DOJ, COA initial findings back Sol-Gen stand that BuCor-Tadeco land deal is illegal

The 2013 BuCor-TADECO deal is “not a Joint Venture Agreement as defined under existing jurisprudence”, according to a committee report by the Department of Justice.

Initial findings of separate investigations by the Department of Justice (DOJ) and the Commission on Audit (COA) support the legal opinion of the Office of the Solicitor General that the land deal between the Bureau of Corrections (BuCor) and the Tagum Agricultural Development Co. (TADECO), owned by the Floirendo family, is void for being illegal.

Solicitor General Jose Calida had issued the legal opinion to House Speaker Pantaleon Alvarez, who requested a review of the 25-year joint venture agreement (JVA) of BuCor and Tadeco for allegedly being anomalous and disadvantageous to the government.

Tadeco chided Calida for issuing the opinion, claiming it was “premature”. Alvarez has also sought a congressional inquiry into the 25-year BOC-Tadeco lease contract, saying the government has lost over P13 billion in the anomalous contract.

Likewise, he filed graft charges against Davao del Norte Rep. Antonio “Tonyboy” Floirendo for failing to divest himself of any pecuniary interest from the family-owned firm while he was serving as congressman in 2003 during the 12th Congress, when BuCor and Tadeco inked the Joint Venture Agreement for the use of the land of the Davao Prisons and Penal Farm (DPPF).

Preliminary DOJ Fact-Finding Committee Report: deal is illegal

In a 7-page letter to Alvarez, signed by Undersecretary Raymund Mecate “by authority of the Secretary”, he presented the summary of the Preliminary Fact-Finding Investigation Report submitted by the DoJ Fact-Finding Committee on the BuCor-TADECO deal.

However, Mecate said the initial report of the panel was “without prejudice to the final review and approval of the Secretary of Justice.”

Among others, the fact-finding committee pointed out that since the land in question is an inalienable land of the public domain, it cannot be the subject of any Joint Venture Agreement, such as the one entered into between BuCor and TADECO.

Even assuming a JVA is allowed over the property, the 2013 BuCor-TADECO deal is “not a Joint Venture Agreement as defined under existing jurisprudence”, according to the DoJ committee report.

They said the agreement failed to comply with legal requirements to be valid, noting that there is no community of interest in the business by both parties; no categorical indication of a true and realistic sharing of the profits and losses; and that BuCor’s participation in the operation
and management of the banana plantation is substantially minimal.
Likewise, the DoJ panel pointed out that the present JVA contract area of 5,308 hectares is more than five times the allowable area (1,000 hectares) of public agricultural lands that can be leased to a private corporation under the 1973 and 1987 Constitutions.

Moreover, they found that the present BuCor-TADECO JVA and earlier agreements since 1969 were never subjected to ay public auction or bidding in violation of Commonwealth Act. No. 141, or the Public Land Act.

The DoJ panel also stressed that the agreements, covering 1969 to 2029, is more than 10 years the maximum 50 year allowed under C.A. 141.

“Under the BuCor-TADECO JVA, the production and profit share of the BuCor in 2016 amounted to only P44,854, 726.00, or a rate of P8,449.83 per hectare per year. Compared to the prevailing lease rates of P10, 000-P18, 000 per hectare per year of Tanglaw and Cooperative leaseback rates located in the general area where the DPFF lands are located, the BuCorTADECO
JVA appears to be disadvantageous in terms of per hectare rate,” the DoJ panel said.

COA says deal unconstitutional In a separate 6-page Audit Observation Memorandum dated April 25, 2017 and addressed to Atty. Benjamin Delos Santos, Director General of BuCor, the Commission on Audit asked the bureau to comment within 5 days from receipt.

The memorandum, signed by Audit Team Leaders Josefina Gonzalez and Supervising Auditor Flordeliza Arez noted, among others, that the 1935 Constitution governing the 1969 deal between BuCor and TADECO allows only a maximum of 1,024 hectares of public lands to be leased.

Since BuCor allowed the holding or lease of an agricultural land of 3,000 hectares to TADECO, the December 26, 1969 Agreement together with its addendums and amendments is unconstitutional, according to the COA memorandum.

“Similarly unconstitutional is the May 21, 2003 JVA because the 5,308.36 hectares landholding of TADECO over an agricultural land, which was allowed by the BuCor, far exceeded the limitation of 1,000 hectares provided under the 1987 Constitution,” it added.

According to the COA, it does not matter if the contract or agreement entered into between BuCor and TADECO is worded as Agreement, Leasehold Share and Tenancy, or JVA.

“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, is a violation of the provisions of Section 3, Article XII of the 1987 Constitution, limiting the holding of corporations to only 1,000 hectares. This being so, the JVA is unconstitutional,” COA said.