Luisita lawyer: Only courts can revoke stock option

(Updated 11:56 pm) Opening the first high-profile court drama of the Aquino administration, the Hacienda Luisita Inc. (HLI) on Wednesday argued that only the judiciary can void the stock distribution option (SDO) agreement it forged with its farmer beneficiaries in May 1989.
In 2005, in the wake of the so-called Luisita Massacre, the Presidential Agrarian Reform Council (PARC), chaired by then-President Gloria Arroyo, ordered the revocation of Luisita's SDO and the distribution of the hacienda’s land to the farmer beneficiaries. In 2006, HLI convinced the Supreme Court to issue a temporary restraining order and stop the PARC from enforcing its order. President Noynoy Aquino's Cojuangco side of his family has owned the 6,453-hectare sugar plantation since 1958, successfully resisting the efforts of government, including the Marcos dictatorship, to wrest it away and distribute it to farmers as mandated by law. After Noynoy's mother Cory Aquino promised in 1986 to subject the land to agrarian reform, her administration instead gave farmer-beneficiaries certificates of corporate stock instead of land. The validity of the stock distribution option (SDO) is what is being argued before the Supreme Court. Since the land dispute was brought to the SC four years ago, the high court only began to hear the oral arguments on the Hacienda Luisita case on Wednesday. During the SC hearing on Wednesday, Gener Asuncion, HLI counsel, argued that the controversial agreement was valid and said that the PARC cannot revoke the SDO agreement (SDOA) because only a judicial body can do so. In 2005, PARC revoked the SDO scheme, which purportedly failed to fulfill the objectives of the Comprehensive Agrarian Reform Law of promoting social justice and improving the lives of the farmers. PARC also ordered the distribution of some 4,915 hectares of land covered by the Comprehensive Agrarian Reform Program (CARP). "The PARC, in canceling the SDOA, committed an error," said Asuncion. However, Associate Justice Jose Perez said that because PARC was the agency that approved the SDOA in May 1989, it can also revoke it. However, Asuncion replied: "We found no law conferring jurisdiction upon the PARC." Validity of the SDO Asuncion likewise defended the validity of the May 1989 SDOA and the compromise deal HLI forged with farmers on August 6 this year. "I would like to proceed that there is no issue as to the validity of the SDO," Asuncion told Associate Justice Perez. Twelve of the 15 magistrates of the SC were present during the hearing of oral arguments. Only Associate Justices Antonio Carpio, Eduardo Nachura, and Arturo Brion were absent. Newly-appointed Associate Justice Ma. Lourdes Sereno was present. The hearing of oral arguments is still ongoing as of posting time. The justices are still asking Asuncion their clarificatory questions. Meanwhile, Associate Justice Jose Perez also said the SDO deal might have violated the 1988 Comprehensive Agrarian Reform Law. Under Section 31 of the law, stock distribution should be implemented within two years. Otherwise, "the agricultural land of the corporate owners or corporation shall be subject to the compulsory coverage of this Act." However, under the SDO agreement in 1989, stocks would be transferred to the farmers within 30 years, or until 2019. This means that the transfer of the stocks representing the farm workers' 33% share of HLI was spread over a period of 30 years. In 1989, there were more than 6,200 farmer beneficiaries. Over time, the number ballooned to more than 10,500. On Wednesday, Associate Justice Abad asked the SDO agreement covered the additional farmer beneficiaries when they did not even take part in the controversial stock distribution option deal in May 1989. “Did those new workers give up their rights [in the land] that belong to them [in 1989?] They did not. The new workers should just be workers, they should have not watered down the shares of [the other farmers]," said Abad. Asuncion, however, made no reply. Certificate of Compliance Justice Peralta also raised the matter of DAR's non-issuance of a Certificate of Compliance in connection with Hacienda Luisita's SDO scheme. Section 11 of DAR Administrative Order No. 10, Series of 1988 states that stocks should be transferred to beneficiaries within 60 days after the SDO is implemented. Since 1989, however, DAR has not yet issued a Certificate of Compliance because the full transfer of stocks had not yet happened. In an interview with reporters later, Asuncion said the certificate is not necessary. "We don't need that document," said the HLI lawyer. 'Troubled history' of Hacienda Luisita Meanwhile, Associate Justice Presbitero Velasco cited the troubled history of the Hacienda Luisita, owned by the Cojuangcos, family of former President Corazon Aquino and her son, incumbent President Beningo "Noynoy" Aquino III. Velasco pointed out that Jose Cojuangco Sr., Cory's father, acquired the 6,543-hectare land in 1957 through loans that included one from the Government Service Insurance System (GSIS). Velasco said government lenders agreed to release the loan on the condition that the land would be distributed to farmer tenants in 10 years or by 1967. Velasco asked Asuncion why land distribution did not take place in 1967 and Asuncion replied that "there were no tenants" at the hacienda at that time. Velasco also pointed out that in May 1980, the Marcos government filed a case against the Cojuangco-owned Tarlac Development Co. (TADECO) at the Manila Regional Trial Court. The Marcos government asked the court to compel TADECO to distribute the land. However, when Cory Aquino was president in May 1988, the government itself withdrew its case against the TADECO, Velasco said. Next hearing: August 24 After more than five hours since the hearing began, the SC on Wednesday night temporarily suspended the hearing of oral arguments for the Hacienda Luisita case. Chief Justice Renato Corona set the next hearing next Tuesday, August 24. Only HLI counsel Gener Asuncion, HLI corporate secretary Eufrocinio dela Merced Jr., Rizal Commercial Banking Corporation counsel Anacleto Diaz, and Luisita Industrial Park Corp. counsel Mario Luz Bautista were able to face the court for the oral arguments. The counsels for other respondents in the case -- PARC, DAR, and farmers' groups -- will face the court next Tuesday. Wednesday's oral arguments began at 2 p.m. and ended at 7:10 p.m. –VVP, HS, GMANews.TV