Enemalta had no policy to justify spending millions of euros on oil between 2008 and 2010, according to an official from the National Audit Office.
Manager Keith Mercieca yesterday said the State energy company’s fuel procurement committee only got a policy in January 2011.
Mr Mercieca was testifying during the third session of Parliament’s Public Accounts Committee, which probed the NAO’s findings into how Enemalta bought its fuel.
In an intense exchange with Opposition MPs Beppe Fenech Adami and Jason Azzopardi, the NAO official insisted that “by no stretch of imagination” could recommendations made in 2006 be considered a policy that guided the fuel procurement committee.
By no stretch of imagination can recommendations made in 2006 be considered a policy that guided the fuel procurement committee
It was Dr Fenech Adami who took umbrage at the NAO’s conclusion that fuel buying was done in “a policy vacuum”.
He then produced a document tabled in Parliament in April 2006 by then energy minister Austin Gatt.
The report, which Dr Fenech Adami insisted was a policy document, had been drawn up by a fuel advisory board set up by Dr Gatt a year earlier.
The board was headed by former Bank of Valletta chairman Roderick Chalmers and Dr Gatt had said the report’s recommendations were taken on board by the Government.
Dr Fenech Adami said the NAO was misled by Enemalta’s chief financial officer Antoine Galea – the NAO’s official contact at Enemalta for the audit – because the company did have a policy approved by the Government.
But Mr Mercieca stood his ground, insisting the 2006 document, which was brought to the NAO’s attention by Mr Galea, was not a policy on fuel procurement.
He said the document only contained a paragraph on oil procurement that, in fact, suggested that Enemalta should develop a fuel procurement policy.
Pointing towards the voluminous policy document adopted in January 2011, Mr Mercieca said it was this that justified the purchase of millions of euros in fuel and not “that paragraph”.
“If anything, the 2006 recommendations bolster the NAO’s findings that Enemalta did not have a fuel procurement policy and one had to be developed,” Mr Mercieca said.
Dr Fenech Adami “begged to differ”, insisting the NAO dismissed the Chalmers report too easily.
He also said the NAO passed judgement on a policy, something that went beyond the audit office’s legal remit.
Mr Mercieca refuted the claim, saying he could not have expressed an opinion on policy because it did not exist.
He said experts appointed by the NAO had outlined what a fuel buying policy should contain and the 2006 document did not satisfy the requirements.
Dr Azzopardi then called for a direct confrontation between the NAO experts and the author of the 2006 report to clarify the controversy, something Auditor General Anthony Mifsud objected to.
“This threatens the NAO’s autonomy,” Mr Mifsud said, adding the NAO officials were not the ones under investigation.
Dr Azzopardi insisted autonomy did 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?”
While Opposition MPs, including Kristy Debono, wanted to clear Dr Gatt from any wrongdoing by implying that he had adopted a policy proposed by the advisory board, Government MPs insisted on drawing links between lack of policy and the oil scandal that emerged in January.
Mr Mifsud was reluctant to delve deeper into the lack of policy implications when pressed by Labour MPs Justyne Caruana, Luciano Busuttil, Chris Agius and Parliamentary Secretary Owen Bonnici.
At one point Mr Mifsud even suggested there may have been “an unwritten policy” but it was difficult to ascertain things because record keeping and minute taking were almost nonexistent in the period.
The Government side kept insisting on an explanation of what the NAO meant when it said Enemalta bought oil in a policy vacuum.
Mr Mercieca said it was a statement of fact, based on what Enemalta told his office: there was no policy. From a governance perspective this was not a good thing. However, he was reluctant to draw any other conclusions.
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.
The NAO officials are expected to continue testifying on Friday.
ksansone@timesofmalta.com