BULATLAT Investigative report

Poorly-paid Workers Lose Jobs – and Homes, Too

Farm workers of Hacienda Luisita dispute the claim by the Cojuangcos that SDO has been good for their thousands of farm workers. Farm workers say they have been losing their jobs, receiving pitiable pay and may lose their own homes, too.

By Dabet Castañda
Bulatlat
(Second of two parts)

Mourners during the burial of a farm worker killed in the massacre.

Photos by Jun Resurreccion/Tudla

HACIENDA LUISITA, Tarlac City - Together with the many women farmers of Hacienda Luisita, Lourdes Sicat braves the heat of the noontime sun and the cold breeze of the December night at the picket line. This is not to mention the threats of another violent dispersal following the carnage that happened on Nov. 16.

Aling Lourdes, 48, lives in Barangay (village) Texas, roughly a kilometer away from the main gate of the Central Azucarrera de Tarlac (CAT), the hacienda's sugar mill, where their picket line stands defiantly.

From May this year until the Nov. 6 strike, Aling Lourdes had only a total of five man-days (number of work days) for seven months. At the start of kabyaw (milling season), she was able to work for two days. The last pay slip which she received late November after deductions such as hospital loan, cash advance and other taxes was P23.23.

Aling Lourdes’s dire financial situation became worse when husband Ferdinand received a memo last Aug. 24 stating that he has been dropped from the rolls. Fifty-four-year old Ferdinand worked as a permanent mechanic for 27 years at the hacienda’s Motorpool.

But the scenario became bleaker on Oct. 21 when personnel from the sugar plantation's management went to their house that stood on a 240-sq.m. lot.  "Tapos, sinukat na nila yung bahay namin. Tinanong kami kung magkano ang nagastos namin sa pagpapagawa nito at kung

magkano ang mga gamit namin sa bahay" (Then they measured the size of our house. They asked us how much we spent for building it and the worth of our property), she said.

She found out later that most of the homes of farm workers who have been retrenched were inspected and estimated, too. Now, they all fear that after losing their jobs, they might also be losing their homes. "Saan na kaya kami pupunta?" (What fate awaits us?), was their common fear.

This is where the irony lies in Hacienda Luisita where thousands of sugar farm workers have struggled for 50 years to own the land they till.

After two agrarian reform programs instituted by political protagonists from two of the most influential clans in Philippine history – Presidential Decree No. 27 of Ferdinand Marcos and Comprehensive Agrarian Reform Program of Corazon Cojuangco-Aquino - the 6,443-ha. hacienda remains to be owned and controlled by the Cojuangco landlord clan.

The land tillers, meanwhile, are slowly being thrown out from the land that, they say, is historically theirs.

Old farm hand

The wrinkles on his face, the dry skin and the veins of his hands almost protruding tell a story of nearly nine decades of feudal exploitation.  Ernesto Basillio, now 89, tells is the epitome of a people locked in a long-drawn struggle and now feel betrayed.

Basillio says he was only 12 when he started working in Hacienda Luisita, then owned by the Spanish Compania General Tobacos de Filipinas (Tabacalera) under Don Antonio Lopez. The estate was named after Lopez's wife, Luisa.

He vividly recalls that even before Jose (Don Pepe) Cojuangco, Sr. – father of Corazon C. Aquino and Peping Cojuangco - acquired Tabacalera in 1958, he and thousands of sugar farm workers were petitioning for land distribution from then President Carlos P. Garcia.

The lease contract of the Spaniards was nearing its end, Basillio said, and the sugar farm workers were asking government to allocate funds to acquire the hacienda which will then be distributed to them.

However, before the Spaniards’ lease contract could end, Basillio said, Don Pepe showed interest in acquiring the Central Azucarera de Tarlac (CAT), the Tabacalera's sugar mill.

Court records from the Manila Regional Trial Court (RTC) show that instead of addressing the plea of the sugar farm workers the government, through Central Bank Monetary Board Resolution No. 1240 agreed to guarantee a dollar loan from the Manufacturers Trust Company of New York for Don Pepe to be able to acquire the CAT. The resolution stipulated however that Don Pepe should also acquire the 6,443-hectare Hacienda Luisita on condition that this would be distributed to its tenants and small farmers.

To acquire the hacienda, Don Pepe applied for loan from the Government Service Insurance System (GSIS). GSIS granted the loan with the same condition set by the CB: the land shall be distributed to the tenants at cost based on the government’s social justice program.

Government money

In short, as the court records show, Don Pepe was able to purchase the CAT sugar mill and the Luisita sugar plantation without shelling his own money but through government loans.

Basillio recalled that indeed when Don Pepe, under the Tarlac Development Corporation (Tadeco), acquired the CAT and the hacienda on May 11, 1958, the cane workers were told that the land would be sold at cost to them after 10 years - that is, in 1968.

Basillio and the thousands of sugar farm workers continued to work in the hacienda believing that 10 years later, they will finally own the land.

In March 1967, Land Authority Gov. Conrado Estrella inquired from Tadeco if it has complied with the CB and GSIS conditions. The company said that the conditions couldn't be met because there were neither tenants nor tenancy unrest in the hacienda.  What they employed, it said, were farm laborers.

It took another 10 years, in 1977, when the country was already under martial rule, for an inquiry to be done again on whether the conditions set by the CB and GSIS have been met. Demetria Cojuangco, Tadeco’s vice president, insisted that the conditions cannot be enforced.

On April 18, 1980, Marcos government lawyers led by Solicitor General Estelito Mendoza and Jose Santos of the ministry’s Bureau of Agrarian Legal Assistance filed a case (Civil Case No. 13164 before the Manila RTC Branch XLIII) against Tadeco. The complaint asked Tadeco to implement the conditions agreed upon in the acquisition of the hacienda.

On Dec. 5, 1985, two days after Corazon Aquino announced she was running against Marcos in the 1986 snap elections, Manila RTC Judge Bernardo Pardo handed down a decision ordering Tadeco to turn over the hacienda to the Ministry of Agrarian Reform (MAR). The ministry will, in turn, distribute the lands at cost to the farmer-beneficiaries.

"Nabuhayan ulit kami ng loob nuon" (It boosted our morale [to pursue our land claim]), Basillio said.

Although the Marcos government’s land case against the Cojuangcos may be politically motivated, as Tadeco in its appeal of the RTC decision alleged, it cannot rule out the sugar farm workers' legitimate claim to the land, Basillio argued.

Before the Court of Appeals (CA) could hear the appeal raised by Tadeco to contest Pardo’s decision, one of the Cojuangco heirs, Corazon Cojuangco-Aquino, assumed power through the 1986 popular uprising. In her early months as president, Mrs. Aquino made agrarian reform the centerpiece of her administration.

CARP

On June 7, 1988, she signed into law the Comprehensive Agrarian Reform Program (CARP or Republic Act 6657) covering sugar lands, among others. For the first time in agrarian history, land reform came in two options: land distribution and stock distribution.

While land distribution aimed to allocate parcels of land to the landless, poor peasants and tenants, stock distribution was an ambitious endeavor to allocate shares of stock to beneficiaries with the view of making them "co-owners" of the land.

Before the Stock Distribution Option (SDO) could become operational, Tadeco formed a spin-off corporation - the Hacienda Luisita, Inc. (HLI). Signed on May 11, 1989 and attested to by the Department of Agrarian Reform (DAR), a Memorandum of Agreement (MoA) to implement the SDO in the hacienda had the two corporations as first and second parties. The third party was the 6,296 “qualified” sugar farm workers.

The MoA provides that the sugar farm workers own only up to 33.3 percent of HLI while Tadeco and HLI, which are both owned and controlled by the Cojuangcos, own two-thirds of the corporation. This made the Cojuangcos still firmly in control of HLI under SDO.

The SDO helped the Cojuangcos evade not only the 1985 court ruling but more significantly CARP itself, critics said.

Meanwhile, from 6,443 has. the agricultural land of the hacienda shrank to only 4,915.75 ha. when HLI was incorporated. An article written by former Solicitor General Francisco Chavez and published in full by the Manila Bulletin Aug. 24, 1989, breaks down the total land area of the Tadeco:

(Note: The 329.3 has. that is missing from the original land area of 6,443 has. acquired by Tadeco from Tabacalera is unaccounted for.)

HLI's capital stock stood at P355.31 million. Based on this, the sugar farm beneficiaries supposedly own P118 million of the capital stock or 118 million shares that should be distributed for free to 6,296 farm workers within 30 years, the life span of the stock plan.

The 1989 MoA also stated that the parties entered into this agreement "with the end view of improving the lot of the qualified beneficiaries of the stock distribution plan and obtaining for them greater benefits." In the same article, Chavez reiterates the benefits the farmer-beneficiaries (FBs) are supposed to gain:  continued employment with salaries, allowances, and other benefits; 1/30th of the total agreed shares of stock to be distributed annually at no cost to the FBs, or a gross annual amount of P3.9 million; an amount equivalent to 3 percent of gross sales distributed annually to the FBs; FBs shall be entitled to dividends on shares transferred to them; and titled home lot of not more than 240 sq. m. to be given each qualified family beneficiary for free.

Comparing what it amounts to if a farmer-beneficiary opts for land distribution against acquiring stocks from the agro-corporation, Chavez said an FB would only acquire ¾ (or exactly .78 has.) of the land considering that there are 6,296 FBs entitled to a total of 4,915.75 ha.

"It is obvious," he continued, "that this size of land will not be able to support a farm-worker's family if he is to depend on the income potential of the size land."

Citing a study made by the Center for Research and Communications (CRC), Chavez said that a farm owner who cultivates a one-hectare lot and produces 40 tons of cane makes a net profit of only P17, 702 a year (based on 1989 prices).

On the other hand, an FB who works for 214 days in a year under the SDO will receive P33,967 in basic pay and fringe benefits.

In a House hearing on the implementation of the SDO in HLI on Dec. 14, HLI corporate secretary lawyer Emmanuel Cochico defended the Cojuangcos’ SDO saying the land distribution option would only give a small and economically-less beneficial lot to each farmer and hence no decent livelihood.

But why are the hacienda’s farm workers on strike?

Strike

In has been 15 years since the implementation of the SDO but the sugar farm workers are collectively unsatisfied and poor. Representing the farmers, the Alyansa ng mga Manggagawang Bukid sa Hacienda Luisita (Ambala or Alliance of Farm Workers in Hacienda Luisita) petitioned the DAR on Dec. 4, 2003 to revoke the SDO. The plantation farm workers’ union, ULWU, is asking for the nullification of the SDO which incidentally is one of the issues raised in their strike.

In a statement emailed to Bulatlat, Ed Tadem, associate professor of Asian Studies at the University of the Philippines in Diliman, said that the SDO was implemented by the former president, who is part of a landlord clan, to "evade land reform." This scheme was inserted into CARP, he said, by pro-landlord legislators during the term of President Aquino, to allow landowners who run their farms as corporations. Shares of stocks are distributed to farm workers in lieu of outright land transfer.

Citing scholars of agrarian reform, the UP professor said that stock distribution can never be a substitute for land transfer which is the heart and soul of any genuine land reform.

The Luisita stock option plan had also been denounced as "unconstitutional" by the University of the Philippines Law Center in a position paper submitted in June 1990 to the Senate Agrarian Reform Committee. The law center’s memorandum stated that the "scheme is violative not only of the social justice provisions but even more so of the specific provisions of the Constitution on agrarian reform" since it "allows the original owners to remain the controlling interest at the expense of the supposedly farmer beneficiaries."

ULWU president Rene Galang disputes claims by the Cojuangcos that under the SDO farm workers are assured of continued employment. In fact, he says, union records show that 1,009 farm beneficiaries lost their jobs since the implementation of the SDO in 1989. In addition, on Aug. 24, the HLI management laid off 150 permanent and 176 seasonal workers.

Aside from those already retrenched, about 2,500 more are set to be dropped from the master list, Galang said. To fast track this action, the HLI management is dangling an early retirement for the farm workers.

Bulatlat obtained a copy of a five-page letter issued by HLI on the early retirement plan. Anyone who avails of early retirement would be given a separation pay but would automatically be dropped from the rolls, the letter reads.

Profit losses

Justifying the recent mass retrenchment, management claims that it was due to big profit losses and company expenses the bulk of which was wages incurred in 2003. But a study by the independent research and think tank institute, Ibon Foundation, reveals that management bloated its figures in order to justify the retrenchment plan. Wages represent only 26 percent of company expenses based on actual number of man-days worked last year, Ibon said.

Based on the management commitment in the SDO as stated by Chavez, Galang said any retrenchment or forced retirement is a violation of the MoA.

But in an interview with Bulatlat, lawyer Vigor Mendoza, HLI vice-president for external affairs, said that to the contrary a retired or retrenched farm worker beneficiary continues to keep the shares he or she has accumulated through the number of years of employment at HLI. He clarified however that although the worker will not receive any more shares in future distributions he would continue to get the annual three percent share on the company's gross sales.

As regards the dividends, HLI Vice-President Mendoza said a retired or retrenched farm worker would be given his share of the dividends in the future, if the company declares any. He admitted though that the company has not distributed dividends in the past 15 years due to financial losses.

He also said that a retired or retrenched farm worker automatically loses his or her right to any of the company benefits including medical, educational, sugar and rice loans.

Mendoza also said that since 1994 when the Philippines’ trade was further liberalized sugar imports increased resulting in production streamlining at the HLI. Mendoza said that although the Luisita sugar plantation only needs about 250,000 workdays a year for its operations, management agreed to guarantee 423,000 man-days every year based on the CBA of July 1993. HLI management actually gives around 620,000 man days a year, he also said.

There are three worker classifications in HLI: the permanent who gets six man-days a week and takes home P 5,800 a month; the seasonal who gets one to two working days a week at P194.50 a day during off-season but are considered as permanent during milling season; and the casual master list workers with one to two man-days a week, P194.50 a day.

A sugar farm worker, Perfecto Versola of Barangay Balete, attests to the fact that contrary to Mendoza’s claim he has not received his share of the three percent gross sales of the company since his retirement in 1998. Versola’s statement is shared by other retired or retrenched sugar farm workers who were randomly interviewed by Bulatlat.

The reason for this, Galang explains, is that the production share is based on the number of man-days worked per year. In simple terms, it is a "no work, no pay, no share" policy. But the number of man-days has consistently diminished over the past years due to the introduction of mechanization and other management alibis, the workers say.

Reduced man-days

In Bulatlat's random interviews, a number of sugar farm workers said that before the SDO was implemented, they used to work five to six days a week. But since the HLI was incorporated in 1989, the number of workdays has gone down to only three to four days.

Similarly, a survey conducted by ULWU showed that only 341,852 man-days were allocated to the farm workers for the fiscal year 2003-2004. Translation: a minimum of 64 man-days or only P12,448 salary a year for every farm worker.

Galang further explained that the diminishing man-days are significantly affected by land use conversion and mechanization of production in the hacienda. HLI, he said, has acquired machines for farming, sprinkling, fertilizer dissemination and planting.

"While it is true that the mechanization of production makes the work faster and easier, these machines have practically replaced the sugar farm workers in the work field," he said. During planting season, 50 sugar farm workers could work on around five hectares a day while the mechanical planter could finish 12 hectares a day with the help of only 10 sugar farm workers and one machine operator. Good for the company, bad for the workers.

As a result, Galang said, master list workers are lured into early retirement and apply as contractual workers for any of the Cojuangcos’ companies or as household help. Eventually, they lose their right to any of the company's benefits.

In their petition to DAR for SDO revocation in Dec. 2003, the peasant alliance Ambala said that even if the Luisita estate is further reclassified into commercial and industrial land – as is now the trend – this will not dent the Cojuangcos’ dominance of the sugar industry in Central and Northern Luzon, it being the major miller of several sugar plantations.

Likewise, the HLI has received a major concession from government to refine 60 percent of imported raw sugar under the General Agreement on Tariffs and Trade (GATT). In fact in Sept. 2003, according to Ambala, CAT refined 250,000 tons of raw sugar imports even before the kabyawan which usually starts early October. This alone belies the company’s claim of profit losses, Ambala says.

From a total land area of 7,200 has. in 1958 when the Cojuangcos acquired the sugar mill and the plantation from its Spanish owners, the agriculture land of HLI now stands at only 4,415.75 ha., Galang said.

The remaining estate is doomed to shrink further. In 1995, 3,295 has. was approved by the Tarlac municipal council and provincial board for re-classification. The re-classified land will pass through the six barangays of Balete, Cut-Cut, Bantog, Lourdes, Central and Mapalacsiao and is for integration in the zoning map of the municipality covering 32,957, 212 sq.m.

So far, 500 has. of agricultural land have been converted into residential and industrial enclaves.

Eventually, with the conversion of a big chunk of the hacienda into residential, industrial and recreational use, only 1,000 has. will be left for sugar plantation.

Homes, too 

"Kung wala ng lupang agrikultural, wala na rin kaming trabaho" (Without any agricultural land left, we will lose all our jobs), Galang said. And homes, too. Since the land conversion projects would affect their villages, many families are bound to lose their homes.

Eighty-nine-year old Basillio, who retired in 1983 and is not a beneficiary of the SDO, chuckles and tries to hide his tears over the fact that he has practically lost his claim to the land he had tilled for 56 years. He got himself hired as a casual farm worker in 1927 at the age of 12.

"Kaya masaya ako na nag-strike ulit (ang mga manggagawang-bukid) ngayon" (So I’m glad the farm workers have gone on strike again), he said. He pins his only hope on their collective struggle to finally claim the land that they believe is rightfully theirs.

"Darating ang araw, magiging sa amin din itong Hacienda Luisita" (Someday this land will be ours), he said.

A former DAR official, Santos, sympathizes with the workers’ plight and believes that Hacienda Luisita estate belongs to the farm workers. In an exclusive interview with Bulatlat, the agrarian lawyer said he is breaking his silence just to emphasize that the farmers are the legitimate owners of the hacienda, citing the legal process involved in the acquisition of the property in 1958 and thereafter.

Mang Ernesto Basillio, 89, still fighting for a 50-year cause. Photos by Jes Aznar/Tudla

Santos said that when Mrs. Aquino – one of the owners of the hacienda - became president he began to lose faith that the RTC decision affirming the farmers’ rights over the land would ever materialize. The new president had appointed the Cojuangcos’ lawyer in the land case – Sedfrey Ordoñez – as solicitor general.

The Aquino government never pursued the appeal before the CA. The appeals court then dismissed the case in 1988 mainly due to assurances by the new administration that sugar farms would be included in a new land reform program.

Santos believes however that the CA dismissal did not nullify the RTC Manila decision in 1985 that stated that Hacienda Luisita should be subdivided, distributed and sold to the hacienda’s small farmers at cost.

In fact, the CA dismissal-resolution emphasized “it is not only conditional but also without prejudice to the reopening/revival of the case if the conditions of the DAR are not met.”

In his follow-up House testimony Dec. 16, HLI secretary Cochico said the Cojuangcos feared a civil war would erupt among the cane workers if land is distributed, because this would mean allotting good fertile parts of the estate to some, while the uncultivable ones would go to others. The SDO had to be resorted to, he said, to avoid a possible armed feud among the workers.

He may have misinterpreted the actual events. By all accounts, it is the SDO that is now pitting the thousands of workers against the Cojuangcos, resulting in the loss of at least eight lives. Bulatlat

BACK TO TOP ■  PRINTER-FRIENDLY VERSION  ■   COMMENT

© 2004 Bulatlat ■  Alipato Publications

Permission is granted to reprint or redistribute this article, provided its author/s and Bulatlat are properly credited and notified.