COA seeks cancellation of Bucor-Tadeco deal

MANILA, Philippines - A special panel of the Commission on Audit (COA) has recommended the cancellation of the joint venture agreement between the Bureau of Corrections (BuCor) and the Tagum Agricultural Development Co. Inc. (Tadeco) for supposedly violating the constitutional limits on the area of leasable public agricultural land.

In a six-page audit observation memorandum the COA released yesterday, the special team created to investigate the BuCor-Tadeco deal said the joint venture deal is in violation of the 1987 Constitution.

The COA said joint venture agreement (JVA) between BuCor and Tadeco was in the form of a leasehold and share tenancy agreement.

Under the agreement inked in December 1969, Tadeco was allowed to lease for 15 years BuCor’s 3,000 hectares of land in Davao Prison and Penal Farm (DPPF) for a banana plantation.

The agreement was amended on May 21, 2003 to extend the lease for another 25 years beginning Sept. 26, 2004. The amended JVA also increased the lease area to 5,308.36 hectares.

Under the 2003 agreement, Tadeco will pay P26.5 million annually, which would increase by 10 percent every five years, apart from profit shares that would be received by the government.

Tadeco is the world’s largest contiguous banana plantation. It is engaged in the production and export of Cavendish bananas to Japan, Hong Kong, China, Korea, Middle East, Russia, Malaysia and Singapore under the Del Monte and Dole brands.

“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. What is obvious is the excessive holding of agricultural land by Tadeco... This being so, the JVA is unconstitutional,” said the COA report on April 25.

“We recommend that (BuCor) management take appropriate action for the cancellation of the May 21, 2003 JVA or make representation with Tadeco for the amendment thereof to conform to the provision of Article XII, Section 3 of the 1987 Constitution,” it added.

For the 1969 Tadeco-BuCor agreement, the audit team pointed out the provisions of the 1935 Constitution states that “no private corporation or association may acquire, lease or hold public agricultural lands in excess of 1,024 hectares.”

As for the 2003 JVA, the audit panel cited Article XII, Section 3 of the 1987 Constitution that limits the area of public agricultural lands up for lease to private corporations and associations to 1,000 hectares.

“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,” the audit memorandum read.

DPPF is located in Panabo City, Davao del Norte and has a total land area of 30,000 hectares with 8,000 hectares reserved for the prison facility.

The Tadeco-BuCor agreement came into the limelight following the spat between Speaker Pantaleon Alvarez and Davao del Norte Rep. Antonio Floirendo Jr.

Last March, Alvarez filed a graft complaint against Floirendo for supposedly having business interests in the deal.

Alvarez alleged Floirendo, the biggest financier of President Duterte’s presidential bid, continues to be a board member of Tadeco despite his election as congressman.     – With Delon Porcalla, Paolo Romero