Justice Secretary Vitaliano Aguirre is not aware that rehabilitation of prisoners is the primary goal of the Joint Venture (JVA) between the Tagum Agricultural Development Company (TADECO) and the Bureau of Corrections (BuCor) covering more than 5,000 hectares of the Davao Penal Colony (Dapecol) in Davao del Norte.
Aguirre said at a congressional hearing on the JVA on Monday, May 29, that he was not aware that the TADECO-BuCor deal also involved rehabilitation of Dapecol inmates.
“I was not informed that this contract constitute some parts of rehabilitation of the inmates,” Aguirre said at the joint hearing of the House of Representatives Committee on Justice and the Committee on Good Governance and Public Accountability.
Aguirre was not yet Secretary of the Department of Justice when the 25-year JVA was last reviewed and approved by both the DOJ and Congress.
The rehabilitation aspect of the JVA has been described by BuCor as a success.
House Speaker Pantaleon Alvarez initiated the congressional inquiry claiming that the JVA was illegal and disadvantageous to the government.
Alvarez has earlier also asked Aguirre to have the deal cancelled. Aguirre however said the power to cancel the contract is in the hands of President Rodrigo Duterte.
Under the JVA, BuCor will merely provide the land and manpower, while Tadeco will provide the capital in developing a portion of the Dapecol as a banana plantation primarily to help rehabilitate inmates inside the penal colony. Tadeco will assume all the business risks under the agreement.
Tadeco has hired inmates as farm workers who are paid minimum wage.
The success of the JVA as a rehabilitation program has inspired the BuCor to request Tadeco to replicate the JVA in Iwahig Penal Colony in Palawan.
At the hearing, Alvarez, who instigated the House inquiry after figuring in a personal quarrel with Rep. Antonio Floirendo Jr. whose family owns Tadeco , attempted to dispute the banana company’s firm stand on the JVA and its inarguable benefits to the government.
Responding to Alvarez, Tadeco president and CEO Alex Valoria told lawmakers that under the JVA, BuCor is guaranteed a production share, which is a fixed amount under the agreement, as well as a portion of the profits from the bananas exported by the company.
These guaranteed earnings are reviewed and increased by 10 percent every five years, Valoria said.
According to Valoria, BuCor, without spending a single centavo, earned last year a total of P142.72 million or 45% share in Tadeco’s P316 million net income from the banana plantation covered by the JVA.
Breaking down the the 2016 figure, Valoria said Tadeco paid BuCor a guaranteed production share of P35.36 million, and a profit share of P9.53 million.
On top pf this, Tadeco also spent P5.5 million for farm training program for inmates and P92.35 million for stipend support.
Last year, Tadeco paid nearly half a billion pesos in taxes, belying allegations its agreement with BuCor was “disadvantageous” to the government as claimed by Alvarez.
An audited financial statement showed that the giant Cavendish banana growing and exporting company paid to the government P438 million representing taxes and fees. The payments included real property taxes, business permits and fees, withholding tax on compensation, fringe benefits, and regulatory fees.
In the hearing, Alvarez insisted on his claim that the Tadeco-Bucor deal violated the Constitution.
Tadeco’s legal counsel refuted this by saying that under both the 1935 Constitution and the 1973 Constitution, the government is not barred from entering into such arrangements with respect to the development of natural resources. Tadeco’s counsel likewise pointed out that under the present 1987 Constitution, specifically Section 2, Article 12, the government can enter into JVAs involving “inalienable land of the public domain.”
Meanwhile, as Alvarez hounds Tadeco, local government officials of Davao del Norte are rallying behind the banana company citing its contribution to the economic development of the province.