Enemalta blacklist ‘legally incorrect’ – Trafigura

Government defends blacklist of Trafigura and TOTSA after French oil company files judicial protest.

Dutch commodities firm Trafigura has informed the national energy corporation Enemalta that its blacklisting was "ill-founded and legally incorrect".

In a comment sought by MaltaToday, Trafigura's statement comes a day after TOTSA Total - the subsidiary of Swiss oil company Elf Aquitaine - filed a judicial protest against Enemalta, calling for the withdrawal of the blacklist.

The two companies were precluded from tendering for the sale of oil products to Enemalta by means of a letter dated 20 February 2013, over police investigations into the payment of kickbacks to former Enemalta officials by Total's and Trafigura's local representative George Farrugia.

Both companies employed the services of Farrugia and Aikon Ltd, before MaltaToday broke the story that Trafigura had paid commissions to the former chief executive of MOBC and consultant to the Enemalta chairman, Frank Sammut, for the supply of oil to the energy corporation.

Yesterday, energy minister Konrad Mizzi said Enemalta will keep Total and Trafigura on a tender blacklist until the police investigation into kickbacks paid by Farrugia to such key persons as former chairman Tancred Tabone, Sammut, as well as to former financial controller Tarcisio Mifsud and fuel procurement committee member Alfred Mallia, is over.

Mizzi said the state energy corporation was on "legally sound ground" in precluding TOTSA Total Oil and Trafigura from competing for public tenders for the supply of oil, after Farrugia was revealed to have paid kickbacks to Enemalta's former chairman and other officials.

"Our position is that until the investigation is ongoing, they will not participate in tendering," Mizzi said, citing the World Bank's employment of blacklists when companies are implicated in corruption.

The World Bank's own sanctions committee provides defendant companies with an appeals procedure before issuing a debarment of companies from working on World Bank financed projects.

In its judicial protest, TOTSA said Enemalta's decision was motivated by allegations of corruption made against former Enemalta officials, already accused in the Maltese courts of receiving kickbacks from oil trader George Farrugia.

"We have replied to Enemalta's letter declaring that in no way were we involved or aware of any wrongdoing in any contract awarded by Enemalta. To date, no charges have been issued against TOTSA on these allegations. We believe Enemalta's decision is discriminatory, abusive and illegal," TOTSA said.

TOTSA is the oil trading arm of French oil major Total, and Trafigura is a top five private oil trading house.

The police has so far arraigned in court former Enemalta chairman Tancred Tabone, former MOBC chief executive Frank Sammut, business partners Francis Portelli and Anthony Cassar, as well as former Enemalta financial controller Tarcisio Mifsud and fuel procurement committee member Alfred Mallia, accused of varying degrees of bribery, corruption and money laundering.

The arraignments followed a government decision to grant a presidential pardon to Total's former local agent, George Farrugia, in return for information given to the police and to a court.

In a comment from Enemalta, the corporation said that the decision was taken by the fuel procurement committee to exclude Trafigura and TOTSA from any tenders or offers, "either directly from the company or anyone acting on their behalf, until the outcome of the investigation."

Trafigura last won the December 2012 tender for 160,000 metric tonnes of 0.7% fuel oil while TOTSA last won a tender in August 2012 for the supply of 48,000 metric tonnes of 0.1% fuel oil.

Enemalta purchases its fuel through a restricted tendering procedure where an 'invitation to tender' is mailed out to all suppliers listed in a specific mailing list. Any  commercial operator can register in this list by sending an application consisting of the corporate profile of the organization together with at least two references of reputable organizations to whom the potential candidate had supplied fuel in the past 24 months.