always been a pillar of social justice. Relevantly, the records of the Constitutional Commission show that Hacienda Luisita has always been viewed as an acid test of genuine agrarian reform.

“Furthermore, the Constitution recognizes the primacy of the right of farmers and farmworkers to directly or collectively own the lands they till. Any artificial or superficial substitute, such as the stock distribution plan, diminishes the right and debases the constitutional intent,” he added.

“Unless there is land distribution, there can be no agrarian reform … (A) program that gives qualified beneficiaries stock certificates instead of land is no agrarian reform … The essential thrust of agrarian reform is land to the tiller.”

“The Constitution does not only bestow the landless farmers and farmworkers the right to own the land they till but also concedes that right to them and makes it a duty of the state to respect that right through genuine and authentic agrarian reform.”

“To subvert this right through a mechanism that allows stock distribution in lieu of land distribution as mandated by the Constitution strikes at the very heart of social justice.” (To be continued in next column: Will Aquino obstruct demise of Luisita?)