The Department of Justice should junk the Joint Venture Agreement (JVA) between the Bureau of Corrections (BuCor) and the Tagum Agricultural Development Co. (Tadeco) for violating the 1987 Constitution, the Commission on Audit (CoA) said on Wednesday.
This was stated in CoA’s Audit Observation Memorandum (AOM) No. 2017-013 dated April 25, 2017 that was submitted to BuCor Director General Benjamin de los Santos.
The JVA between BuCor and Tadeco owned by the family of Rep. Antonio Floirendo Jr. of Davao del Norte provides that Tadeco is obliged to pay BuCor P26.5 million a year or P5,000 for 5,308 hectares of Davao Prison and Penal Farm land annually.
Based on the CoA findings led by the team of Josefina Gonzales and Flordeliza Ares, the BuCor-Tadeco deal violated Section 3, Article 12 of the 1987 Constitution, which provides that “alienable lands of the public domain shall be limited to agricultural lands… and private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area…”
This is because the land leased by Tadeco covers 5,308.36 hectares of the Davao Prison and Penal Farm (DPPF) when the Joint Venture Agreement between BuCor and Tadeco was extended for another 25 years on May 21, 2003.
The DPPF in Panabo City, Davao del Norte has a total land area of 30,000 hectares, with a prison reservation of 8,000 hectares.
“What is obvious is the excessive holding of agricultural land by Tadeco, which under the May 21, 2003 JVA consisted of 5,308.36 hectares. This being so, the JVA is unconstitutional,” the state auditors said.
“We recommend that management take appropriate action for the cancellation of the May 21, 2003 JVA or make representation with Tadeco for the amendment thereof to confirm to provision of Section 3, Article XII of the 1987 Constitution,” the auditors added.
Speaker Pantaleon Alvarez of Davao del Norte earlier filed a graft complaint against his colleague Floirendo over the BuCor-Tadeco deal, with Alvarez saying that such joint venture pact is disadvantageous to the government.
The same CoA team also found out that the BuCor’s deal with Tadeco inked on December 26, 1969 was also in violation of Section 2, Article 12 of the 1935 Constitution because Tadeco was allowed to use 3,000 hectares of the DPPF lands even if the 1935 Charter states that “no private corporation or association may acquire, lease or hold public agricultural lands in excess of 1,024 hectares.”
In addition, the team discovered that Tadeco’s land grew vast and wide over the years even if two different agreements involving the land were inked in 1969 and 2003 while the government’s share of profits was removed in both instances.
The 1969 deal guaranteed BuCor a rental collection of P250 per hectare per year of the 3,000-hectare banana plantation, with it getting a 10 percent share of the profits prior to taxes.
The deal, however, was amended in July 10, 1973—an amendment that deleted the government’s 10 percent share in income.
The amendment was made favorable to Tadeco since its leased area was increased to 1,000 hectares, granting it 4,000 hectares of the DPPF.
By October 1974, the company gained another 500 hectares for grain crops that included rice, corn and sorghum. It scored another 500 hectares five months later, making Tadeco’s land coverage 5,000 hectares.
A profit-sharing clause was provided for in 1974 at P0.003 to P0.018 per kilo based on the level of production for the production of grains but it was only in 1979 that the rental due per hectare was increased from P250 to P275.
The increase in rental fees, however, was insignificant at that point because Tadeco’s leased land was already 5,945 hectares of which 4,850 hectares were planted to bananas and 1,095 hectares planted to grain crops.
LLANESCA T. PANTI