March 23, 2004
DAR OPINION NO. 10-04
MEMORANDUM
TO : Director Jeffrey M. Galan
PARC Secretariat
SUBJECT : Request for Legal Opinion Re: Negros Occidental PARCCOM Resolution No. 19, Series of 2003
This refers to your memorandum dated 05 January 2004, requesting for opinion on the abovementioned PARCCOM Resolution requesting the Presidential Agrarian Reform Council (PARC) to cancel the implementation of the Stock Distribution Option (SDO) scheme of Wuthrich Hermanos in Calatrava, Negros Occidental, specifically on whether or not the PARC is the appropriate forum to resolve said issue.
You stated in your memorandum that you received similar protests/petitions from concerned groups of farmworkers requesting for the cancellation of the SDO plans such as the Hacienta Luisita in Tarlac and the Negros Industrial By-Products Inc. in Negros Occidental.
Pertinent to the abovecited issue are the following provisions of DAR Administrative Order No. 10, series of 1988 (Guidelines and Procedures for Corporate Landowners Desiring to Avail Themselves of the Stock Distribution Plan Under Sec. 31 of R.A. 6657 and Superceding Department of Agrarian Reform Administrative Order No. 4-87):
A. Section 1 (b)
"1b) Qualified Beneficiaries — The qualified beneficiaries in the stock distribution plan are all those identified as beneficiaries of land transfer enumerated under Sec. 22 of RA 6657. ACETID
The stock distribution plan shall be agreed upon by both the corporate landowner-applicant and the qualified beneficiaries and subject to approval by PARC. DAR shall monitor and device a system of ensuring the voluntary acceptance by the beneficiaries of this plan for stock distribution. The acceptance of the stock distribution plan by the majority of all the qualified beneficiaries shall be binding upon all the said qualified beneficiaries within the applicant-corporation. (emphasis supplied)
B. Section 11 Implementation — Monitoring of Plan — The approved stock distribution plan shall be implemented within three (3) months from receipt by the corporate landowner-applicant of the approval thereof by the PARC and the transfer of the shares of stock in the names of the qualified beneficiaries shall be recorded in the stock and transfer books and submitted to the Securities and Exchange Commission (SEC) within sixty (60) days from the said implementation of the stock distribution plan.
Upon completion, the corporate landowner-applicant shall be issued a Certificate of Compliance. The Secretary of Agrarian Reform or his designated representatives shall strictly monitor the implementation to determine whether or not there has been compliance with the approved stock distribution plan as well as the requirements of the CARP. For this purpose, the corporate landowner-applicant shall make available its premises for ocular inspection, its personnel for interview, and its records for examination at normal business hours." (emphasis supplied)
C. Section 12
"Section 12. Revocation of Certificate of Compliance — Non-compliance with any of the requirements of Sec. 31 of R.A. No 6657, as implemented by this Implementing Guidelines shall be grounds for the revocation of the Certificate of Compliance issued to the corporate landowner-applicant." (emphasis supplied)
Pursuant to the above-quoted provisions of said DAR guideline, the SDO plan shall be agreed upon by the corporate landowner-applicant and the qualified beneficiaries subject to the approval of the PARC. If PARC has the authority to approve the SDO plan, then it also has the power to review, monitor and cancel the implementation of said SDO scheme. The power to approve inherently carries with it the power to revoke or cancel. SHCaDA
Please note that the issue had already been comprehensively addressed in DAR Opinion No. 03, series of 2004, a copy of which is herewith attached.
We hope to have clarified the matter and please be guided accordingly.
(SGD.) RICARDO S. ARLANZA
Undersecretary for Policy, Planning and Legal Affairs Office