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1,200 farmers withdraw from agribusiness deal with Cojuangco, say joint venture with Danding illegal, oppressive

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Photo Credit: Noel Magan & Jan Macky Ruiz Buencochillo

Some 1,200 peasants who were awarded nearly 5,000 hectares of agricultural landholdings in Negros Occidental via the Comprehensive Agrarian Reform Program (CARP) have withdrawn from a joint agribusiness venture with San Miguel Corp. chairman Eduardo “Danding” Cojuangco Jr., saying the 19-year-old deal did nothing but  “made them slaves in their own land.”

“Sa papel, kami ang may-ari ng aming lupang sinasaka. Pero ang kontrol at kita ng lupa ay nasa kamay pa rin ni Cojuangco. Walang totoong repormang agrarayong naganap. Peke ang CARP ni Danding. Hindi totoo ang sinabi ni dating Presidente Erap na si Cojuangco ang godfather of land reform,” said Noel Magan, president of ECJ CLOA Holders’ Association representing the 1,200 farmers, who are members of the national peasant federation Task Force Mapalad.

Magan is referring to the 1998 declaration of Cojuangco that he would distribute to his farmworkers his 12 haciendas worth P1.5 billion for a token fee of P1 per hectare. The said commercial farms planted to mango, durian, pili, banana, and sugarcane cover 4,661 hectares located in the cities of Bago and La Carlota and the towns of La Castellana, Isabela, Hinigaran, Murcia, San Enrique, Himamaylan, and Pontevedra. 

Cojuangco’s supposed benevolence earned him praise from then President Joseph Estrada, who called his political ally the “godfather of land reform.” This, despite the fact that the 12 agricultural estates remained under sequestration pending determination by the anti-graft court on whether Cojuangco indeed owns the haciendas or the properties are part of the ill-gotten wealth allegedly amassed by the late President Ferdinand Marcos, his relatives, and/or associates.

After the supposed land distribution, the haciendas, which were under collective certificates of land ownership awards (CLOA), were then placed under a joint venture scheme representing the farmworkers’ 30-percent equity in the agribusiness deal.

Meanwhile, Cojuangco and other investors contributed capital to the enterprise representing 70 percent of the ownership interest of the South Negros Joint Venture Corporation (SNJVC). Part of the agreement under the venture is that the farmers/landowners will also become SNJVC’s regular workers.

‘Declare the joint venture illegal, unconstitutional’

Last Wednesday, 45 of the 1,200 farmworkers trooped to the Department of Agrarian Reform Central Office in Quezon City to file a petition for withdrawal from the Cojuangco-controlled SNJVC. Camped at the DAR lobby, the farmworkers are now urging DAR Secretary Rafael Mariano to declare the venture as illegal and unconstitutional and immediately distribute and subdivide the 12 haciendas among the farmworkers.

“Nanawagan kami kay Ka Paeng na kaagad wakasan ang pang-aalipin sa amin ni Cojuangco at ang pagmamani-obra n’ya sa CARP para manatili ang kontrol ng mga ganid na asendero sa mga lupang matagal na sanang naging solusyon sa kahirapan naming mga magsasaka,” said Magan.

Meanwhile, TFM chief counsel Christian Monsod said “it defies logic to think that the farmers who signed this so-called joint venture agreement were doing so of their free will.”

“Here are lowly farmers who finally get their own little piece of land, who then immediately give up their land to the total control of an arrangement where they own only 30 percent of the equity and to which they are bound for forty years?”  said Monsod, who is also chairperson of the non-government Philippine Agrarian Reform Foundation for Unity and National Development

“Did they have a choice when the one asking them to sign is a wealthy and powerful politician with close ties to the President who praised him publicly for the project and they are told that they will get benefits that are more than their life of subsistence?” added Monsod, former chair of the Commission on Elections.

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Basis for withdrawal

In their petition addressed to Mariano, the farmworkers enumerated five major reasons for withdrawing from SNJVC and explained why the joint venture is both illegal and unconstitutional.

1) Contrary to the promise made by Cojuangco’s camp that farmworkers would become millionaires via the joint venture, the 19-year-old SNJVC failed to uplift their lives as they only receive a yearly dividend/profit sharing of P10,000 or P833 monthly. This is contrary to the lifestyle of those employed by the SNJVC management, who can afford to have air-conditioned houses and expensive vehicles such as Toyota Hilux and Chevrolet Colorado.

2) Under the agribusiness deal, the farmworkers/landowners don’t have security of tenure. Most of them have recently been terminated from work by the SNJVC management.

3) The joint venture agreement is a trap because under the SNJVC by-laws, farmworkers/landowners don’t have the right to withdraw from the deal. This is contrary to DAR Administrative Order No. 2 of 1999, which serves as the guideline and legal basis for setting up joint venture schemes under the CARP.

Section 11 of AO 2 states that, “Contracts for joint economic enterprises shall provide for the grounds and the procedures whereby a party may withdraw from the agreement. In general, a party may withdraw in case a serious breach or failure by the other party to comply with the terms thereof.”

Among the goals of joint venture schemes, according to AO 2 are to “lift the economic status of the (CARP) beneficiaries,” enable them to full benefits of agrarian reform” and “ensure security of tenure and security of income of participating beneficiaries.”

Magan said the said goals stated in the AO were clearly violated by the SNJVC and that the order states that farmworkers/CARP beneficiaries who decide to withdraw from an unjust joint venture have the right “to operate the farm themselves or petition the DAR for subdivision if the land is under collective CLOA.”

4) Cojuangco has monopoly over SNJVC’s decisions as well as the joint venture’s operations because he, his companies, associates and subordinates control 70 percent of the enterprise.

It is stated in the SNJVC’s by-laws that the firm’s laws and guidelines may only “be amended or repealed by the affirmative vote of at least a majority of the Board of Directors and of the stockholders representing a majority of the outstanding capital stock at any stockholders’ meeting called for that purpose.”   (SEE ATTACHED LIST OF SNJVC’s STOCKHOLDERS BASED ON THE COMPANY’S GENERAL INFORMATION SHEET SUBMITTED TO THE SECURITIES AND EXCHANGE COMMISSION ON MAY 25, 2015. THE LIST SHOWS COJUANGCO’S MONOPOLY OF THE JOINT VENTURE)

5) SNJVC is illegal and unconstitutional because it violates the 1987 Charter, CARP Laws, and the Civil Code.

Section 4, Article XIII, Social Justice and Human Rights provision of the Constitution states that:

“The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farmworkerswho are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof.”

Chapter 1, Section 2 ng Republic Act 6657 (CARP Law) at Republic Act 9700 (CARPER Law) states that:

“It is the policy of the State to pursue a Comprehensive Agrarian Reform Program (CARP). The welfare of the landless farmers and farmworkers will receive the highest consideration to promote social justice and to move the nation toward sound rural development and industrialization, and the establishment of owner cultivatorship of economic-size farms as the basis of Philippine agriculture.”

“To this end, a more equitable distribution and ownership of land, with due regard to the rights of landowners to just compensation and to the ecological needs of the nation, shall be undertaken to provide farmers and farmworkers with the opportunity to enhance their dignity and improve the quality of their lives through greater productivity of agricultural lands.”

Meanwhile, Article 1409, Chapter 9 of the Civil Code of the Philippines states that:

“The following contracts are inexistent and void from the beginning:

(1) Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy.”

SC says control must be in the hands of farmers

According to Monsod, agrarian reform as a “social justice program is not about giving the farmers crumbs from the table; it is about giving them their place on the table.”

“It is about their liberation from poverty and from social exclusion. And when a transition period is called for while building their capacity, short-term leaseback or other arrangements are allowed. But 19 years and 30-percent equity?  Where in that onerous arrangement is the “farmer control” principle of the land enunciated in the Hacienda Luisita decision of the Supreme Court?” said Monsod, a member of the 1986 Constitutional Commission that drafted the 1987 Charter.

In its April 24, 2012 ruling on the Hacienda Luisita case, which was not directly distributed to CARP beneficiaries but only made them stockholders of a company managing the Tarlac hacienda, the Supreme Court stressed that agrarian reform beneficiaries of the Cojuangco-controlled 6,453-hectare landholding “will never have control over” Luisita “for as long as they remain as stockholders of HLI (Hacienda Luisita Inc.).”

In its decision, the high tribunal stressed that the Charter and agrarian reform laws mandate that farmers must have “direct” control over their CARP-awarded landholdings.

“The policy on agrarian reform is that control over the agricultural land must always be in the hands of the farmers. Then it falls on the shoulders of DAR and PARC (Presidential Agrarian Reform Council) to see to it the farmers should always own majority of the common shares entitled to elect the members of the board of directors to ensure that the farmers will have a clear majority in the board,” the high court said.

Monsod added that social justice was rightly called by Cecilia Munoz-Palma, the head of the Constitutional Commission, “as the heart of the new Constitution.”

“It is only right that this one-sided and oppressive agreement be declared null and void as a violation of the agrarian reform provision of that Constitution and a perverse implementation of what was supposed to be a landmark program of the government for the poor,” said Monsod.

WHO CONTROLS THE JOINT VENTURE?

Stockholders of Southern Negros Joint Venture Corp. (SNJVC) based on the company’s General Information Sheet Received by the SEC on May 25, 2015

 

Name of stockholder Paid-up capital in pesos % of paid-up capital to total SNJVC paid-up capital of P1.023 billion Info about the stockholder
1. Philippine Countryside Holdings, Inc. (PCHI) 477,468,300.00 46.67 Among PCHI’s major stockholders are Southern Islands Holdings Corporation and Gingoog Holdings Corp. Southern Islands,  is 100 percent owned by Eduardo Cojuangco Jr. & Sons Enterprises, Inc. Gingoog is is 99.89 percent owned by Southern Islands
2. ECJ Farmworkers Agrarian Reform Beneficiaries Multipurpose Cooperative 304,876,996.00 29.8 Composed of at least 1,756 agrarian reform beneficiaries/CLOA holders in 12 haciendas
3. Kaiñaman Farms, Inc. 123,106,799.00 12.03 A total of 35.69 percent (or P3.569 million) of Kaiñaman’s P10-million paid-up capital iscontrolled by Eduardo M. Cojuangco Jr.

 

4. Hacienda Fe, Inc. 82,071,199.00 8.02 A total of 64.5 percent of Hacienda Fe’s subscribed and paid up capital arecontrolled by Eduardo Cojuangco Jr. & Sons Enterprises, Inc.
5. S & A Agricultural Corp. 30,776,699.00 3.01 S & A’s major stockholder is Kaiñaman Farms, also controlled by Cojuangco.

 

6. Eduardo Cojuangco Jr. & Sons Enterprises. Inc. 4,699,995.00 0.46 Firm is controlled by Eduardo M. Cojuangco Jr. and his wife Gretchen O. Cojuangco
7. Eduardo M. Cojuangco 1.00 0.000000097
8. Felicismo B. Billones 1.00 0.000000097 president, CEO, and minor shareholder of SNJVC; treasurer and chief financial officer, and stockholder ofCojuangco-controlledHacienda Fe, Inc.; treasurer, chief financial officer, and stockholder of Kaiñaman Farms, also controlled by Cojuangco
9. Virgilio S. Jacinto 1.00 0.000000097 Senior vice president, secretary and general counsel of San Miguel Corp., chaired by Cojuangco. He is also director and stockholder of SNJVC and corporate secretary and stockholder of the Cojuangco-controlled Hacienda Fe, Inc.

 

 

10. Jesse N. Macias 1.00 0.000000097 SNJVC’s general manager and stockholder
11. Max M. Imbang 1.00 0.000000097 SNJVC’s assistant corporate secretary and stockholder and also among the directors and stockholders of theCojuangco-controlledKaiñaman Farms. Imbang is also director and stockholder of Southern Islands Holdings Corporation (SIHC). The firm is among the major stockholders of Philippine Countryside Holdings, Inc (PCHI), which controls 47 percent of SNJVC’s paid-up capital. SIHC is 100 percent owned by Eduardo Cojuangco Jr. & Sons Enterprises, Inc
12. Gabriel L. Villareal 1.00 0.000000097 SNJVC’s corporatesecretary and stockholder. He is also president, CEO, and stockholder ofCojuangco-controlledHacienda Fe, Inc.;corporate secretary and stockholder of Kaiñaman Farms, also controlled by Cojuangco. He is likewise the president and CEO of S & A Agricultural Corp, whose major stockholder is Kaiñaman Farms, which is controlled by Cojuangco
13. Gregorio A. Bungcasan 1.00 0.000000097 Resident manager and among the stockholders of SNJVC
14. John Alejo A. Zarate 1.00 0.000000097 SNJVC’s treasurer and chief financial officer and also among the firm’s stockholders. He is also among the directors and stockholders of Southern Islands Holdings Corp. and Gingoog Holdings Corp. Southern Islands  is 100 percent owned by Eduardo Cojuangco Jr. & Sons Enterprises, Inc.Gingoog is is 99.89 percent owned by Southern Islands
15. Jaime G. Allawan 1.00 0.000000097
16. Freddie S. Sausa 1.00 0.000000097
17. Edgar O. dela Rama 1.00 0.000000097
18. Elmer D. Durana 1.00 0.000000097

 

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