THE Commission on Audit’s special team has recommended the dissolution of a joint venture agreement between the Bureau of Corrections and Tagum Agricultural Development Co. for violation of the constitutional limits on leasable areas.
In its April 25 Audit Observation Memorandum No. 2017-013 submitted to BuCor director general Benjamin delos Santos, the auditors, led by Josefina Gonzales and supervising auditor Flordeliza Ares, said the deal was not in compliance with Section 3 of Article 12 of the Constitution.
“Alienable lands of the public domain shall be limited to agricultural lands,” Section 3 says. “Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding 25 years, renewable for not more than 25 years, and not to exceed 1,000 hectares in area.”
Speaker Pantaleon Alvarez welcomed CoA’s recommendation.
“This is a welcome development for the benefit of the people. These government agencies are doing their job,” said Alvarez who sought a congressional inquiry into the 25-year BOC-Tadeco lease contract.
Alvarez earlier asked the Solicitor General to conduct a review of the deal even as he said the government had lost over P13 billion in the allegedly anomalous contract.
Tadeco’s land lease had exceeded the limit because it covered 5,308.36 hectares of the Davao Prison and Penal Farm after its extension for another 25 years on May 21, 2003.
The same observations were noted on the parallel review of the original Bucor-Tadeco agreement on Dec. 26, 1969, under Section 2, Article 12 of the 1935 Constitution.
Under the provision, the audit team noted “no private corporation or association may acquire, lease or hold public agricultural lands in excess of 1,024 has.”
Tadeco, however, was allowed access and use of 3,000 hectares of the penal colony.
“What is obvious is the excessive holding of agricultural land by Tadeco, which under the May 21, 2003 JVA consisted of 5,308.36 has. This being so, the JVA is unconstitutional,” the audit read.
“We recommend that management take appropriate action for the cancellation of the May 21, 2003 JVA or make representation with Tadeco for the amendment thereof to confirm to the provision of Section 3, Article XII of the 1987 Constitution.”
The audit team said even if there were only two agreements signed between Tadeco and Bucor in 1969 and 2003, the details of the deals were changed several times, which resulted in the continued increase of Tadeco’s cultivated lands.
Under the 1969 agreement, BuCor was guaranteed rent of P250 per hectare per year of the 3,000-hectare land planted to bananas.
The government was supposed to receive a 10-percent share of the profit before taxes.
A tweaking of the agreement on July 10, 1973 omitted the government share in income, while Tadeco’s leased area was increased by another 1,000 hectares to encompass 4,000 hectares of the penal farm.
In October 1974, Tadeco added another 500 hectares for grain crops and another 500 hectares for banana crops.
A profit-sharing clause was inserted for the production of grain at P0.003 to P0.018 per kilo depending on the level of production.
In 1979, the rent per hectare was increased from P250 to P275.
The Davao penal farm is located in Panabo City, Davao del Norte, with a land area of 30,000 hectares and a prison reservation of 8,000 hectares. With Maricel V.Cruz
