President's Message
Atty. Benedicta Du-Baladad Message from the President:

Benedicta Du-Baladad

To FINEX members and friends,

PRESIDENT’S REPORT
July 2017 Issue

Last June 21, in celebration of the Philippine Independence, we had two of the country’s prime-movers of arts and culture. Arch. Paulo Alcazaren shared with us the relevance of national heritage conservation, and Direk Joel Lamangan on the state of the local film industry and how it is developing as an art. Our June GMM was a diversion from our usual topics.

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Why kill the golden goose?
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J. Albert GamboaBy J. Albert Gamboa

MANILA BULLETIN(Business Option)
May 12, 2017

Why kill the golden goose?

Business Option is a rotating column of members of the Financial Executives Institute of the Philippines appearing every Tuesday & Thursday in Manila Bulletin, business section.

A battle royale has reached the halls of Congress, the main protagonists of which are Speaker Pantaleon Alvarez, his fellow Davao del Norte Representative Antonio Floirendo Jr., and Department of Justice (DOJ) Secretary Vitaliano Aguirre II.

These erstwhile allies are at loggerheads over the joint venture agreement (JVA) between the DOJ’s Bureau of Corrections (BuCor) and the Floirendo-owned Tagum Agricultural Development Co. Inc. (Tadeco).

It may be recalled that Alvarez accused Floirendo of graft before the Office of the Ombudsman in March, and subsequently filed House Resolution No. 867 calling for the investigation of the Tadeco-BuCor JVA on allegations of being disadvantageous to the government and contrary to law. This came after the two Davao congressmen figured in a personal quarrel involving their paramours.

At a Lower House hearing conducted by the committee on good government and public accountability jointly with the committee on justice last Tuesday, the DOJ chief admitted that the Speaker asked him to declare the JVA illegal, although he said it was not within his powers to issue such a declaration and believes only President Rodrigo Duterte could cancel the contract.

The showdown of former best friends, both avid Duterte supporters, was averted when Floirendo inhibited himself from attending the hearing “to obviate any perception of personal interference or influence on the outcome.”

Instead, he was represented by Tadeco President Alex Valoria, who said the findings by a DOJ panel against the JVA were based on flawed interpretations of the Constitution as well as laws governing contracts and the disposition of public lands.

Valoria traced back Tadeco’s first joint venture with the Davao Penal Colony (Dapecol) to 1956 for the production of abaca hemp on a 60/40 basis. But the challenge posed by the emergence of nylon rope prompted Tadeco owner Antonio Floirendo Sr. to shift to banana production for export.

He forged a JVA with the Bureau of Prisons (now BuCor) in 1969 that primarily aimed to rehabilitate Dapecol inmates while serving their sentences and prepare them for reintegration to society by providing a decent means of livelihood at the banana plantation developed by Tadeco within the penal reservation.

In 1970, the Senate Blue Ribbon Committee reviewed the JVA and found it valid and above board. According to Valoria, “notable were the comments of Senator Benigno ‘Ninoy’ Aquino Jr. with regard to his confirmation that the rates at that time benefiting the BuCor were extremely good and beyond competitive.”

Various Tadeco-BuCor contracts passed through 14 Justice Secretaries who upheld their validity. These DOJ chiefs served under the administrations of Presidents Ferdinand Marcos, Corazon Aquino, Fidel Ramos, Joseph Estrada, Gloria Arroyo, and Benigno Aquino III.

Aguirre acknowledged that Tadeco employed thousands of workers and paid hundreds of millions of pesos in taxes to the government, with the positive impact extending beyond its 30,000 direct and indirect employees because of the multiplier effect on thousands of families benefiting from its operations.

However, Alvarez said the current JVA that took effect in 2004 is prejudicial to the government and deemed it an illegal lease contract with a questionable length of 25 years ending in 2029. He also alleged that Tadeco’s workers are maltreated and exploited.

On the other hand, Valoria reiterated that the contract is not a lease agreement but a joint venture. He insisted that the JVA is legal and its 25-year term is allowed under the 1987 Constitution, claiming that Tadeco is one of the best employers in the agricultural sector as evidenced by multiple awards from government agencies and global certifications for good agriculture practices.

More significantly, he pointed out that from 2004 to 2016, the financial benefits paid by Tadeco to BuCor amounted to R1.6 billion, while the benefits to thousands of ex-inmates and their respective communities are immeasurable due to the success of the rehabilitation program.

So why kill the goose that lays the golden eggs, all because of a war between inamoratas? This e-mail address is being protected from spambots. You need JavaScript enabled to view it

http://business.mb.com.ph/2017/05/10/why-kill-the-golden-goose/

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