IN 2019, law firm MinterEllison was presented with the opportunity to work on a royal commission into a financial scandal that had engulfed Papua New Guinea.
It prepared a detailed pitch for the case at a time when COVID-19 had yet to emerge.
The pitch factored in the sort of costs normally incurred on such a matter, such as flying multiple lawyers and technical experts to Port Moresby and accommodating them in hotels for months at a time.
Minters won the job but, by the time it signed a fixed-price contract in June 2020, COVID was rampant around the world.
The epidemic completely changed its approach. Perth partner Mike Hales, who led the case, never went to PNG.
Nor did his colleagues in Perth and Brisbane who worked on the case.
Instead, what eventuated was a case study in the capability of modern technology and the potential to run complex legal matters remotely.
The royal commission, instituted by Prime Minister James Marape, focused on the actions of previous PNG governments when they entered two large and complex financial transactions.
The focus was a $US1.3 billion loan from global banking group UBS to PNG in 2014.
The loan, signed off by former prime minister Peter O’Neill, was used to acquire shares in ASX company Oil Search.
The terms attached to this loan resulted in PNG incurring big losses.
It followed an ‘exchangeable bond’ transaction used to buy a 19 per cent stake in the PNG liquefied natural gas project in 2008.
A Perth connection was Peter Botten, who for many years was chief executive of Oil Search.
The ASX-listed company was the oldest and largest company in PNG and was a key stakeholder in the LNG project. (Oil Search was acquired last year by Adelaide-based Santos.)
Growth
Perth-based lawyers working on cases for foreign clients is becoming increasingly common.
It reflects the expertise held by Perth lawyers in areas such as energy and resources and corporate finance.
These are increasingly seen as exportable skills, not just when Australian companies undertake projects overseas.
Perth lawyers are also increasingly active on international dispute resolution.
Mr Hales, who practised in the UK before moving to Perth, brought extensive experience as an advocate and mediator to the PNG case.
He has represented clients based in China and the Middle East, for instance, and acted in an international arbitration regarding the railway system of Kenya and Uganda.
As well as dispute resolution partners such as Mr Hales, Minters’ team on the royal commission included partners in practice areas such as banking and corporate.
Mr Hales said hiring an international law firm with no links to the contentious transactions was a deliberate move.
“The government wanted the inquiry to be beyond reproach,” he said.
Mr Hales led the case in tandem with a team from Minters’ Brisbane office, led by Catherine Finlayson.
The only time Minters staff went to PNG was when Ms Finlayson and her executive assistant hand delivered their pitch for the job.
A junior Australian barrister engaged by Minters spent several months in PNG, but he was the exception.
Others just did not travel.
“Because the technology worked so well, we didn’t have to ask about whether we should try to manage COVID risk,” Mr Hales told Business News.
Connected
Mr Hales said the royal commission lasted 14 months, with the Minters team logging nearly 16,000 hours working on the case.
It included 72 hearings over Zoom.
These hearings linked the royal commission in Port Moresby to lawyers and witnesses in Perth, Brisbane and Sydney, as well as people quarantining in hotels in Port Moresby.
It also linked to expert witnesses in other countries.
“We could have seven to eight locations at any one time,” Mr Hales said.
He said Minters had been involved in other e-hearings over the years.
“We sort of knew what worked,” Mr Hales said.
“Our knowledge is so much more complete.”
Video conferencing was just one element of the technical solution, with the Minters team also using technology for document analytics, team collaboration and project management.
In addition, the law firm’s technical experts advised the PNG government on upgrades to its communications infrastructure in Port Moresby.
One of the goals of the PNG government and the royal commission was to maintain high public awareness.
The solution they opted for was live streaming of hearings via Facebook, with members of the public able to post comments.
“It was important for the population of PNG to be able to tap into it,” Mr Hales said.
“They liked seeing it brought into the open.”
Mr Hales is cautious when asked how much traditional approaches will change but believes the technology deployed on the PNG case will be used much more in future.
“There is a growing acceptance of this, especially on international arbitration matters,” he said.
“You can accelerate the hearings as you don’t need to wait for people’s diaries to clear so they can travel.”
Mr Hales said maintaining the motivation and enthusiasm of his team while everyone was working remotely was a challenge.
“It’s really hard, really relentless work; you rely on the energy of other people.”
With more than 100 people involved at various times, there were two online meetings per week to help maintain communication.
“Humour is a huge part of this job, it’s important to be able to have a laugh,” Mr Hales said.
He said the biggest motivator for lawyers was the quality of the work, and that was the starting point when Minters assessed the PNG opportunity.
“What a terrific job, it was really interesting.” Mr Hales said it crossed over legal, political and business issues, with complex financial transactions and the human dimension for the personalities involved.
The logistical challenges associated with this job extended beyond the hearings.
Completion of the voluminous report, which ran to 9,500 pages across 15 volumes, coincided with the Brisbane floods.
The floods meant many people were stuck at home and driver shortages in the trucking industry were exacerbated.
These factors meant the printing and distribution of the report was a major challenge.
Mr Hales noted that Minters’ Perth and Brisbane teams never actually met during the entire matter.
Even the celebratory drinks at the conclusion were held remotely.
Results
The final report was handed to the PNG government earlier this year.
Despite all the challenges, the commission reached damning findings.
“Overall, the commission concludes that risks were well managed in the case of the exchangeable bond transaction but were not in the case of the disastrous UBS loan,” its final report stated.
The commission found PNG lost $432 million because of the UBS deal, as well as losing access to dividends from the LNG project and the opportunity to establish a sovereign wealth fund.
It found UBS overcharged the PNG government by about $175 million.
One contentious aspect of the inquiry was the lack of cooperation by certain parties.
UBS and law firm Norton Rose Fulbright, which advised PNG on the 2014 deal, provided written statements and supporting documents, but the commission wanted more.
“It might have been expected that such well-paid former advisers would unstintingly assist the commission, even though they are located overseas and beyond the reach of the commission’s compulsory powers, but they have not,” the report stated.
“This surprising and disappointing behaviour has certainly limited what the commission could achieve, and along with other findings of this report merits their exclusion from work for the state and its entities for some time to come.”
