Peasants Worry Mediation Panel May Prolong Luisita SDO Case

by Anne Marxze D. Umil

MANILA — While parties to the case are preparing their memoranda and farmers await the Supreme Court decision on the validity of the Hacienda Luisita Stock Distribution Option, a special committee was tasked by the Supreme Court to ”mediate” and come up with a win-win proposal or a ”happy compromise” between the Hacienda Luisita Incorporated (HLI) and farmers.

“We fear that this (mediation panel) would only delay the hearings on the case,” United Luisita Workers’ Union acting president Lito Bais told Bulatlat. The Supreme Court has yet to decide on the validity of the Stock Distribution Option, the 2006 decision of the Department of Agrarian Reform and the Presidential Agrarian Reform Council ordering the distribution of the land to the farm workers, and the lifting of the four-year old temporary restraining order.

Bais said he was impressed by the toughness of the SC justices during the first oral argument but it seemed to have retreated during the second oral argument on August 24 when the High Court recommended the formation of a mediation panel.

Jobert Ilarde Pahilga, legal counsel of Ambala and executive trustee of the Sentra para sa Tunay na Repormang Agraryo, said they agreed to join the mediation panel because it is a call for lawyers to resolve a case amicably. The Republic Act No. 9285, a law that institutionalizes the use of an alternative dispute system in the country, provides the legal grounds for a court to form a mediation panel. However, Pahilga said this is the first time that the Supreme Court would form a mediation panel before issuing its decision.

Peasant groups fear that the mediation panel would still push for the SDO but would insert reforms. Pahilga said, however, that the peasants’ desire for the physical distribution of land, not shares, should be clear by now and that it is no longer negotiable. The most that the mediation panel should discuss, according to Pahilga, is how to arrive at an agreement regarding who the real beneficiaries would be, the compensation to be given to the Cojuanco family and the basis for land valuation.

Hacienda Luisita farmers protesting in front of the Supreme Court. VIEW THE SLIDESHOW. [2] (Photo by Clemente Bautista /

Despite their pessimism regarding the mediation panel, Pahilga said, they are still going to attend the panel’s hearings because “we do not want an agreement that sides with the Cojuanco family.” He added that the parties have the right to approve or deny the outcome of the supposed win-win proposal by the mediation panel. The first mediation panel hearing is scheduled on September 8, 2010.

Pahilga said the decision of the panel, once agreed upon by both parties, will be honored and adopted by the high court. “If not, the Supreme Court is expected to decide on the validity of SDO, the PARC decision and the lifting of the TRO.”

August 24 hearing

SC Chief Justice Renato Corona said “We would like to decide on this case as soon as we can,” but they extended by 10 more days the usually 20-day non-extendable period for the simultaneous filing of memoranda of all concerned parties.

A lot appears to be hinged on the memoranda to be submitted a month from now, because during the last two hearings the justices were asking the HLI lawyer to submit pertinent documents and proof of shares and benefits that actually went to farmers-beneficiaries, as well as those that went to the corporate owners.

Associate Justice Ma. Lourdes Sereno said some records are not clear, such as the records on whether the DAR arrived at a fair valuation of the land. Among others, she said, the government should review the effect of (land use) conversions. She said she also sensed that some parties like the government and HLI do not seem to want to disclose some information.

Of all the lawyers of farmworkers-beneficiaries present during August 24′s hearing, only Santoyo who claims to represent Noel Mallari of the union Ambala, declared his belief that the SDO is valid and is in accordance with the law. But when Justice Jose Reyes asked him if he has any knowledge of the equivalent of one share of stock compared to the land area to be able to give the farm workers an intelligent choice, Santoyo said does not.

Santoyo’s representation was also questioned by Pahilga. Santoyo claims to represent Noel Mallari of the union Ambala, but according to Pahilga, Mallari has misrepresented himself as president of Ambala.

“Mallari has never been president of Ambala, he was ousted from the organization when he was caught negotiating with the management of Hacienda Luisita,” Pahilga told the justices.

Differences in Number of Beneficiaries

During the first and second oral arguments the justices questioned the increase in the number of farmers-beneficiaries in HLI, the dilution of shares of the original beneficiaries it engendered and the HLI’s questionable use of man-days in determining the amount of shares a farmer would eventually get.

But during the last hearing, some justices revealed that although they may question all these, they still use as basis the HLI claim that the beneficiaries now number 10,500 instead of the original 6,000.

These differences in the number of beneficiaries matter because the high court is now faced with seemingly contending farmers’ groups – for instance the 10,500 beneficiaries cited in the Aug 6 compromise agreement and supposedly represented by Santoyo, and the more than 5,000 represented by Ambala when it filed the petition against the SDO.

The HLI had previously boasted that about 70 percent of the 10,502 farmer-beneficiaries chose to keep their stocks in the corporation instead of getting land.

One of the justices had compared the higher number of beneficiaries in the compromise agreement with the 1,000 farmworkers who opposed the SDO compromise agreement.

In Tuesday’s hearing, Pahilga told the Supreme Court he has more than 1,000 signatures of farm workers who are opposed to the SDO compromise agreement. But he was asked by Justice Roberto A. Abad to produce more signatures of farm worker beneficiaries of HLI as the 1,000 plus signatures he holds only comprise 10 percent of the farm workers.

PARC Haunted By “Mistakes and Omissions” Under Aquino Government

Associate Justice Arturo D. Brion pointed to the “omissions and violations that the Presidential Agrarian Reform Council (PARC) has committed” in coming up with the SDO in Hacienda Luisita in 1989. The qualification of farm worker beneficiaries was not indicated in the SDO which was approved by the PARC, said Brion. He said the PARC also committed violations in some terms and conditions under SDO.

Brion questioned Solicitor General Jose Anselmo Cadiz, whose office represented the Department of Agrarian Reform (DAR) and the Presidential Agrarian Reform Council (PARC) in the hearing, about how PARC originally came out with the SDO in Luisita.

Although Brion later clarified that he did “not mean to cast any aspersions on the integrity of the President,” he had questioned Cadiz, an appointee of President Benigno Aquino III, on whether former President Corazon Aquino took part in PARC’s deliberations in 1989 in approving the SDO agreement in Hacienda Luisita.

Brion said at the time the SDO was first crafted and approved by PARC, Cory Aquino, as president, was the chair of PARC, the vice-chair was the DAR secretary and the members are others from her Cabinet. “But the cabinet members are the alter ego of the president, right?” asked Brion.

Justice Velasco had previously reiterated that “the land should be distributed within the time frame provided by the law, and there comes the violation of the principles of CARL,” when the SDO in Luisita was crafted to be completed only after 30 years. Jusctice Perez also reiterated that HLI did not comply with the provisions of the Administrative Order 10 series of 1998.

Now Solicitor General Cadiz is arguing for the revocation of the SDO and that the Philippine Republic is for “land distribution.” He enumerated the legal bases for the revocation of the SDO, such as the 10 percent of dividends that were not distributed to farm workers. Cadiz also said Hacienda Luisita Inc. has no reasonsto “tie down the farmworkers to this uneven relationship” even if the corporation claims it has been “losing money”.

He also said the three percent of gross income of production has not been fully distributed to farm-workers. There has never been a claim and no record would prove that the three percent of gross income has been distributed. The title to own the land was also not given. It is also stated in the Administrative Order 10 series of 1998 that the economic status of the farm-workers must improve and yet “20 years hence, the farm-workers are still poor,” Cadiz said.

Furthermore, Cadiz said that as a result of the land use conversions at the hacienda, the land has been fragmented. “And the biggest violation, said Cadiz, is the man-day’s formula, which by requiring the farm-worker beneficiaries to earn their shares on this basis gave them with mere employee benefits instead of the equivalent of the land that they otherwise would have owned under compulsory acquisition. In other words the SDO contemplates that a farmer will be a beneficiary, the farmer will be an employee and a farmer will be share holder, but in this instance, since no land has been given, they are merely employees,” said Cadiz.

Towards the end of the six-hour hearing, the high court created a committee for mediation and asked all parties to submit their memoranda within 30 days beginning August 24.

Amid all these questions on PARC’s authority to decide on the land reform issue at Hacienda Luisita, the current PARC chair and scion, too, of the majority shareholders of Luisita, President Benigno Cojuangco Aquino announced that he would still keep his “hands off” the land issue. (

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