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Calida: BuCor-Tadeco deal 'illegal'

MANILA, Philippines (UPDATED) – Solicitor General Jose Calida said on Thursday, April 29, that the deal between Tagum Agricultural Development Corporation (Tadeco) and the Bureau of Corrections (BuCor) is illegal and must be voided.

Calida issued his legal opinion on the joint venture agreement (JVA) between BuCor and Tadeco after Speaker Pantaleon Alvarez, who had raised red flags over the decades-old contract, requested it.

Calida, whose office is mandated to review government contracts, said that the deal violates the Constitution and Public Land Act, the same position taken by Alvarez.

BuCor and Tadeco entered into a contract in 1969 that allowed the company to lease land in the Davao Penal Colony for a banana plantation. Tadeco is owned by the family of Davao del Norte 2nd District Representative Antonio Floirendo Jr.

In 2003, the deal was extended to another 25 years, or until 2029.

In his legal opinion, Calida said that the Constitution only allows a private corporation to lease government land for a total period of 50 years.

“Assuming that the JVA is a lease, the initial agreement was entered into in 1969, extended for 25 years in 1979 and extended for another 25-year period in 2003. Tadeco’s use and occupation of the Davao Penal Colony lands should cease by 2019. The JVA cannot be allowed to last until 2029," Calida said.

Violations

The Solicitor General also said that the Constitution only allows the lease of public domain not exceeding 1,000 hectares. Tadeco currently leases 5,212.46 hectares.

The deal also violates the Public Land Act, according to Calida.

“Under the Public Land Act, agricultural public lands such as the Davao Penal Colony may be disposed of only through homestead, sale, lease, or confirmation of imperfect title. It should be noted that BuCor and Tadeco entered into a Joint Venture Agreement. Clearly, a Joint Venture Agreement is not one of the modes by which agricultural public lands may be disposed of,” Calida said.

Calida also said that that if BuCor was to lease the Davao Penal Colony, it should undergo competitive bidding, which did not happen in the deal with Tadeco.

Erik Dy, spokesperson of the Office of the Solicitor General, told Rappler that Calida's legal opinion has been submitted to Alvarez.

Calida issued his legal opinion ahead of the Department of Justice, which created a 6-member panel to review the deal. (READ: Graft complaint vs Floirendo not about feuding girlfriends – Alvarez)

Alvarez has done multiple actions to assail this deal including a petition for review at the Department of Justice (DOJ), a House resolution seeking an inquiry into the deal, and a graft complaint against Floirendo before the Office of the Ombudsman.

The Speaker also said that the government is at a disadvantage in the deal, losing as much as P106,167,191 per year.  

Alvarez and Floirendo are allies of President Rodrigo Duterte. The two Davao lawmakers  used to be good friends until they reportedly had a spat involving their girlfriends. (READ: 'Stop dragging us into your personal issues,' Paola Alvarez tells Floirendo's GF)

Floirendo was Duterte's top campaign contributor in the 2016 elections. Alvarez is a longtime friend of Duterte and secretary-general of the ruling Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban).

JVA 'has withstood the test of time'

In a statement sent to Rappler on Friday, Tadeco said Calida's statement "is premature and uninformed."

The company said that the review of the JVA at the DOJ is still ongoing, while the House probe has not yet started.

"Furthermore, there is no case filed before the courts on the cancellation of the said JVA. Only the courts of law can declare that a contract is void. This is a clear case of prejudging our JVA. Where is the fairness? Perhaps the intent is to condition the minds of the public and pre-empt the review of Department of Justice as well as the House probe," the statement read.

Tadeco said the JVA "has withstood the test of time" as well as "multiple reviews by Secretaries of Justice and several congressional investigations over so many years."

"All of them have found our JVA to be valid and beneficial to the BuCor and the Republic of the Philippines," the company added.

"These are the same items raised by Speaker Alvarez and, thus, there is nothing new in this recent statement of the Solicitor General. Nonetheless, we are prepared to answer all these issues in the proper time and proper forum." Rappler.com

Lian Buan

Lian Buan covers justice and corruption for Rappler. She is interested in decisions, pleadings, audits, contracts, and other documents that establish a trail. If you have leads, email lian.buan@rappler.com or tweet @lianbuan.

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