TADECO finds DOJ position on BuCor land deal 'fraught with legal misinterpretations'

Banana exporter Tagum Agricultural Development Company Inc. (TADECO) on Friday questioned the findings of the Department of Justice (DOJ) that the decades-old land deal with the Bureau of Corrections (BuCor) is illegal. 

TADECO President and CEO Alex Valoria said the findings by a DOJ panel, which Justice Secretary Vitaliano Aguirre II said he is supporting, were based on "flawed interpretations of the Constitution and laws governing contracts and the disposition of public lands."

The findings were forwarded last week to House Speaker Pantaleon Alvarez, who had asked the DOJ to review and eventually scrap the contract entered into by the BuCor and TADECO, which is owned by his erstwhile friend, Davao Del Norte Rep. Antonio Floirendo Jr.

“When the DOJ investigating panel released its findings, Justice Undersecretary (Raymund) Mecate pointed out that the JVA was ‘fraught with infirmities’. But, sadly, when we read the findings released to the media, the only conclusion we can respectfully come to is that the findings were fraught with legal misinterpretations,” Valoria said in a statement.
 
Valoria noted the panel recommendation to amend the JVA and make it compliant with the law indicates that the Justice department deems the contract as valid.

On the DOJ's claim that the deal's contract area of 5,308 hectares exceeds the allowable area of public agricultural lands of 1,000 hectares that may be leased to private firms, Valoria said the agreement involves inalienable public land, which under the Constitution and existing laws does not have any prescribed area limits.

Assuming that the deal should have gone through public bidding, the Implementing Rules for Joint Venture contracts were released only in 2008 and later amended in 2013, he said.

The agreement, which covers portions of the Davao Prison and Penal Farm (DPPF) Reservation in Panabo City for TADECO's banana plantation, was signed in 1969. It was extended for 25 years in 1979, and again for another 25 years on May 21, 2003.

TADECO denied claims that the deal was grossly disadvantageous to the government since it was based on low lease rates.

The company said that in 2016 alone it paid BuCor P142,719,662, an amount supposedly equivalent to around P27,000 per hectare.

"This figure is way above the lease rates of P10,000 to P18,000 that the DOJ said BuCor should be receiving from TADECO, when it claimed that the JVA was disadvantageous to the government in terms of per hectare rate,” Valoria said.
 
“Moreover, the successes of the rehabilitation program under the JVA resulting in the eventual re-integration of the inmates back to society as productive citizens is beyond monetary value,” he added.

Valoria said the financial benefits to BuCor, under the terms of the JVA, “sufficiently established a realistic sharing of the profits in the joint venture. The JVA is a special contract, so stipulations on the sharing of losses will defeat the objective of the BuCor’s program of rehabilitating inmates inside the farm.”

According to TADECO, the 1979 Consolidated JVA provides that a new 25-year term on the use of the DPPF Reservation start on that year, and thus a renewed 25-year term will start in 2004 and end in 2029.
 
The 1979 JVA consolidated various contracts entered into by BuCor and TADECO from 1969 to 1978 involving different land areas, the company said.

“Hence, the DOJ claim that the JVA and its predecessor agreements since 1969 have granted TADECO beneficial use of the DPPF for 60 years, or more than the allowable period stated under the Public Land Act, is erroneous,” Valoria said.

On DOJ's position that a presidential act is required to declare the DPPF Reservation as "alienable and disposable" before any agreement is allowed involving it, Valoria said the department interpreted the JVA as a form of “disposition” of land when it is not.

“The JVA does not involve any land to be disposed. The primary purpose of the JVA is the rehabilitation of inmates inside the DPPF,” Valoria noted.
 
He said that under 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.

Aguirre has disagreed with the DOJ recommendation to correct the infirmities of the JVA even as he has yet to decide on the issue of which between the DOJ and the BuCor has the power to move so that the contract may be invalidated.

The contract is also the subject of a complaint Alvarez filed against Floirendo before the Office of the Ombudsman.

Alvarez alleged that Floirendo violated the Anti-Graft and Corrupt Practices Act since the latter was already a lawmaker when the contract was renewed in 2003 while also serving as one of stockholders of TADECO. — Virgil Lopez/VDS, GMA News