Picking a fight with Speaker Pantaleon Alvarez may literally cost Davao del Norte Rep. Antonio “Tonyboy” Floirendo Jr. and his family a fortune.
A Department of Justice (DOJ) investigation panel and a special team from the Commission on Audit (COA) on Wednesday separately released findings backing Solicitor General Jose Calida’s statement declaring unconstitutional the joint venture agreement (JVA) between the Bureau of Corrections (BuCor) and the country’s biggest banana exporting company owned by the Floirendo family.
In a seven-page letter, Justice Undersecretary Raymund Mecate told Alvarez that the DOJ panel said the agreement between BuCor and Tagum Agricultural Development Co. (Tadeco) was “fraught with (legal) infirmities.”
The JVA has allowed Tadeco to use thousands of hectares of BuCor lands in Davao del Norte province to grow bananas for export since 1969.
No public auction or bidding
The DOJ panel, headed by Chief State Counsel Ricardo Paras III, agreed with the Speaker’s contention that the deal was “disadvantageous” to the government as Tadeco provided BuCor with an annual profit share that was lower than the current lease rate for agricultural lands in the area.
“The BuCor-Tadeco (deal) and its predecessor agreements … were never subjected to any public auction or bidding in violation (of the law),” Mecate said in the letter to Alvarez dated April 27, a copy of which was obtained by the Inquirer on Wednesday.
Noting that the deal was first approved in 1969, Mecate said allowing Tadeco to use the prison lands until 2029 under the JVA, which was renewed in 2003, would violate the constitutional provision limiting such arrangement to 50 years.
“(T)he current agreement for the beneficial use of the land by Tadeco should expire [in] 2019, not 2029, without any more option for renewal,” he added.
A special COA team that looked into the 1969 and 2003 agreements said they covered more than the allowed size of agricultural lands that could be leased to private corporations under the 1935 and the 1987 Constitutions.
Joint venture agreement
The Tadeco banana plantation presently covers 5,308.36 ha of land owned by the Davao Prison and Penal Farm in Panabo City, Davao del Norte, under the 2003 JVA. The area covered was around 3,000 ha under the 1969 deal.
The COA team said the 1935 Constitution allowed a private corporation to use a maximum of 1,024 ha of public land and the 1987 Constitution cut that down to 1,000 ha.
As the DOJ and Calida had cited, the charters also said public agricultural lands could be leased for up to 25 years and may be renewed for a maximum of 25 more—or a total of 50 years. The 50-year limit would be exceeded under the 2003 agreement, the COA team said in a memorandum also dated April 27.
“The contract or agreement entered into by Tadeco and BuCor, whether it is worded as agreement, leasehold share and tenancy or JVA, does not matter,” COA said.
Cancellation
“What is obvious is the excessive holding of agricultural land by Tadeco, which, under the May 21, 2003 JVA, consisted of 5,308.36 ha. This being so, the joint venture agreement is unconstitutional,” it added.
The auditors recommended to BuCor Director General Benjamin delos Santos to “take appropriate action for the cancellation of the May 21, 2003, joint venture agreement or make representation with Tadeco for the amendment to conform to the … 1987 Constitution.”
Under the 1969 deal, Tadeco was supposed to pay P250 per ha per year in rent. This was raised to a total of P26.5 million in annual rent for the entire area under the 2003 agreement. This rent would be automatically increase by 10 percent every five years, plus a profit share in the banana production.
“Only the courts of law can declare that a contract is void,” Tadeco said.