SC releases final ruling on Hacienda Luisita

By Ira Pedrasa,

Posted at May 03 2012 04:52 PM | Updated as of May 06 2012 08:03 PM

SC orders DAR, Landbank to determine compensation for Cojuangcos

MANILA, Philippines (UPDATED) - The Supreme Court has released its much awaited “final and executory” ruling on the distribution of the 4,916-hectare Hacienda Luisita to over 6,000 farmer-beneficiaries.

The en banc ruling, announced last April 24, also ordered the Department of Agrarian Reform (DAR) and the Land Bank of the Philippines to determine the just compensation for the original owners, the Cojuangco family.

The resolution provides the backdrop of what was announced by SC Spokesman and Court Administrator Jose Midas Marquez after the full court meeting in Baguio City.

Marquez had announced that the court voted 8-6 to compensate the landowners based on November 21, 1989 valuation instead of 2006 rates.

The 2006 rates would have meant a P5 billion payment to the Cojuangcos, while the 1989 valuation would amount to around P200 million.

The government, via Malacañang and the DAR, said they will wait for the final resolution of the SC before implementing the decision.

In the resolution, the SC warned, “Even though the compensation due to HLI will still be preliminarily determined by DAR and LBP…the fact that the reckoning point of ‘taking’ is already fixed at a certain date should already hasten the proceedings and not further cause undue hardship on the parties, especially the qualified [farmworker beneficiaries].”

Review by Special Agrarian Court

The just compensation will then be subject to a review by a special agrarian court (SAC).

“As regards the issue of interest on just compensation, We also leave this matter to the DAR and the LBP, subject to review by the [regional trial court] acting as a SAC,” said the resolution penned by Associate Justice Presbitero Velasco read.

The distribution of the sugar estate was first decided on November 22 last year. As such, the high court said “this [latest] Resolution is declared FINAL and EXECUTORY.  The entry of judgment of said decision shall be made upon the time of the promulgation of this Resolution…No further pleadings shall be entertained in this case.”

Based on the document, the resolution was promulgated also on April 24, 2012.

SC explains 1989 valuation

In its resolution, the SC explained why it used November 21, 1989 as the date for land valuation.

It said this was when the Cojuangco family's Tarlac Development Corp. (Tadeco) deprived itself of the ownership over the lands after these were transferred to Hacienda Luisita Inc. (HLI) via stock distribution.

HLI was specifically created to implement a stock distribution scheme so that the family can comply with the Comprehensive Agrarian Reform Program (CARP).

CARP allows landowners to offer stock distribution to farmer-beneficiaries instead of actual land distribution.

In a referendum later in 1989, 92.6 percent of farmers voted in favor of the Stock Distribution Option (SDO).
However, the farmers later asked that the SDO be revoked after complaining they have not received any dividends from HLI.

The Presidential Agrarian Reform Council later ordered the distribution of the estate. The SC issued a restraining order until its landmark ruling last year.

“These agricultural lands constituted as the capital contribution of the FWBs [farmworker-beneficiaries] in HLI. In effect, Tadeco deprived itself of the ownership over these lands when it transferred the same to HLI,” the high court said in its resolution.

Why SC rejected 2006 valuation

It said it could not subscribe to the January 2, 2006 date of taking presented by HLI since this would “in effect, be penalizing the qualified FWBs twice for acceding to the adoption of the stock distribution scheme.”

HLI said 2006 was the year that its obligations were met for the agricultural portion of the estate to be placed under compulsory acquisition.

The high court also said applying the 2006 valuation “would [make the farmers] pay higher amortizations for the agricultural lands that should have been given to them decades ago at a much lower cost were it not for the landowner’s initiative of adopting the stock distribution scheme ‘for free.’”

The farmers would, if the 2006 rates were adopted, have to pay higher amortizations.

The decision also quoted Associate Justice Teresita Leonardo De Castro in an earlier concurring opinion. “…’This will put the land beyond the capacity of the [FWBs] to pay,’ which this Court should not countenance.”