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By David L. Llorito, Research Head
Second of three parts
Because of technical problems, much of the
second installment of this special report was omitted yesterday. We
are reprinting the installment in its entirety today—The editors
FOR Efren M. Villasenor, president of the
Pambansang Koalisyon ng mga Magsasaka sa Niyugan, the toll-crushing
agreement (TCA) entered into by Liga Magniniyog, a rival peasant
organization, with Legazpi Oil Co. was nothing but a scam.
For Hili Morandarte, president of Liga Magniniyog,
it was an experiment in “empowerment” that was killed by
intrigues, conspiracy, and envy by people who never wanted the
project to succeed.
“There was a concerted effort to bring down
the operations of Liga so that coconut farmers will fail to
effectively manage the coconut levy-funded assets,” says
Morandarte in his 2002 year-end report.
Liga Magniniyog was registered with the
Securities and Commission (SEC) on July 3, 2002, as a nonstock,
nonprofit organization. Among its objectives are “to unify and
represent the interests of small coconut farmers . . .” and “. .
. initiate self-reliant projects and investments” for the coconut
farmers. Its incorporators represent a who’s who in the militant
farming sector.
Morandarte told The Manila Times that the TCA
was part of Liga’s goal of improving the lives of poor coconut
farmers. He thinks poor farmers will never have better lives so long
as they sell cheap copra. The only way to go is by selling high
value-added products like coconut oil and other byproducts like
copra cake. The TCA provided that opportunity.
Thus, Morandarte laments that some people—who
include his former friends and allies like Romeo Royandoyan,
executive director of the Philippine Peasant Institute, and
Villasenor, a fellow peasant leader, and some officials of the
Coconut Industry Investment Fund (CIIF)—destroyed Liga without
appreciating its hard work.
Morandarte said the TCA benefited farmers from
Bicol and the Visayas through increased prices resulting from the
aggressive copra buying strategy of traders accredited to Liga.
Through the commissions it got from the copra toll fees, Liga was
also able to hold a “national coconut farmers’ summit,” at
which 300 participants from 65 coconut-producing provinces attended
the two-day conference in Cebu in December 2002.
“Now, because of the suspension of Liga’s
operations, prices of copra have fallen,” he said.
On January 27, 2003, Morandarte and his top Liga
officials filed a complaint with the Presidential Commission on Good
Government (PCGG) regarding the January 23 termination of the TCA
and the memorandum of agreement. The complaint also asked for the
resumption of Liga’s business with Legoil. The PCGG has not acted
on Liga’s petition until now. But Morandarte and his executive
committee seem to have given up hope of resuming the TCA.
“Maibalik man ang TCA, pero sino pang ang
maniniwala sa amin ngayon? [PCGG may order the resumption of the TCA,
but who will put their trust in us now?]” laments Morandarte.
Liga against the world
Morandarte blames TCA’s termination on
Royandoyan, who he said has spread “black propaganda” through
text messaging and “poison letters” since late last year.
On January 21, 2002, Royandoyan released an open
letter accusing Morandarte and his executive committee of
“conflict of interest,” executing the TCA unsupported by a
resolution from the national council, and of diverting Liga’s
commissions to another private company owned by Morandarte and his
partner, Al Ignatius Lopez. Lopez was a former deputy administrator
of the Philippine Coconut Authority and a former youth
representative in the Eight Congress from 1987 to 1992.
Royandoyan, Morandarte said, is an NGO leader
whose interest clashes with “people’s organizations” like Liga.
He said Royandoyan wanted them to confine their activities to copra
trading and not to processing. He believes Royandoyan does not want
Liga to mature and enjoy real “empowerment,” because this would
deprive NGOs like the Philippine Peasant Institute the opportunities
to generate money from projects like “capability-building.”
Eduardo Endayan, a member of Liga’s national
council, doesn’t want this relationship with NGOs anymore. “For
a long time we have been doing capability-building programs with
them, yet people’s organizations like us are not really
empowered,” he complains.
Morandarte and Endayan also suspect that
maneuvers from some copra traders and private millers must have also
pressured the Coconut Industry Investment Fund to revoke the TCA.
Armed with higher potential margins from the TCA, and buttressed by
interest-free cash advances from Legoil, Liga’s accredited private
traders went on buying sprees, thus attracting copra deliveries from
as far as Leyte. With no copra to buy, many traders outside the TCA
and small coconut oil millers from Lucena raised a howl.
Liga in the sinking sand
What appears to be doing the real damage against
Liga, however, is the group’s continued failure to answer
effectively the issues raised against it.
“The MOA [and the TCA] were submitted to the
CIIF Board and they are aware of it,” explained Morandarte. “Mr.
Antonio Ng [Legoil president] and his legal advisers from CIIF
should [have known earlier] if there was any conflict of
interest.”
Yet this answer does not change the facts:
Morandarte is a director of Legoil, the president of Liga Magniniyog
and a partner of Coco Invest Co. He has entered into and signed a
MOA and has also signed contracts and transactions with all the
three agencies in which he is a primary officer.
Morandarte denies he had no prior board approval
from his group before he entered into the MOA and the TCA. He gave
The Times several copies of excerpts from minutes of supposed
meetings as proofs that he and his officers in Liga are authorized
to carry out the MOA and TCA.
Analysis of these documents, however, raises
more questions. For instance, excerpts from minutes of an August 18,
2002, meeting only gave Morandarte a “go signal to negotiate . . .
for a possible toll-crushing agreement.” He was required to report
the results to the national council; no clause authorized him to
sign the MOA and the TCA.
Morandarte also denied that the diversion of
Liga’s commission from the TCA to Coco Invest, which turned out to
be a partnership between him and Al Lopez, is irregular. “It’s a
matter of corporate strategy,” he stresses, explaining that he and
Lopez are just acting as trustees for Liga.
Yet he could not provide any council resolution
legally making him and trustees or making Coco Invest the payee in
all the checks or funds received from Legoil in the toll fee
payment.
The only document Morandarte has in hand is an
excerpt from minutes of the meeting on October 19, 2002, that
“small coconut farmers are not capable of supplying the needed
copra volume for the legal milling capacity . . . ”; and “that
the setting up of a business development office for the said project
was suggested/discussed.”
Morandarte explained to The Times that the
creation of Coco Invest as the “business development office” of
Liga Magniniyog is necessary because Liga is a nonstock, nonprofit
and a VAT-exempt organization and so it is not allowed to engage in
commercial transactions. Yet Liga did receive cash advances of P1
million for preoperational expenses from Legoil. It’s only in
subsequent transactions when Legoil started diverting Liga’s
commissions from toll fees to Coco Invest.
One may wonder: Why should Liga move to divert
the money earned from the TCA to a private company? One possible
explanation is that funds placed in a private account could be
easily withdrawn while the process for a nonstock, nonprofit
organization is cumbersome. Disbursement of funds generated by
nonstock, nonprofit firms is governed by board resolutions defining
the percentage or amount for operations and maintenance, asset
buildup, and programs and projects.
In fact, Article 8 of Liga’s articles of
incorporation says, “No part of the income which the association
may obtain as an incident to its operation shall be distributed as
dividends to its members, trustees, or officers, . . .”
By transferring Liga’s income to Coco Invest,
Morandarte and company may have violated Bureau of Internal Revenue
Regulations 13-98, which, among others, prohibits the diversion of
income of a nonstock, nonprofit organization to “any member of its
Board of Trustees, founder/s or principal officers or any member of
their families to any corporation controlled directly or indirectly
by the aforesaid individuals or their families . . . ”
No proper audit
One of the most serious charges hurled against
Morandarte and company is they did not properly account for the
P7.1-million profits generated by the TCA. The best thing they could
have done was commission an independent auditing firm and release
the official results. So far they have failed to do so.
Morandarte told The Times that he used some of
the money to buy a Ford Ranger 4x4 pickup for the use of his
consultant, Willie Chua, a copra trader and former employee of the
old Unicom, who was advising them on copra trading. Some funds were
also used to buy a Mitsubishi Adventure (Asian utility vehicle) for
Morandarte’s use as president of Liga. Some of the money was also
used to buy office equipment, and others for operational expenses.
The information turned out also to be inaccurate
because bank records show the pickup that was in the name of Al
Ignatius Lopez, Morandarte’s partner in Coco Invest, whom he
appointed as spokesman for Liga. It would have been inappropriate
for Liga to buy the pickup for Chua, because he earns a
consultant’s fee equivalent to 10 percent of all of Liga’s
incomes. 
Continued tomorrow
Part III will discuss how the toll crushing
agreement between Liga Magniniyog and Legoil could have cleverly
been designed for purposes other than poor coconut farmers’
welfare.
Part 1 | Conclusion
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