1. Spanish period Hacienda Luisita (HL) was once owned by the Spanish owners “Compania General de Tabacos de Filipinas’ (TABACALERA) with 6, 443-hectare mixed agricultural-industrial- resiciential in Tarlac “Martial law administration filed a suit before the Manila Regional Trial Court (RTC) against TADECO, etal for them to surrender HL to then Ministry of Agrarian Reform (now DAR) so that the land can be distributed to farmers at cost -Cojuangcos alleged that HL does not have tenants, besides w/sugar lands are not covered by existing agrarian reform legislation HACIENDA LUISITA: TIMELINE - Problems with Huk rebels led TABACALERA to sell HL and the sugar mill Central Azucarera de Tarlac. ~The Tarlac Development Corporation (TADECO), ‘owned and/or controlled by the Jose “Pepe” Cojuangco, St Group, was willing to buy, -MRTC ordered TADECO to surrender HL to the Ministry of Agrarian Reform, Cojuangcos decried this as an act of harassment and © elevated the matter to the Court of Appeals. ‘The Philippine government assisted TADECO in obtaining a dollar loan from a US bank to pay for the dollar component of the sale, while the GSIS extended a P5.911 M loan to pay the peso price component. Aquino + 1987 January 22 -Mendiola Massacre luly 22 Cory issues Presidential Proclamation 131 and EO 229 calling for a Comprehensive Agrarian Reform Program outlining her agrarian reform program, -E0 229 created the Presidential Agrarian Reform Council (PARC) as the highest policy-making body that formulates all policies, rules, and regulations necessary for the implementation of CARP. presidency One of the conditions for the GSIS loan was that the lots comprising HL shall be subdivided by TADECO and sold at cost to the tenants, if any, and whenever [| conditions should exist warranting such action ‘The Office of the Solicitor General under Sol. Gen. Frank | Chavez moved to ee CA dismissed the case the Marcos | instituted and won. |Pres. Aquino signed into Jaw RA 6657 (Comprehensive Agrarian Reform Law). A clause included Stock District, Office ($00), which allows landowners to give farmers shares of stock In a corporation instead of land, August 23 TADECO established Hacienda Luisita lnc (HLD to implement the distribution of stocks to farmers in the hacienda 4. Fidel Ramos Presidency +1998 September 1 ‘The Provincial Board of Tarlac under Gov Margarita “Tingting” Cojuangco, passed a resolution that reclassified 3, 290 out of Luisita’s 4, 915, hectares from agricultural to commercial, industrial and residential August 14 DAR approved for conversion 500 hectares of the Luisita land, -Cojuangcos justified Luisita’s SDO by saying itwas impractical to divide the hacienda’s 4, 915.75 hectares among 6,296 farm workers because this would give farmers less than one hectare of land each (.78 h of land per person), March 22, Deed of Assignment and Conveyance executed between TADECO and HLI where TADECO transferred and conveyed to HLI the titles over the lots in 5. Gloria Arroyo presidency -By this time, the farm workers’ daily wage flattened at P194.50 and work days were down to one per week. ‘The hacienda workers then filed a petition with the DAR to have the SDO agreement revoked October 14 -Workers from the HLL supervisory group petitioned the DAR to revoke the SDO, saying they were not receiving the dividends and other benefits earlier promised to them. Two months later, a petition }| to revoke the SDO bearing more than 5.300 signatures ws }) filed by union officers at the DAR to revoke Luisita’s farm workers: were asked to choose between stocks or land inareferendum. The SDO won 92.9% of the F) vote. A 2x! referendum and information campaign were held five months later and ‘SDO won again, getting By 96.75% of the vote. ; May. When the CARP was implemented in HL, the | farm workers’ ‘ownership of the plantation was pegged at 33%, while the Cojuangcos retained the SDO and stop land conversion in Luisita + 2004 July ~The union tried to negotiate a wage H increase to P25 per day. Workers also asked that the work days be increased to 2- 3 days per week, instead of just once a disagreed, claiming that the company was losing money. November 16 Luisita massacre +» 2005, November 25. 2014: February 22 ~The DAR's Task Force Luisita conducted an F) investigation and focus group discussions among the farm workers [| week. The management # HACIENDA LUISITA: TIMELINE 67%, Assets of HLI is put at P590 M, of which 196.6 M comprise the value of the agricultural land. November 21 ‘Then- Agrarian Reform Sec. Miriam Defensor- F| Santiago approved the SDO agreement of Luisita, -Task Force Luisita | submitted the findings and recommendations} from its investigation, which became the government's basis for revoking Luisita’s Stock Distribution Option (SDO) and ordering the distribution of the H hacienda’s land to the farmers a few months later. E| Task Force Luisita recommended the revocation of the stock distribution agreement forged in May 1989, saying the SDO failed to fulfill the objectives of the Comprehensive Agrarian Reform Law b 5 t i 25 about promoting social justice and improving the lives of the farmers. December 22 Presidential Agrarian Retorm Council (PARC)Issued Resolution No. 2008-32-01, ordering the revocation of Luisita’s SDO agreement and the distribution of the hacienda's beneficiaries, 2006 February 1 -HLI asked the Supreme Court to prevent the PARG from enforcing the resolution 200634-01was issued ‘The Supreme Court granted HLI's petition snd issued a temporary restraining order, preventing the PARC from canceling the SDO agreement, HACIENDA LUISITA: TIMELINE june -Negotiations between the ILI management and some farmers began after representatives of AMBALA and the Supervisory group wrote to DAR that they are amenable to an out- of-court settlement. 6. Noynoy Aquino presidency | a compromise agreement giving the farmers the chance to remain as HL stockholders, or receive their share of Hacienda Luisita land. Many voted to retain their stocks and receive cash from HLI, only to complain later that they got lite HLI asked the Supreme Court to approve the compromise deal the agreement to represent the plantation’s farmer. beneficiaries. * 2011 duly 5 ‘The Supreme Court held the PARC's order revoking Hacienda Luisita Inc's stock distribution plan, The SC also ordered the DAR to administer the conduct of another referendum where the want to remain as HLT stockholders or receive actual land instead. ‘The SC said that while the stock distribution plan is nullified, the qualified farmer beneficiaries must still be given the option to choose if they want to remain as stockholders or not. \z/ * November 22 Responding to an appeal, court votes 14-0 for distribution of 4,195 hectares of the hacienda t0 6, 296 farm worker ff valuation. HL files a motion for reconsideration and clarification against the high tribunal's ruling A faction of the farmers’ groups asked the SC to junk the ‘compromise deal because it was signed even before the high court could rule on the Validity of the stock distribution option {SDO), one of the two choices offered by HLL to the farmers in the agreement (the other choice was land distribution). The rival faction also questioned the authority of the signatories in theHACIENDA LUISITA INC. V. PRESIDENTIAL AGRARARIAN REFORM COUNCIL: ISSUES AND RULING ISSUES RULING Does the Presidential Agrarian Reform Council (PARC) have jurisdiction, power and authority to nullify or revoke the Stock Distribution Option ‘Agreement? | The PARC has jurisdiction, power, and authority to nullify or revoke the Stock Distribution, | Option Agreement. While RA 6657 or other executive issuances on agrarian reform do not explicitly vest the PARC with the power to revoke or recall an approved. Stock Distribution Plan, such power or authority is deemed possessed under the doctrine of necessary implication, a basic postulate that what is implied in a statute is as much a part of it as that which is expressed. Following the doctrine of necessary implication, it may be stated that the conferment of express power to approve a plan for stock distribution of the agricultural land of corporate owners necessarily includes the power to revoke or recall the approval of the plan. ' Was the PARC correet in inullfying of revoking the Stock Distribution Option Agreement? ; Yes. | | Firstly, HLI has not fully complied with its undertaking to distribute homelots to the | beneficiaries under the Stock Distribution Plan despite the lapse of 16 years. With regard to | the homelots already awarded or earmarked, the beneficiaries are not obliged to return the | § sam T pay for its value since this is 4 benefit granted under the Stock Distribution | | Plan. The homelots do not form part of the 4, 915.75 hectares covered by the Stock | | Distribution Plan but were taken from the 120. 9234 hectare residential lot owned by | | TADECO. Those who did not receive the homelots as of this revocation of the Stock istribution Plan will no longer be entitled to homelots. Thus, in the determination of the ultimate agricultural land that will be subjected to land distribution, the aggregate area of the homelots will no longer be deducted. However, since the Stack Distribution Plan was | already revoked with finality, the government through the DAR must pay HLI the just, | compensation for said homelots in consonance with Sec. 4, Art. XIII of the 1987 | Constitution that the taking of land for use in the agrarian reform program is “subject to the | payment of just compensation.” | { Secondly, the mechanics and timelines of stock distribution violate the provisions of DAO |10. The distribution of the shares of stock although not entailing 2 cash out from the | beneficiaries, is contingent on the number of “man days", that is the number of days that | | the beneficiaries have worked during the year. By providing that the number of shares of | the original 1989 beneficiaries shall depend on the number of "man days,” HLI violated the | rule on stock distribution and effectively deprived the beneficiaries of equal shares of stock in the corporation, far in net effect, these 6, 296 qualified beneficiaries, who theoretically had given up their rights to the land that could have been distributed to them, suffered a dilution of their due share entitlement. HLI has chosen to use the shares earmarked for | farmworkers as reward system chips to water down the shares of the original 6, 296 | | beneficiaries. {tis clear that the original 6,296 beneficiaries, who were qualified at the time of the approval of the Stock Distribution Plan, suffered from watering the down the shares. | Each original heneficiary is entitled to 18, 804, 32 HLI shares. The original beneficiaries got | s than the gueranteed 18, 804. 32 HLI shares per beneficiery, because the acquisition and distribution of the HLI shares were based on "man day” or “number of day worked” by the beneficiaries in a year's time. As explained by HLI, a beneficiary needs to work for at least 37 days in a fiscal year before he or she becomes entitled to HLI shares. If it falls | | betow 37 days, the beneficiary unfortunately, does not get any share at year end.[ Should the 80. 51 | As regards the 80.51-hectare land transferred to the government for the use as part of the hectare land transferred | SCTEX, this should also be excluded from the compulsory agrarian reform coverage tothe government for | considering that the transfer was consistent with the government's exercise of the power of use as part of the | eminent domain and none of the parties actually questioned the transfer. But considering SCTEX, be excluded _| that the sale and transfer of the 80. 51 hectare SCTEX lot come after the compulsory fromthe compulsory | coverage has taken place, the beneficiaries should have their corresponding share of the agrarian reform land's value, for which HLI is liable. coverage? ‘The proceeds realized from the sale and/or disposition thereof should accrue for the | benefit of the FWBs, less the 3% share, taxes and expenses relating to the transfer of titles [eeasaeanaeac to the transferees, and the expenditure incurred by HLL. | Whether or not the ‘SC maintained the date of taking is Nov. 21, 1989, the date when the PARC approved HLI's | Court erred in ruling —_| SDP, in view of the fact that this is the time that the FWBs were considered to own and that in determining the | possess the agricultural lands in HL. Such approval is akin to a notice of coverage ordinarily | just compensation, the | issued under compulsory acquisition. Taking occurs when agricultural lands are voluntarily | date of taking is | offered by a landowner and approved by PARC for CARP coverage through the stock | November 21,1989 | distribution scheme. If the Court adhere to HLI's view that the Notice of Coverage issued on | when PARC approved | January 2, 2006, this Court would, in effect, be penalizing the qualified FWBs twice for | HLf's Stock Distribution | acceding to the adoption of the stock distribution: | Plan (SDP)? (1) depriving the qualified FWBs of the agricultural land that they should have gotten | early on were it not for the adoption of the stock distribution scheme of which they | only become minority stockholders | (2) making them pay higher amortizations for the agricultural lands that they 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 Court dispositively ordered the DAR and the Land Bank of the Philippines to determine the just compensation due to HLI subject to review by the RTC acting as ‘Special Agrarian Court. | The investment on SACs of original and exclusive jurisdiction over all petitions for | the determination of just compensation to landowners will not preclude the Court | | from ruling upon a matter that may-already be resolved based on the records | | before. |e 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 FWBs. Balita, Fatima Dexie D. Sources: Ungos fr, P.D. & Ungos Il, P.Q. (2013). “Agrarian and Social Legislation, ppt $1-5S, 85-87 Deparment of Agrarian Reform, FAQs on Landowners’ Just Compensation, series of 2013 G2 No, 171101, Hacienda Luisitav, Luisita Industrial Park April 24, 2012 GR. No. 171101, Hacienda Luisitav, Presidential Agrarian Reform Council July 5, 2011 GMA News Online, Holding on: A Hacienda timeline from Spanish to the Noynoy eras, atep://www.gmanetwork.com/news,/story/198854/news/nation/holding-on-a: hacienda-luisit-timeline:fre he noynoy-eras Inquirer. Net, Hacienda timeline, bi fajnguirernet/ 18208 /hacienda-luisita-timelineLAND VALUATION: Just compensation (Sec. 17 of RA 6657) | 1 HACIENDA LUSITA v. PRESIDENTIAL AGRARIAN REFORM COUNCIL, GR NO. 171101, April 24, 2012 Whatis Land Valuation? ~ It is total cost of the land agreed upon by the parties whether payable in kind or in money. ¥ Parties: Department of Agrarian Reform (DAR), Land Bank and the land owner What is Just Compensation? - It is the “full and fair equivalent of the property taken from its owner by the expropriator.” The measure is not the taker’s gain, but the owner’s loss. Y It is the right of the landowners to paid just compensation for their landholdings acquired by the government for distribution to Agrarian Reform Beneficiaries! - ftembraces: L. The correct determination of the amount to be paid to the landowner {i The prompt payment: payment within a reasonable time from its taking A, What factors are considered in the determination of just compensation? ~ The following are enumerated in Sec. 17 of the Comprehensive Agrarian Law (RA 6657) as factors in the determination of just compensation: (CONSIDER) Current value of like properties, Cost of acquisit Official assessment by government assessors Nature of land, Non-payment of taxes or loans secured from government financing institutions Sworn value by landowner Income Declaration of taxes Economic and social benefits contributed by farmers Real/actual use > ‘Those factors are translated into a basic formula by the DAR that shall be considered subject to the final decision of the proper court. Factors in the basic formula by the DAR ¥ Capitalized Net Income (CND) which is based on the land use and productivity ¥ Comparable Sales (CS) which is based 70% of the BIR zonal value ¥ Market Value (MV) which is based on the Tax Declaration "(Art III, Sec. 9 of the 1987 Constitution) The basi Il fact CNI x 0.60 x 030 + MV x 0.10 =Land Value > When CNIis not present CSx 0.90 + MVx 0.10 = Land Value When CS factor is not present CNIx 0.90 + MV x 0.10 = Land Value > When CS and CNI factors are not present MV x2= Land ValueLAND VALUATION: Just compensation (Sec. 17 of RA 6657) | 2 HACIENDA LUSITA v. PRESIDENTIAL AGRARIAN REFORM COUNCIL, GR NO. 171101, April 24,2012 B. When to calculate the valuation? + In determining just compensation, the value of the property at the time it was taken from the owner and appropriated by the government shall be the basis. - Ifthe government takes possession of the land before the institution of expropriation proceedings: Y The value should be fixed as of the time of the taking of possession, not of the filing of the complaint. + The ‘time of taking’ refers to that stage when the title is transferred to the Republic of the Philippines or the beneficiaries and when the agricultural land voluntarily offered by a landowner was approved by Presidential Agrarian Reform Council (PARC) for agrarian reform coverage through the stock distribution scheme. Y If there is undue delay in payment, the value of the property should be determined not at the time of taking of the land, but at the time of full payment. * How is the determination of just compensation under CARL? 1) Commences with Land Bank determining the value of the lands. 2) Using Land Bank's valuation, the DAR makes an offer to the landowner. 3) The land owner may accept or reject the offer > In case the landowner rejects the offer: i. The DAR conducts a summary administrative proceeding to determine the compensation for the land by requiring the landowner ii, The Land Bank and other interested parties to submit evidence as to the just compensation. iii. A party who disagrees with the decision of the adjudicator may bring the matter to the Regional Trial Court designated as a Special Agrarian Court for final determination of just compensation. + Who has the authority to determine whether the land valuation computations of the Land Bank in accordance with the rules or administrative orders? [ AUTHORITY AMOUNT OF INITIAL LAND | | _| VALUATION OF THE LAND BANK ___| | Provincial Agrarian Reform Adjudicators | Less than P10M L(PARAD) | I t Regional Agrarian Reform Adjudicators | P10M to PS0M (RARAD} i Department of Agrarian Reform | Above P50M | Adjudication Board (DARAB)