THE Hacienda Luisita management defended the validity of the stocks distribution option (SDO) it offered to its farmers as a form of compliance to the Comprehensive Agrarian Reform Program (Carp) in 1989.

During the oral arguments Wednesday at the Supreme Court, HLI counsel Gener Asuncion maintained the HLI's position that the Presidential Agrarian Reform Council (Parc) gravely abused its authority when it ordered the revocation of the SDO via Resolution 205-32-01 dated December 22, 2005.

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The counsel also chided Parc in ordering the distribution of the Cojuangco family's vast sugar lands to farmer-beneficiaries, prompting the management to seek redress before the SC.

Asuncion said the HLI fully complied with the requirements under Section 31 of Republic Act (RA) 6657, or the Carp law for the approval of the SDO.

Section 31 of RA 6657 states that corporate landowners may voluntarily transfer ownership over their agricultural landholdings to the government pursuant to Section 20 hereof or to qualified beneficiaries, under such terms and conditions, subject to confirmation by the Department of Agrarian Reform.

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-percent share of HLI was spread over a period of 30 years.

This provision further provides that upon certification by the agrarian reform, corporations owning agricultural lands may give their qualified beneficiaries the right to purchase the proportion of the capital stock of the corporation of the agricultural land, actually devoted to agricultural activities.

"Is there legal basis for revocation of SDO? We say no. In the first place, the conditions for approval of option under CARP law had been met and satisfied by HLI. That is why as consequence of the satisfaction of the requirements, the SDO was approved. The approval of that option evidenced our compliance of Section 31 of the agrarian reform law," the HLI lawyer said.

Asuncion also belied allegations of another group of farm workers that those who signed the SDO are the not the real beneficiaries. He said the mere fact that the complainants were the ones named as respondents in the suit at the SC showed that they are the real party-in-interest.

While saying that HLI recognized the power of Parc to approve the SDOA, he said the council lacked authority to revoke it as such is already the duty of the courts.

"The revocation is judicial in character, so it's up to the courts. I can proceed from the premise that this SDO agreement has ascended to the level of a contract after its approval and implementation. Any breach of contract is judicial in character and recognizable by regular courts," the lawyer said.

In testing the arguments of HLI, SC magistrates said if Parc has the right to approve the SDO, it also has the right to revoke it.

Asuncion said that as far as the HLI is concerned, the SDOA has already matured into a contract, and the acts of Parc in revoking it amounts to impairment of their constitutional right under the non-impairment rule under Section 10, Article 3 of the Constitution. Thus, Parc's revocation is now within the ambit of the judiciary.

He said Parc can only approve or disapprove the SDO, but not revoke the SDO agreement (SDOA) because only a judicial body can do so, as there is no law conferring such jurisdiction upon the Parc.

But Associate Justice Conchita Carpio-Morales pointed out that Parc's order is not a law, therefore Asuncion's argument that it is a violation of the non-impairment law does not hold water.

Associate Justice Roberto Abad pointed out that contrary to Asuncion's claim, the HLI has yet to comply with the conditions provided under Section 31 of the Carp Law. In fact, the HLI has not yet been awarded a certificate of compliance by Parc.

He pointed out that the government gave up its right over Hacienda Luisita land by not placing it under the Carp coverage because of the SDO, which the farmers themselves concurred in.

"The reason the government gave up its right to place it under Carp is because this option was taken. And the Parc must be satisfied that the shares under the law must be so distributed before it can issue a certificate of compliance," Abad said.

"Everything is still administrative because you were not yet issued a certificate of compliance, meaning you don't have to go to the court of law," said Justice Lucas Bersamin.

Velasco and Morales likewise criticized HLI's mode of using as basis in computing the shares of stocks of farmers the number of days that they worked in the plantation, while Justice Jose Perez said the agrarian reform law does not provide for a stock option but only the distribution of land to farmer beneficiaries.

"Your SDO agreement is unique because the farmers will get share if they will work. It will be dependent on the work to be performed...," said Velasco.

Velasco and Perez likewise said the compromise agreement that HLI signed with farmers last August 6 is hinged on the Court's approval of the SDO.

"The court looks at compromise agreement as the most acceptable and expeditious way of settling dispute, but it would still depend on a finding that the SDOA is not unconstitutional or contrary to any existing law," Velasco added.

Perez noted that the compromise agreement "assumes that the SDO is valid," which is in line with the HLI's claim that Parc does not have authority to revoke it.

"I see the point of telling us that at this point the SDO is already beyond question so that the compromise agreement proceeds on the assumption that the SDO is valid, which is the issue before us," he pointed out.

"When you submitted the compromise agreement, does that not open the SDO issue before us? In asking our approval for the compromise agreement which is based on the SDO, does that give us the authority to look into the SDO also?" Perez added.

Last week, the HLI submitted to the SC the compromise deal in which the farm worker-beneficiaries were given the option to stay with the SDO or choose productive agricultural lands that will be given to them for free.

The HLI reported to the court that more than 70 percent or 7,441 of the 10,502 farmer-beneficiaries signed the agreement. Of this number, 7,302 or 98.13 percent voted for SDO while 139 or 1.88 percent voted for land distribution, it added.

As the SC was not able to finish hearing the oral arguments, it ordered that the hearing be resumed on Tuesday, August 24.

Only 12 justices were present during the hearing of oral arguments, including newly-appointed Justice Ma. Lourdes Aranal-Sereno. Senior Associate Justice Antonio Carpio, and Justices Eduardo Nachura and Arturo Brion were on leave. (JCV/Sunnex)