BuCor-Tadeco land deal disadvantageous to gov’t, says DOJ

Workers at the Tadeco banana plantation (Photo from the Tadeco website)

The land deal for the use of 5,308.36 hectares of land in the Davao Penal Colony for the Tagum Agricultural Development Co., (Tadeco) was found to be was found to be disadvantageous to government, a Department of Justice (DOJ) fact-finding committee told House Speaker Pantaleon Alvarez.

The banana firm is owned by the family of Davao Del Norte Rep. Antonio “Tonyboy” Floirendo Jr.

In its letter dated April 27 and sent to the office of Alvarez, Justice Undersecretary Raymund Mecate said the preliminary findings of the DOJ fact-finding committee found the joint venture agreement between the Bureau of Corrections (BuCor) and Tadeco “fraught with… infirmities.”

The committee said the agreement coud be “impugned” on the legal ground that it violatesd the Constitution, which only allows 1,000 hectares of public land for lease to a private corporation.

The committeee added that the agreement, which has been constantly renewed since 1969, had never been “subjected to any public auction or bidding,” which violates the Public Land Act (Commonwealth Act 141).

It also said that Tadeco was allowed use of the penal colony from 1969 to 2029 – a total of 60 years – more than the 50 years (25 years renewable for another 25 years) allowable under the Public Land Act.

This means the agreement should expire in 2019, not 2029, “without any more option for renewal,” the DOJ body said.

Aoccrding to the committee, the deal violates the Public Land Act, which states that the leased property should belong to the government after the expiration of the lease, noting that the agreement does not even ensure government control over the land.

The committee noted too that the profit share of BuCor in Tadeco amounted to P44,854,726, or a rate of P8,449.83 per hectare per year, even though the prevailing lease rate in the area is at P10,000 to P18,000 per hectare per year.

“The BuCor-Tadeco joint venture agreement appears to be disadvantageous in terms of per hectare rate,” the committee said.

The DOJ body said the Davao Penal Colony land used for the banana plantation is an “inalienable land of the public domain” and thus a property “outside the commerce of men.”

The existing 2003 joint venture agreement is also not valid because it lacks the community of interest in the business by both parties and a categorical indication of a true and realistic sharing of the profits and losses, according to the committee.

It added that BuCor’s participation in the operation of the banana plantation was “minimal,” noting that the latest joint venture agreement deleted the earlier provision allowing for one BuCor representative in the Tadeco management team.

Moreover, a Commission on Audit (COA) special team found the land deal “unconstitutional” for violating the constitutional limit on leasable area, thus recommending the BuCor to cancel the deal.

In the Audit Observation Memorandum (AOM) No. 2017-013 dated April 25, 2017 submitted to BuCor director general Benjamin De los Santos, the special audit team said the joint venture agreement violated Section 3, Article 12 of the 1987 Constitution, which states that no private corporation or association may acquire, lease, or hold public agricultural lands in excess of 1,024 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 audit team said.

The audit is composed of composed of team leader Josefina Gonzales and supervising auditor Flordeliza Ares.

The DOJ and COA findings followed s filing by Alvarez of a graft complaint at the Office of the Ombudsman against Floirendo for the allegedly disadvantageous contract and conflict of interest.

Alvarez alleged Floirendo had a personal interest in the contract which was entered into in 2003 when the latter was already a member of the House. The Constitution bars members of Congress from entering into contracts with government.

Alvarez filed the graft complaint after his girlfriend Jennifer Vicencio had a spat with Floirendo’s longtime partner Cathy Binag. Admitting his affair, Alvarez denied filing the complaint out of a personal vendetta.

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