The Tagum Agricultural Development Co., Inc. (Tadeco) on Monday said it welcomes the call for a review of its joint venture agreement with the government company reiterating that it has always been transparent in its dealings with government.
The joint venture between the government and Tadeco covers 5,308 hectares of the Davao Prison and Penal Farm reservation. With the agreement, about 3,500 inmates work at the Tadeco-managed farm every year.
Average daily deployment, under the Inmates Farm Training and Exposure Program, is about 1,000 workers.
In a statement, Tadeco President Alex Valoria said that since 2012, the contract has been the subject of three hearings by the House of Representatives committee on agrarian reform.
“Our relationship with the Bureau of Corrections (Bucor) is a joint venture, not a lease agreement,” Valoria clarified.
He said the joint venture has resulted in financial benefits for Bucor in the amount of some P1.642 billion until 2016, about P15.432 million in fixed program assistance during the period, P3.831 million in infrastructure assistance, and P2.205 million in other forms of assistance.
The first congressional review of the contract in 2012 stated that the joint venture was in order and that it was important to the government, as the company “contributes to the Department of Justice and/Bucor and provides training and income to the inmates.”
Veloria also said that employment generation under the joint venture is on a three person per two hectare ratio, thus, about 18,580 jobs have been created for the inmates and other workers resulting in about P3.1 billion in annual salaries.
The call for a review of the government’s joint venture agreement with Tadeco stemmed from a recent news report that said the agreement was more beneficial to Tadeco than to Bucor.
Valoria said figures in the news report were wrong because it only pertained to the 2003 guaranteed income for the inmates/farm workers and excluded profit sharing and other benefits.
He added that aside from the figures mentioned, there are other benefits that go to the government that are not even included in the contract.
Valoria, however, explained that the figures should have included the stipend and support program, guaranteed production share, profit share, inmates farm and training support, training subsidy, land watch patrol and corporate social responsibility.
“We are never remiss of our obligations both to the government and the workers,” he said.
Veloria said that in 2014, company documents showed that the government received P32.969 million for guaranteed production share and it got P8.576 million for profit share. Last year, the guaranteed production share of the government ballooned to P35.327 million, while profit share went up to P9.527 million.
Aside from congressional hearings, the executive department has also conducted its own reviews of the contract.
Valoria pointed out that even before the call for a review was made, Tadeco and the government, represented by Bucor, were scheduled to hold their quarterly meeting next month. This joint venture management committee that meets every quarter, oversees implementation of the agreement and is tasked with addressing concerns.
Aside from the quarterly meeting, Veloria added that company and government officials also meet every month to tackle day-to-day issues.
Even during the past administrations, the company has always been open to any call for adjustments in the benefits that the government derives from the joint venture as well as the benefits that go to the community and the inmates, Valoria said.
In the past when government asked for adjustments, the company readily accommodated them, noting that the times are changing, although the contract provides for an escalation clause, he said.
As an example, a year after the 2003 renewal of the joint venture agreement, the values of guaranteed income and profit sharing were increased as indicated in the amendment to the joint venture agreement dated November 27, 2004.