‘CoA findings do not apply to Tadeco deal’


Initial findings of the Commission on Audit (CoA) that were partly the bases of the Office of the Solicitor General (OSG) for issuing a legal opinion against the Joint Venture Agreement (JVA) between the Bureau of Corrections (BuCor) and the Davao-based Tagum Agricultural Development Co. (Tadeco) are based on the erroneous application of laws and constitutional provisions, according to Tadeco president and CEO Alex Valoria.

“With all due respect to the CoA and the OSG, the provisions they had cited as bases for calling out the supposed violations committed under the Tadeco-BuCor agreement cannot be applied to this case,” Valoria said in a statement on Friday.

The CoA, for one, identified the contract between BuCor and Tadeco as leasehold and tenancy agreement governed by Republic Act (RA) 1199 when the agreement cannot be classified as such, he added.

“No one would argue that the land where the Davao Penal Colony stands, which is under BuCor, is a government reservation. Thus, it is inalienable land and cannot be the subject of a lease agreement as stated under RA 1199,” Valoria noted.

He clarified that the contract between BuCor and Tadeco is a joint venture agreement (JVA), with the primary purpose of helping the rehabilitation of inmates at the Davao Prison and Penal Farm (DPPF).

“It’s goal of making profits is only secondary to the main goal of inmate rehabilitation,” according to Valoria.
He said BuCor and Tadeco are prohibited under the Public Land Act (Commonwealth Act 141) from entering into a lease arrangement.

“Moreover, Tadeco cannot be identified as a tenant of the BuCor land because it is a juridical entity and not a person capable of performing the actual cultivation of the land which is essential in a leasehold and tenancy agreement,” Valoria said.

He added that under both the 1935 and 1973 Constitutions, no prohibition exists barring the government from entering into joint venture arrangements involving inalienable lands like the DPPF.

“In fact, under the 1987 Philippine Constitution, there is now an express provision allowing joint venture arrangement involving exploration, development and utilization of natural resources. Natural resources include
inalienable public lands like the Davao penal farm,” Valoria said.

He added that another CoA finding based on an erroneous legal interpretation is its claim that the JVA violates the Constitution because the BuCor allowed Tadeco to develop 5,308 hectares of the penal farm, which in excess of the 1,000 hectare limit stated under Section 3, Article XII of the 1987 Constitution.

Under Section 88 of the Public Land Act, the land developed by Tadeco inside the Davao penal farm is considered an “inalienable public land,” thus, the constitutional provision cited by CoA does not apply because it pertains to “alienable lands of the public domain.”

“The 1,000-hectare limit would not apply because the 2003 BuCor-Tadeco agreement is a joint venture agreement and not a lease agreement. As I have pointed out, joint venture agreements for the exploration, development and exploitation of natural resources [are]expressly allowed under the 1987 Constitution,” Valoria said.

BuCor has recognized Tadeco’s invaluable contributions to its inmates’ rehabilitation program, which was cited in the bureau’s 2013 yearend list of accomplishments.


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