MANILA - The fact-finding committee created by the Department of Justice (DOJ) to investigate and review the controversial land deal between the Bureau of Corrections (BuCor) and Floirendo family-owned banana firm Tagum Agricultural Development Company Inc. (TADECO) has found the agreement illegal.

This was confirmed to ABS-CBN News by Justice Undersecretary Raymund Mecate, who was designated officer-in-charge of the justice department while Secretary Vitaliano Aguirre was on official trip abroad for almost two weeks.

"I signed [the report] as OIC of the department last week," Mecate said in a text message.

No details on the findings and recommendations were made available as of this writing.

Justice Secretary, also through text message, said he has yet to review the report and act on the recommendations.

"I directed the DOJ to defer any recommendation until my return [to the Philippines]," Aguirre said.

Chief State Counsel Ricardo Paras III led the fact-finding committee; its members include Director Maria Charina Buena Dy-Po (vice chairman, technical staff), State Counsel Precious Pojas (legal staff), State Counsel Melvin Suarez (legal staff), State Counsel Noel Adriatico (technical staff), and Atty. Catherine Angela Maralit (technical staff).

The probe was ordered by the DOJ upon the formal request last March 30 of House Speaker Pantaleon Alvarez, who insists that the deal between TADECO and the DOJ attached agency should be voided for "lack of basis and authority," and being “grossly disadvantageous to the government.”

Alvarez urged the DOJ to annul the contract which converted the vast 5,308-hectare Davao Penal Colony reservation located in Panabo, Davao Del Norte into a banana plantation owned by the family of Davao Del Norte Representative Antonio Floirendo Jr., who used to be a close friend and political ally of the speaker.

TADECO inked the assailed joint venture agreement (JVA) with BuCor in July 1969 to lease 5,308.36 hectares of the Davao Penal Colony reservation for the company's banana plantation; the deal was renewed 10 years later, and again, in May 2003, for another 25 years. The last lease extension guaranteed the BuCor an annual production share of P26,541,809, plus mandatory increase of 10 percent, every five years.

Under the agreement, the BuCor would also receive windfall from TADECO's banana exports.

"However, this is based on the low lease rates of around P5,000 per hectare per year, compared to the prevailing lease rates of P35,000 per hectare per year of underdeveloped land, in the same area," Alvarez said, adding that the 25-year deal is "contrary to industry practice of only five to 10 years.”

Alvarez filed a graft case against Floirendo before the Office of the Ombudsman.

Alvarez pointed out that Floreindo was a congressional representative in 2003 and also a stockholder of TADECO, and rejoined its board in 2008, in "blatant violation” of Section 3(h) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act), which prohibits government officials from having financial interests in government contracts, as provided in the 1987 Constitution.

In a separate opinion, the Office of the Solicitor General (OSG) said the BuCor-TADECO JVA "is void as it goes against the Constitution and the Public Land Act.”

"It should be emphasized that the Constitution only allows private corporations to hold lands of the public domain through lease for a total period not exceeding 50 years… [t]he Constitution also provides that private corporations may only lease lands of the public domain not exceeding 1,000 hectares,” Solicitor General Jose Calida said, in a statement released to the media.