Minutes taken down by Enemalta's fuel procurement committee started deteriorating in 2003 when corruption in oil tenders was alleged, according to Parliamentary Secretary Owen Bonnici.

He insisted that before 2003 the fuel buying board had proper minutes that included a summary of proceedings and members present. From 2003 to 2010 Enemalta fell within the ministerial responsibility of Austin Gatt.

Dr Bonnici made the revelation this morning during a meeting of the Public Accounts Committee that is probing the findings of the National Audit Office into fuel procurement by Enemalta.

However, NAO officials, who were facing their third grilling session - the probe started on Monday - insisted they did not check how minutes were taken beyond the audit period 2008 and 2011.

The NAO found unacceptable minutes that included illegible writing, improper record keeping and doodles, particularly in 2008 and 2009. The situation started to change in 2010 when Enemalta was transferred to former finance minister Tonio Fenech.

Dr Bonnici said the poor minute-taking coincidentally started in December 2003 when according to court proceedings an oil tender was given to a company that did not even bid. The court proceedings refer to criminal charges brought earlier this year against several former Enemalta officials over corruption.

Lack of policy

The meeting heard how Enemalta was buying oil without a policy that regulated the process, at least between 2008 and 2010.

However, Auditor General Anthony Mifsud was reluctant to delve deeper into the implications of lack of policy when pressed by Government MPs Justyne Caruana, Luciano Busuttil, Chris Agius and Parliamentary Secretary Owen Bonnici.

At some point Mr Mifsud said there may have been "an unwritten policy" but it was difficult to ascertain things because record keeping and minute taking were almost non-existent in the period.

The Government side kept insisting for an explanation on what the NAO meant when it said Enemalta bought oil in a policy vacuum.

NAO manager Keith Mercieca said it was a statement of fact, based on what Enemalta told his office, that there was no policy and from a governance perspective this was not a good thing. However, he was reluctant to draw any other conclusions.

The company established a fuel procurement policy in January 2011 that was updated in May of that same here, which the NAO said was very good.

But Opposition MP Jason Azzopardi, who chairs the committee, noted that in 2005 a fuel advisory committee was set up to guide Enemalta's actions. He asked whether it was correct to speak of a policy vacuum given the existence of such a committee.

Mr Mercieca said the advisory committee gave advice to Enemalta's board of directors but if there was a policy of sorts he would have expected Enemalta to tell the NAO during its audit.

To another question from Nationalist Party deputy leader Beppe Fenech Adami as to why the NAO did not ask members of the fuel procurement committee at the time whether they followed a policy, Mr Mercieca said they got their answers from Enemalta.

Mr Mifsud insisted a performance audit was not an investigation and the most important thing was to stick to documents and replies given by Enemalta's management. "Interviewing individuals who were no longer there could interfere with an audit."

Dr Fenech Adami implied the NAO may have been misled when it spoke of a policy vacuum because a fuel advisory committee had existed. "Does it not occur to you that there may be some people in Enemalta who could have had an interest not to mention the fuel advisory committee?"

Opposition MPs, including Kristy Debono, insisted the NAO should have delved deeper into the workings of the fuel advisory committee.

The Chalmers 2006 'policy'

The Opposition said the NAO was misled by the Chief Financial Officer Antoine Galea because in April 2006 then minister Austin Gatt had tabled in Parliament a document drawn up by the fuel advisory board, which had been adopted by the Government.

The fuel advisory board was chaired by former BOV chairman Roderick Chalmers.

Dr Fenech Adami insisted the 2006 document set policy, questioning the NAO's statement that the fuel procurement board acted in a policy vacuum.

But Mr Mercieca insisted the 2006 document, which had been brought to the NAO's attention by Mr Galea, was not a policy on fuel procurement. Rebutting Dr Fenech Adami's assertion Mr Mercieca insisted that "by no stretch of the imagination" could the report be considered a policy that guided the oil buying committee.

He said the document only contained a paragraph on oil procurement that suggested Enemalta develop a fuel procurement policy.

Pointing towards the voluminous policy document adopted in January 2011 by Enemalta, Mr Mercieca said it was this that justified the purchase of millions of euros in fuel and not "that paragraph". "If anything the 2006 document, which contained a set of recommendations, bolsters the NAO's findings that Enemalta did not have a fuel procurement policy and one had to be developed."

Dr Fenech Adami "begged to differ", insisting the NAO dismissed the Chalmers report too easily and passed judgement on a policy, going beyond the audit office's legal remit.

Dr Azzopardi called for a direct confrontation between the experts that assisted the NAO and the author of the 2006 report to clarify the controversy whether the document constituted policy, something the Auditor General objected to. "This threatens the NAO's autonomy," Mr Mifsud said.

"Autonomy does not imply immunity from being asked questions. I don't doubt that Mr Mercieca is genuine but what is the difficulty of seeking the truth, the full picture?" Dr Azzopardi said.

Who were the oil buyers?

A heated exchange occurred when Dr Caruana asked about the names of the members of Enemalta's fuel procurement committee with Dr Fenech Adami insisting this was not "the secret of Fatima" because the names were available online.

However, the exchange was diffused when the Opposition MPs agreed that it was inappropriate for Enemalta not to provide the names when it was asked to do so by the NAO.

Mr Mercieca said Enemalta's initial response was a spreadsheet with blank spaces where the names should have been and the minutes of meetings held particularly in 2008 and 2009 contained no such information.

The PAC meeting ended at 1pm. The hearing continues on Friday morning.

 

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