Tadeco open to review banana ‘joint venture agreement’ with gov’t

Feb. 22, 2017

DAVAO CITY, Philippines–The Tagum Agricultural Development Co., Inc., one of the biggest exporters of banana, expressed its openness to review the present joint-venture agreement with the government for the lease of banana plantations in Davao del Norte.

While it welcomed the call for the government to review the agreement, Tadeco President Alex N. Valoria, in a statement Monday, pointed out that the company “has always been transparent with its deal with the government.”

“Even during the past administrations, the company has always been open to any call for adjustments in the benefits that the government derives from the joint venture as well as the benefits that go to the community and the inmates,” Valoria said.

Valoria’s statement came after the Department of Justice said it would review the 25-year Joint Venture Agreement between the Tadeco and Bureau of Corrections which is under the DOJ.

Justice Secretary Vitaliano Aguirre II said the existing agreement was “unfavorable” to the government because the payment received by the government from Tadeco was only a fraction of the prevailing market rate.

But Valoria maintained that Tadeco’s relationship with Bureau of Correction is a joint venture and not a lease agreement.

It was in 1969 when the JVA took effect and its terms were amended back in 1979 and the 15-year agreement was extended for 10 years, reports indicated.

Since 2012 the contract has been subject of three congressional hearings by the committee on agrarian reform in Congress, according to Valoria.

“In the past when government asked for adjustments, the company readily accommodated them, noting that the times are changing, although the contract provides for escalation clause,” he said, citing a year after the 2003 renewal of the joint venture agreement, the values of guaranteed income and profit sharing were increased as indicated in the amendment to the joint venture agreement dated Nov. 27, 2004.

The joint venture, which covers 5,308 hectares at the Davao Prison and Penal Farm reservation, has benefited about 3,500 inmates every year with an average daily deployment of about 1,000 inmates every day under the Inmates Farm and Training and Exposure Program.

He said that in terms of financial benefits and assistance to Bucor, the joint venture resulted in about P1.642 billion in financial benefits until 2016, about P15.432 million in fixed program assistance during the period, P3.831 million in infrastructure assistance, and P2.205 million in other forms of assistance.

On employment generation, the joint venture, on a three person per two hectare ratio, generated about 18,580 jobs for inmates and other workers and resulted in about P3.1 billion in annual salaries.

Valoria, however, explained that the figures should have included the stipend and support program, guaranteed production share, profit share, inmates farm and training support, training subsidy, landwatch patrol and corporate social responsibility.

In 2014, company documents showed that the government received P32.969 million for guaranteed production share and it got P8.576 million for profit share.

Last year, the guaranteed production share of the government ballooned to P35.327 million, while profit share went up to P9.527 million.

“We are never remiss of our obligations both to the government and the workers,” Valoria said. (davaotoday.com)

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