Hacienda Luisita Belongs to Cojuangco Tenants, Ex-DAR Exec Says

In a deal with government funders 46 years ago, Don Jose Cojuangco pledged to distribute the land now occupied by Hacienda Luisita to tenant farmers. A former director of the Department of Agrarian Reform says a court order binds the Cojuangcos to do so.

By Dabet Castañeda
Bulatlat

The Cojuangco family, owners of the embattled Hacienda Luisita, Inc. (HLI) and the Central Azucarera de Tarlac (CAT), is legally bound to distribute the 4,000-hectare land to the sugar farm workers of the plantation, a former Department of Agrarian Reform (DAR) director said. The 4,000 hectares are what is left of the 6,400-hectare plantation estate whose 2,400-ha portion is said to have been earmarked as “homelots” for the HLI’s “shareholders.”   Hacienda Luisita workers in a mass action for land,  just wages, and rights Photo by Dabet Castañeda

The former DAR official, Jose Santos, is one of government lawyers who on April 18, 1980 assisted Solicitor General Estelito Mendoza in filing Civil Case No. 131654 at the Regional Trial Court (RTC) of Manila, Branch XLIII against the Tarlac Development Corporation (Tadeco), the former company name of HLI and CAT.

Santos, who is now retired, is known to his colleagues to be an expert in handling big land disputes during his tenure at the government’s agrarian agency then known as the Ministry of Agrarian Reform (MAR). He worked there as director of the Bureau of Agrarian Legal Assistance (BALA).

In an exclusive interview with Bulatlat last week, Santos said he is breaking his silence to shed light on what actually transpired since 1958 when the late Cojuangco patriarch, Don Jose, acquired the hacienda. He also recalled the conditions on why Don Jose Cojuangco was able to do so, and the court case which government won over the family that legally binds them to distribute land to the hacienda’s tillers. 

Acquisition

Court records from the Manila RTC show that Don Jose was able to purchase Tadeco on March 31, 1958 using government funds from two agencies, the Central Bank of the Philippines (CBP) and the Government Service Insurance System (GSIS). The CBP, under Monetary Board Resolution No. 1240, granted a loan of US $2,128,480 to Don Jose on the condition that the latter would also buy the Hacienda Luisita sugar plantation. The patriarch’s original plan was to only purchase the sugar mill. As part of the condition, the hacienda is to be distributed to small farmers in line with the administration’s social justice program, Santos recalls.

But since the dollar loan was not enough to purchase both the sugar mill and the plantation, Don Jose again applied for a loan with the GSIS, court records show. The GSIS Board of Trustees, through Resolution No. 3202 approved the sum of P5.9 million in loan for the purchase of the 6,400-hectare Hacienda Luisita on the condition, among others, that the estate should be subdivided among tenants who shall pay the cost under “reasonable terms and conditions.“

Tents of sacada (seasonal) workers at Hacienda Luisita

Photo by Dabet Castañeda

Inquiry

In 1967, Conrado Estrella of the now defunct Land Authority inquired in writing with the Tadeco owner whether he has complied with the conditions set by the CBP and GSIS, citing in particular the distribution of the land among its tillers. Don Jose answered that when his group took over the hacienda, they found no tenants and that they had to begin operating the hacienda by hiring farm workers.

Ten years later, the CBP made a similar inquiry with the heirs of Don Jose, who by then had died. In March 1978, the Evening Post daily reported that about 100,000 residents of the 10 barrios comprising the hacienda filed a petition demanding the expropriation of the hacienda and its distribution to small farmers. 

Consequently in May of the same year, MAR officials made their own inquiry into the case. Tadeco vice-president Demetria Cojuangco replied that the condition with regards the land distribution could not be enforced.

Case

In 1980, Santos recalls, he assisted Solicitor General Mendoza in filing a case against the owners of Tadeco before the Manila RTC.  Mendoza and Santos asked the RTC to compel Tadeco to honor its pledge in the 1958 loan deal with the CBP and GSIS and transfer the 6,400-hectare hacienda to the MAR who shall then subdivide, distribute and resell the land at cost to small farmers. 

Again, Tadeco insisted the CBP and GSIS conditions could not be enforced first, because there were no tenants in the hacienda and, second, sugarcane plantations were not part of the scope of the government’s land reform program. To do so, Tadeco lawyers said, would be giving in to what could be seen as a “disguised confiscation of private property.” 

The case dragged on for five years until Dec. 2, 1985 when Judge Bernardo Pardo of the Manila RTC Branch XLIII decided in favor of government.  The Cojuangcos immediately appealed the decision before the Court of Appeals (CA). 

Dismissal

Santos recalls that the RTC decision vindicated the sugar farm workers’ cause. Before the appeal could be heard at the CA, however, one of the Cojuangco’s heirs, Corazon Cojuangco-Aquino (widow of Marcos’ arch-rival Benigno Aquino), became president of the country on the crest of a popular uprising that toppled the Marcos dictatorship in February 1986.

But since the new president was one of the owners of the hacienda, Santos said he began to lose faith that the court decision would bear fruit. His fears were proven right when in 1986, President Cojuangco-Aquino appointed Sedfrey Ordoñez, the Cojuangco family’s own legal counsel in the Hacienda Luisita case, as solicitor general. As solicitor general, Santos added, Ordoñez was also to represent government that in the first place, originally filed the case for expropriation.

As expected, the case at the CA did not move and out of frustration, Santos resigned on the same year from MAR, which had been renamed as Department of Agrarian Reform (DAR).

In 1988, the appellate court issued a dismissal resolution mainly due to the fact that President Cojuangco-Aquino had guaranteed that sugar farms would be included in her agrarian reform program known as the Comprehensive Agrarian Reform Program (CARP).

Francisco Chavez, who replaced Ordoñez as solicitor general, asked through the CA whether the CBP, DAR and the GSIS, as parties to the case, were still interested in following up the appeal, Santos said. The three parties, based on court records, answered in the negative but pointed out that Hacienda Luisita should be part of the CARP with the land distributed to small farmers. On May 18, 1988, the CA dismissed the appeal. 

Santos clarifies, however, that in dismissing the appeal the CA did not actually say that it was nullifying the RTC Manila decision of 1985 which orders that Hacienda Luisita should be subdivided, distributed and resold 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,” Santos says.

SDO

Saying that agrarian reform was the centerpiece of her administration, Mrs. Aquino instituted the CARP stating that land reform can be achieved by either actual land distribution or through a stock distribution scheme through the Stock Distribution Option (SDO). Subsequently, the Cojuangcos turned Hacienda Luisita into a corporation and is now known as Hacienda Luisita, Inc. (HLI), with the sugar farm workers classified from farm laborers to “stockholders” or “co-owners” of the said hacienda.

Ed Tadem, associate professor of Asian Studies at the University of the Philippines in Diliman, in a statement emailed to Bulatlat 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 the so-called CARP (R.A. 6657) by pro-landlord legislators during the term of President Aquino, he said, to allow landowners who run their farms as corporations to distribute shares of stocks to farm workers in lieu of outright land transfer.

Tadem added that serious observers and scholars of agrarian reform contend that stock distribution can never be a substitute for land transfer which is the heart and soul of any genuine land reform.

Santos, on the other hand, said that the SDO deprives the farmers’ right to the land they till which, first and foremost, is a legitimate issue.

Solution

In a Memorandum of Agreement (MoA) signed by Tadeco, the HLI, DAR and a handful of farm beneficiaries stated that they have entered into this agreement “in the spirit of the CARP with the end view of improving the lot of farm beneficiaries of the stock distribution plan and obtaining for them greater benefits.’

“The question is: Is the purpose of the SDO achieved? Has it become successful?” Santos asks. 

This question also rings in the mind of the sugar farm workers who have staged a work stoppage since Nov. 6 to, among their demands, force the DAR to review the implementation and effects of the SDO on their daily lives. 

Sugar farm workers say that since the incorporation of the hacienda, they have experienced greater hardships due to, among others, diminishing mandays caused by mechanization of sugar cane production and the land use conversion.

In Tadem’s statement, the Luisita stock option plan had 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 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."

If the SDO does not actually benefit the sugar farm workers of the HLI, Santos, said it is imperative for the DAR to nullify the implementation of the SDO at HLI and pursue the lower court decision against the Cojuangcos.

Under these circumstance, the former DAR official said, that makes the Cojuangcos legally bound to distribute the hacienda to small farmers.

Santos also scored the DAR and the administrations after President Aquino for having no political will to settle the agrarian unrest in the hacienda.  It is sad that it had to take the lives of the fighting farm beneficiaries to put this issue into the government’s attention once more, he said. Bulatlat

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