Agriculture Government News Analysis

When lawyers go nuts

Among the campaign promises made by Rodrigo Duterte as he launched his bid for the Philippine presidency was to yank away official red tape – fetters that have traditionally choked enterprise and efficiency, and which have been regularly used to mask corruption and hamper attempts to address it. Red tape, in its many forms right across the public sector in the Philippines, has probably been the economy’s single biggest enemy. And it still is. Extremely debilitating, it’s complex, very deep-rooted and in some areas its stranglehold is unshakeable.

Another Duterte promise – more individual – was to pay back PHP73 billion in levies to the country’s coconut farmers. This levy, which dates back to 1973, was intended to help the farmers and their industry. For the past 43 year, however, that money – their money – has been ensnared in a maze of red tape and legal obfuscation of labyrinthine proportions.

Duterte promised that the funds would be repaid within his first 100 days in office; the reality is they are no nearer being paid now than when he made that promise. That’s not because he hasn’t tried; he has – so has Agriculture Secretary, Manny Piñol; so has Finance Secretary, Carlos Dominguez. But what they hadn’t bargained for was just how tight the legal red tape had been tied.

The fact is, the Coco Levy Fund cannot be released because it’s the subject of a temporary restraining order (TRO) issued by the Supreme Court. This ties the government’s hands; the TRO specifically prohibits the government from touching the fund. It has no authority to release or disburse the money. Now, it seems, it will require an act of Congress to release it. So more political wrangling; more delays; more fees for the lawyers.

We’d like to know how the Supreme Court defines the word temporary; this was issued in June 2012. We’d also like to know which law prevents the return of funds to their rightful owners – though again, thanks to the legal jumble it’s not entirely clear who the rightful owners are. Is it the farmers – some 3.5 million of them from some 21,000 coconut-growing districts nationwide? Or is it the government, as the Supreme Court ruled back in 2012? Ownership arguments have dogged claims and counter claims throughout decades of litigation.

Last year, former president Benigno “Noynoy” Aquino, through two executive orders tried to issue administrative guidelines for the fund’s assets and their privatisation, as well as instruct the transfer of those assets to the government. Naturally, that was halted dead in its tracks by the court.

And where is this money? That’s a little unclear also, but according to the Presidential Commission on Good Government – an oxymoronic title, under the circumstances – coco-levy assets are worth PHP83 billion, of which PHP73 billion is in cash and PHP10 billion is in the form of shares in the United Coconut Planters Bank and stock in the Oil Mills Group belonging to the Coconut Industry Investment Fund beneficiaries. Beneficiaries? Who are they? Evidently not the poor coconut farmers and their families.

The plot thickens then. Apparently – or so it’s alleged – the Coco Levy Fund was used by Eduardo Cojuangco, Aquino’s uncle, to acquire a number of businesses; among them, United Coconut Planters Bank and San Miguel Corporation. Prior to becoming a cash asset, the PHP73 million was held in the form of San Mig shares; some 24% of total shares. If that’s true, that Cojuangco was able to use the fund as his own personal piggy bank then, what could possibly be standing in the way of it being used for farmers and their families and the coconut lands they work now? What convoluted legal argument requires these funds to sit in a bank account somewhere and not be used for their originally intended purpose?

For the coconut farmers this is an extremely sensitive issue; many have died over the past four decades never having received any benefit from the levy. There’s no doubt that the farmers need these funds; there’s also no doubt that Duterte and Piñol want this money released so they can disburse it. This is an extremely tangled mess in which, if you go back though the history, the only solution has been to have yet another court case. Generations of lawyers have drawn fees from working on a myriad of cases relating to this. Please, enough.

The Coco Levy Fund is one of the Philippines longest-running scandals and it’s certainly time it was finally cleaned up. If the expedient way – if anything can be expedient after 40 years – is to enact legislation to extract all this from the courts, then that needs to be done; and quickly. This is a running sore which requires immediate treatment. But it brings us to another point. How many other cases is the Philippine Supreme Court sitting on or shuffling back in the queue for attention?

We can think of one right now; the file concerning the alleged vote-rigging in the May election – Senator Ferdinand “Bongbong” Marcos Jr’s challenge to the legitimacy of the vice-presidency of Leni Robredo. Surely, which ever way this case goes, it’s in the public interest to deal with it expeditiously. This is about the integrity of the country’s election system; it’s about protecting the political franchise; it’s about transparency. But it’s also about the appointment of the second-most powerful person in the country. And if that isn’t a priority, Heavens know what is.

The broader problem is the signal that delays like these send to the overseas investment community. One thing investors need guaranteed is that they can get swift redress under the law; that their grievance will not be tied up in years of litigation as has happened in the past. Few things are guaranteed to deter foreign direct investment more. So, the question they ask is: if settling something as vital as the legitimacy of the country’s vice president is such a low priority for the courts, what chance would they have with any dispute they brought to court?

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