Farmers Ask Supreme Court to Restrain Aquino Government from Absolute Ownership of Public Trust Funds
The biggest organization of coconut farmers in the country stated that the recently signed Executive Orders on “the inventory and privatization” (E.O.179) and “the reconveyance and utilization” (E.O. 180) of coco levy assets must be stopped because these orders are immoral, unconstitutional, illegal and anti-farmer. “These twin executive orders, if not stopped or modified, can only lead to a much worse coco-economy of exclusion,” according to Ka Charlie Avila, Executive Director and National spokesperson of CONFED, the Confederation of Coconut Farmers Organizations of the Philippines., Inc.
A little more than a month ago, more than 150 farmer-leaders from all 70 predominantly coconut provinces of the archipelago convened at a Coconut Farmers National Conference in Makati for a “Final Call on the Coco Levy Funds’ Utilization and Ownership.” The Conference was convened by the Confederation of Coconut Farmers’ Organizations, or CONFED, the unified group of coconut farmers’ organizations nationwide that includes the Philippine Association of Small Coconut Farmers’ Organizations (PASCFO), the Pambansang Koalisyon ng mga Samahang Magsasaka at Manggagawa sa Niyugan (PKSMMN), the Coconut Producers’ Federation (COCOFED) and their many allied farmers’ organizations representing all together more than ninety-five percent of the organized coconut farmer sector in the country [cf PCA RMs for confirmation].
When asked why CONFED regards the Aquino orders as immoral, Avila replied: “Because they have no regard for the moral nature of the ownership of the coco levy assets. The precise nature of the ownership of these funds is not absolute ownership but trust ownership. Given their origins and purposes, the funds must be regarded as public trust funds: ‘public,’ indeed, not private, because they were the result of taxation. But equally important is ‘trust’ ownership not absolute ownership because they were levied for certain purposes and could not be disposed of in any which way except for the attainment of those ends or purposes.”
Avila amplified: “The government then may not now just do with the funds as it pleases because the funds do not belong to the general funds. They are special funds. Not even the farmers can claim the funds in an absolute sense of ownership to do with as they please because these funds that came from them are still theirs only for a given purpose. Such is the nature of trust ownership.”
CONFED’s principal multi-sectoral ally in the pursuit of the proper recovery and utilization of the coconut levy funds through the past decade and a half is the Bishops-Ulama-Priests-Pastors-Farmers-Lumad Conference (BUPPFALUC) – an inter-faith group of moral leaders (Catholic, Protestant and Muslim) who helped unify the various organizations and clarify the moral issues by means of dialogues, conferences and symposia nation-wide the past ten years.
The farmers and their moral leaders were understandably quite pleased with the Supreme Court decision rendered on January 24, 2012 that succinctly affirmed the moral view that these funds are “owned by the government to be used only for the benefit of all coconut farmers and for the development of the coconut industry.” [See G.R.Nos.177857-58 and G.R. No.178193 in the dispositive portion.][1] The beneficial and true owners of the coco levy funds are, thus, clearly “all coconut farmers,” and the funds may not be considered private but public, i.e. their “trust owner is the government,” and the purpose of the funds is not general in nature but particular, namely, “the development of the coconut industry.”
In Republic v.COCOFED (COCOFED 2001, 372 SCRA AT 481) the coco levy funds are explicitly described not only as public funds, but as special public funds. In the Phil. Constitution, VI, 29 it clearly states that “all money collected on any tax levied for a special purpose shall be treated as a special fund and paid out for such purpose only.” Only when “the purpose for which a special fund was created has been fulfilled or abandoned” can “the balance, if any, be transferred to the general funds of the Government.” According to CONFED, it cannot be doubted that the purposes of the coco levy funds have not been fulfilled or abandoned. The EO’s should therefore not treat them as general funds for that would be both immoral and unconstitutional.
The Supreme Court in the 2012 decision (663 SCRA at 608) said that there is no doubt that the purpose behind the creation of the coconut levy funds was not simply for the benefit of the coconut farmers but for the entire coconut industry since its improvement would eventually redound to the coconut farmers. Thus, PD Nos. 755, 961, and 1468, which are used a lot by the current EO’s, are unconstitutional not only for the reason that they authorize the distribution of levy funds to private entities but because they provided that the levies shall not be construed by any law to be a special and/or fiduciary fund that shall form part of the general fund of the national government later on. The assailed laws (PD Nos. 755, 961, and 1468) are unconstitutional because they “effectively removed the coconut levy fund away from the cavil of public funds which normally can be paid out only pursuant to an appropriation made by law.” Again, go to the 2012 decision, 603 SCRA at 609, citing Phil. Constitution, VI, 29 – “No money shall be paid out of the Treasury except in pursuance of an appropriation made by law”…etc.etc.
“Or review our very own PKSMNN case, which was promulgated on 10 April 2012,” said CONFED spokesman Avila. E.O. Nos. 312 and 313 signed by then President Estrada were also nullified by the Court because they violated the Phil. Constitution, VI, 9 by deviating from the special purpose of the coco levy funds. In the PKSMNN case, the Court quite solemnly intoned that an E.O. cannot be above a P.D. or an R.A. (a Republic Act). The Aquino government should not be hard-headed. It should not usurp the duties and prerogatives of the legislature unless it first declares itself a revolutionary government.
According to CONFED, it is time to finally have the heart and the mind to understand the demands of truth. The pendulum must stop swinging from absolute private ownership by a few or the many to absolute government ownership of the coco levy public trust funds. “For almost two decades now, we the majority stakeholders, the coconut farmers, have made our thoughts and feelings clear,” CONFED stated. “Only the recognition of the dual ownership of the funds – government as trust owner and all the coconut farmers as true beneficial owners – can guarantee that the funds will be utilized according to its purposes – the benefit of all the coconut farmers and the development of the coconut industry.” The E.O.’s dismally fail in this regard and therefore they must be stopped or modified.
“There are only two ways to approach the present problem,” said Ka Charlie, “the right way or the wrong way. The wrong way is for government to allow or encourage sectors and agencies not even connected with the coconut industry to start posturing to get their hands on the coconut levy funds. The right way to constitute the coconut levy funds and assets more explicitly into a Coconut Industry Trust Fund (CITF), by law, and provide the administrative structure, also by law, that will manage the trust funds and ensure that its use will benefit the coconut industry and the coconut farmers. That structure is proposed to be a new GOCC or Foundation to be called the Philippine Coconut Farmers’ Foundation (PCFF)”
It is right to have an inventory of all coco-levy funded assets and investments but it is wrong for the EO’s to make a mockery of what the Court has just declared public trust funds by rushing to privatize them “pursuant to the national policy on the efficient and transparent privatization of government assets which are unnecessary or inappropriate to maintain (Sec.5, E.O.179).” But who will make such a determination in the case of the coco levy funds unless the farmers themselves, the true beneficial owners participate in such a judgment not in a context of neo-cronyism but in a truly democratic dispensation. Assiduously provide that the farmers themselves elect freely their own representatives to that Foundation.
“Most important of all,” asked CONFED, “since when has government had the right to include trust assets in its privatization program? The privatization hang-up of government via its E.O. 179 is a complete abandonment of its duties as trustee of the coco levy assets and is indubitably contrary to the Supreme Court ruling and the moral philosophy of trust ownership.”
The least that the trustee government can do to be ethical and legal would be to consult its Trustors, the true beneficial owners who are all the coconut farmers. Let it be known in the clearest terms that government cannot legally privatize trust assets without the consent of the Trustors. The Aquino government has the bad habit of making short shrift of constitutional provisions and legal niceties. The coconut farmers of this country must not allow him to do so in the case of the coco levy trust funds.
The Aquino E.O.s are presently characterized by mere tokenism in farmer participation (via some consultations with them urged on the PCA). The farmers are mere objects, not subjects, in the whole process. Much heavier is their accent on finance: the conveyance to or depositing in favor of the Government of the riches of the coco levy funds. What necessarily started out as a reiteration of the Court ruling that all assets shall be used solely and exclusively for the benefit of the coconut farmers and the development of the coconut industry is terribly weakened along the way and rendered anemic because no serious attention was given to the farmers’ own proposals – only a predilection for the so-called government ownership of new-found funds. FINIS
[1] From hereon CONFED is borrowing heavily on the researches done by Maria Christina Capito Raboniza which were published in the Ateneo Law Journal, Vol. 58.