Papua New Guinea Law Reports - 1992
[1992] PNGLR 514
SC434
PAPUA NEW GUINEA
[SUPREME COURT OF JUSTICE]
SCR NO 7 OF 1992
SPECIAL REFERENCE PURSUANT TO THE CONSTITUTION, SECTION 19 - REFERENCE BY THE EAST NEW BRITAIN PROVINCIAL EXECUTIVE COUNCIL
Waigani
Kidu CJ Sheehan Andrew JJ
30 November 1992
CONSTITUTIONAL LAW - Conflict of laws - Organic Law on Provincial Government - Concurrent legislative powers of provincial legislatures - Consistency with Act of the National Parliament - Exhaustive laws - Laws in the national interest - Non-justiciability - Inconsistency between the Forestry Operations Control Act 1992 (East New Britain) and the national Forestry Act 1991.
Facts
By a special reference, the East New Britain Provincial Executive Council sought the Supreme Court's opinion under s 19(3)(eb) of the Constitution, regarding the validity of the province's Forestry Operations Control Act 1992 (the Provincial Act). Four questions were referred but in general terms. They raised the issue of whether or not the Provincial Act was unconstitutional and invalid in that it was inconsistent with the national Forestry Act 1991 pursuant to s 28 of the Organic Law on Provincial Government (the Organic Law).
The national Forestry Act set up a complex administrative structure and procedure for the control and regulation of all forestry operations throughout the country, including the allocation of permits. The Provincial Act, on the other hand, provided for the control of forestry operations within East New Britain Province. Thus, a permit holder under the national Forestry Act who intended to carry out forestry operations in the East New Britain Province had to submit a Forestry Operations Development Plan to the provincial executive council for its approval under s 3(1) of the Provincial Act in order to be allowed to carry out forestry operations in the province. If the requirements of a Provincial Act were not met, a permit holder would be operating illegally in the province and would be subject to the penalty of fine or imprisonment and to have any logs and timbers harvested therefrom to be seized and forfeited to the provincial government.
Held
1.       "Forestry" is defined by s 27 of the Organic Law on Provincial Government to be a "concurrent" subject, and "concurrent" legislative powers in relation to inconsistency are regulated by s 28 of the Organic Law.
2.       The National Parliament can legislate on "concurrent" subject matters in a matter of national interest and to the extent that it is of national interest. Section 29(2) of the Organic Law provides that if an Act of Parliament states it to be a matter of national interest, then this question is non-justiciable.
3.       The test for inconsistency in Papua New Guinea is to ascertain whether the legislature has intended to set out the law "completely, exhaustively or exclusively" for a matter. This test is adopted and expanded by s 23 of the Organic Law in defining the meaning of exhaustive laws within Part VI of the Organic Law, which includes s 28.
Adopted and applied "cover the field test" described by Dixon J in Ex parte McLean (1930) 43 CLR 472 as follows:
"'Inconsistency' depends upon the intention of the paramount legislature to express by its enactment completely exhaustively or exclusively what shall be the law governing the particular conduct or matter to which its attention is directed when federal law discloses such an intention, it is inconsistent with it for a law of the State to govern the same conduct or matter."
4.       The National Forestry Act is an exhaustive law in the field of national forestry control and development throughout Papua New Guinea and is declared to be a matter of "national interest" by s 1(2) of the act (and reinforced by the National Forest Policy of 1990). The general intent of the provincial law, in so far as it grants control of forestry operations within the province to the Provincial Executive Council, is inconsistent with the national act and, therefore, unconstitutional.
Cases Cited
Papua New Guinea case cited
Jaha Development Corporation Pty Ltd v Ilagi - (1990) unnumbered unreported National Court decision.
Other cases cited
Clyde Engineering v Cowburn (1926) 37 CLR 466.
Ex parte McLean (1930) 43 CLR 472.
Counsel
Graham Powell, for the applicant.
James Baker, for the respondent.
KIDU CJ SHEEHAN ANDREW JJ: This is a special reference to the Supreme Court pursuant to s 19 of the Constitution by the East New Britain Provincial Executive Council, seeking the Court's opinion as to the validity of a law known as the Forestry Operations Control Act 1992 (No 3 of 1992) of the East New Britain Province. The provincial executive is entitled to make such a reference by virtue of s 19(3)(e b) of the Constitution.
The questions referred are:
"(a)     Does s 27 of the Organic Law on Provincial Government empower the East New Britain Provincial Government to enact the Forestry Operations Control Act 1992 as passed by its Assembly?
(b)      Is the Forestry Operations Control Act 1992 of East New Britain inconsistent in any way with any Act of the National Parliament?
(c)      If yes to question (b), to what extent does such inconsistency affect the application of the Forestry Operations Control Act 1992 of East New Britain?
(d)      For the purposes of s 114(3) of the Organic Law on Provincial Government, are the matters covered by the Forestry Operations Control Act 1992 of East New Britain matters of "national interest"?
In general terms, these questions raise the issue of whether or not the Forestry Operations Control Act 1992 of the East New Britain Provincial Government (the Provincial Act) is unconstitutional and invalid in that it is inconsistent with the Forestry Act 1991, pursuant to s 28 of the Organic Law on Provincial Government (the Organic Law). Section 27 of the Organic Law lists a broad range of legislative powers in respect of which both the National Government and each provincial legislature has legal authority to pass laws concurrently. By definition, "forestry" is such a concurrent subject. Section 28 makes provisions in respect of the likelihood of an inconsistency arising in respect of one of these areas, one law at national level and one at provincial level. Section 28 provides: 
"28(1). A provincial legislature may make a law with respect to a subject or subjects to which this Division applies, that shall have effect so far as it is not inconsistent with any Act of the Parliament". 
Under s 29 of the Organic Law, the National Parliament shall not pass laws in respect of concurrent subjects unless the law relates to a matter of national interest and only to the extent that it relates to a matter of national interest. However, by reason of s 29(2), if the act of the National Parliament states it to be a matter of national interest, then this question is non-justiciable.
In our judgment, to properly decide the question of consistency, it is necessary to examine both acts.
The Forestry Act (No 30 of 1991) was certified on October 16 1991 and substantially brought into effect on June 25 1992. The act repeals the former Forestry Act (Ch 216), the Forestry (Private Dealings) Act (Ch 217) and the Forest Industries Council Act (Ch 215). Section 1(2) of the act provides:
"Section 1(2). For the purposes of s 29 of the Organic Law on Provincial Government, it is hereby declared that this Act relates to a matter of national interest".
As counsel have ably submitted, the Forestry Act sets up a complex administrative structure and procedure for regulating all forestry operations, including the allocation of permits. The structure comprises the following:
-        the Papua New Guinea Forest Authority (s 5);
-        the National Forest Board (s 9);
-        provincial forest management committees (s 21);
-        a state marketing agency (s 42).
The major aspects of forestry operations and the allocation processes are:
-        preparation of provincial forest plans (s 49);
-        preparation of a national forest plan (s 47);
-        acquisition of timber rights (s 56);
-        execution of a forest management agreement (s 58);
-        consultation with customary owners and provincial governments (s 59);
-        preparation of a feasibility study (s 62);
-        advertisement of a project (s 64);
-        registration of forest industry participants (s 65);
-        preparation of project proposals (s 66);
-        evaluation of proposals by provincial forest management committees (s 67);
-        recommendation by the Board as to allocation (s 72);
-        ministerial powers in relation to permits (ss 73,81,83 and 84);
-        preparation of 5-year working plans (s 101); and
-        preparation of annual logging plans (s 102).
All forestry operations also need approval for their environmental plans under s 4 of the Environmental Planning Act (Ch 370).
It is common ground that the Forestry Act followed the new Forest Policy of 1990, and it addressed the recommendations of the Barnett Commission of Inquiry into aspects of the forest industry. Clearly, the act establishes a new administrative structure, and there is a cross-section representation and participation in the country's forest resource management and development. For example, the National Forest Board of the PNG Forest Authority consists of, inter alia:
-        3 national departmental heads or their nominees;
-        president of the Forest Industries Council;
-        a person with the appropriate experience in commerce and finance;
-        a person representing non-governmental organisations concerned with environmental, social and development issues;
-        4 members, 1 from each region of the country, to represent the provincial governments of the region appointed;
-        chief executive of the National Forest Service.
The previous Forest Department and the divisions of forests under each of the provincial departments are a single-line forest authority comprising the National Forest Board and the provincial forest management committees for each province. Under s 22 of the Forestry Act, a Provincial Forest Management Committee shall consist of:
-        a senior officer in the administration of the province, who would be the chairman of the committee, nominated by the Provincial Government;
-        the president of the local or community government in the area of the forest resources, nominated by the provincial executive;
-        2 persons from the area of the forest resource in question, nominated by the committee;
-        1 person to represent the non-governmental organisation concerned with environmental, social and development issues.
The Provincial Act purports to provide for the control of forestry operations within East New Britain Province by requiring the submission of a Forestry Operations Development Plan to the Provincial Executive Council and the approval of that plan by the Provincial Executive Council before any person can carry out forestry operations within East New Britain Province. Thus, having completed the procedures under the Forestry Act, any permit holder intending to operate in East New Britain is then required to submit a Forestry Operations Development Plan under s 3(1) of the Provincial Act for approval by the Provincial Executive Council. Section 2 requires the production of copies of documents such as timber permits and licences and any agreements relating to forestry operations. "Timber permit" or "licence" is defined under s 1 of the Provincial Act to mean any timber permit or licence issued to a person under any law of the National Parliament relating to forestry. 
Any person who operates without meeting these requirements would be operating illegally in the province and subject to the penalty of fine or imprisonment and to have any logs or timber harvested therefrom to be seized and forfeited to the East New Britain Provincial Government. By s 5 of the Provincial Act, an officer of the Department of East New Britain, upon instructions from the Provincial Executive Council, may lay informations and conduct prosecutions for offences under the act, and by s 6, the Provincial Act applies to all persons, irrespective of whether they were granted a timber permit or licence before the commencement of the Provincial Act.
The Forestry Operations Development Plan must deal with the following matters (by s 3):
(i)       the ways in which the person will promote community and rural development in connection with, and as a result of, the forestry operations;
(ii)      the ways in which the person will improve transportation facilities;
(iii)     the steps which the person will take to ensure that wild-life will be adequately protected;
(iv)     the ways in which employment will be created for people domiciled in East New Britain Province;
(v)      the steps the person will take with regard to reafforestation;
(vi)     the proportion of harvested trees which the person will have sawmilled and available for sale within East New Britain Province and the ways in which the person will ensure that further downstream processing of sawn timber will be carried out within East New Britain Province;
(vii)    such other matters as the Provincial Executive Council may prescribe in regulations.
Having outlined in general terms the ambit of both acts, we turn to a consideration of their consistency.
The legislative powers of provincial governments are defined in Part VI of the Organic Law. By s 20(1), a provincial legislature has full legislative power, within the limits allowed or imposed by the Organic Law and the other national Constitutional Laws to make laws for the peace, order and good government of the province. As already outlined, "forestry" is defined by s 27 of the Organic Law to be a "concurrent" subject, and "concurrent" legislative powers in relation to inconsistency are regulated by s 28 of the Organic Law in the following terms:
"Section 28.   Legislative powers of the provinces
(1)      A provincial legislature may make a law with respect to a subject or subjects to which this Division applies, that shall have effect so far as it is not inconsistent with any Act of the Parliament;
(2)      For the purposes of Subsection (1), a question:
(a)      whether or not a provincial law is a law with respect to a particular subject to which this Division applies; or
(b)      whether or not a provincial law is inconsistent with an Act of the Parliament, is non-justiciable except at the instance of the National Government or of a provincial government"
Because this reference is by a provincial government concerning the inconsistency or otherwise of its law and as the referor is a competent authority within the meaning of s 19(3)(e b), the matter is clearly justiciable.
It appears that the meaning of "inconsistent" in s 28 of the Organic Law has not previously been considered by this Court. In other jurisdiction such as Australia, the Courts have considered and applied tests of inconsistency in various ways. For the purposes of s 109 of the Australian Constitution, a test known as the "cover the field test" has found favour (See Ex parte McLean (1930) 43 CLR 472; Clyde Engineering v Cowburn (1926) 37 CLR 466). This test was described by Dixon J in McLean's case (supra) in the following terms:
"'Inconsistency ... depends upon the intention of the paramount Legislature to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed. When a Federal statute discloses such an intention, it is inconsistent with it for a law of a State to govern the same conduct or matter."
This test is now applied in our jurisdiction, for the above definition of the intention of the legislature to set out "completely, exhaustively or exclusively" is adopted and expanded by s 23 of the Organic Law in defining the meaning of exhaustive laws within Part VI of the Organic Law, which includes s 28. Section 23 is as follows:
Division 2.      Technical Definition
"23.    Exhaustive laws
(1)      For the purposes of this Part, a law is exhaustive in relation to a matter if it shows, by reason of:
(a)      its subject matter; or
(b)      the method of dealing with the matter that has been adopted by it or by any other law that should be considered with it; or
(c)      the form or complexity of it or of any other law that should be considered with it, that the legislature has intended to set out completely, exhaustively or exclusively;
(d)      the statutory requirements of the matter; or
(e)      the statute law to govern the matter; or
(f)      the policy of the matter.
(2)      The operation of Subsection (1) is not affected by reliance placed by the law on:
(a)      any principle or rule of the underlying law; or
(b)      any other statute, for purposes of definition or interpretation, or for procedural, evidentiary or other ancillary or adjectival purposes.
(3)      For the purpose of this section, a statement in a law that it is or is intended to be exhaustive is not conclusive on the point.
(4)      The fact that a law is exhaustive in its relation to a matter does not of itself involve inconsistency with any other law."
In applying such a definition, it is our view that the Forestry Act is an exhaustive law in the field of national forestry legislation and that the general intent of the Provincial Law is inconsistent with it.
Firstly, the subject matter of the Forestry Act is the nation's forest resources and environment. The legislature has dealt with this matter by declaring the act to be in the national interest. Thus, s 1(2) provides that:
"Section 1(2). For the purposes of s 29 of the Organic Law on Provincial Government, it is hereby declared that this Act relates to a matter of national interest."
The term "national interest" is not defined. As already outlined, s 29 of the Organic Law provides that the National Parliament shall not make an act on a concurrent subject (which includes forestry) except in a matter of national interest and to the extent that it is of national interest. This question is non-justiciable. It was submitted that s 29 may have a limiting or fettering effect on the legislative power of the National Parliament but, in our opinion, this is not so due to s 100(3) of the Constitution, which provides that nothing in any Constitutional Law enables or may enable the Parliament to transfer permanently, or divest itself of, legislative power. "Constitutional Law" is defined under Sch 1.2 of the Constitution to mean, "this Constitution, a law altering this Constitution or an Organic Law". Consequently, the question of what is in the national interest remains non-justiciable. Schedule 1.7 of the Constitution provides that, where a Constitutional Law declares a question to be non-justiciable, the question may not be heard or determined by any court.
It was submitted that s 114(3) of the Organic Law gives an element of pre-eminence to provincial laws and that recourse could be made to the courts for a final determination of what is in the "national interest". Section 114(3) provides "that as soon as practicable after receiving a request from a provincial government to do so, the National Executive Council shall take whatever action is in its power to secure the repeal, in relation to the province, of a law dealing with a subject to which Division VI.4 applies (that is the concurrent subjects) to the extent that it does not concern matters of national interest". Reliance was placed on an unreported judgment of Brown J in Jaha Development Corporation Pty Ltd v Ilagi, a decision given on 20 December 1990. In the course of his judgment, His Honour noted as follows:
"Section 114(3) Organic Law on Provincial Government implements in an attenuated form, the obligations of the national government undertaken in the Bougainville Agreement not only to respond positively to a request for the repeal of national laws but also that existing national legislation covering subjects on the concurrent list of legislative powers shall be repealed by the national government if such legislation does not concern matters of national interest (Part I Clause 13; Schedule A, Clause 3). Significantly, s 114(3) is not made non-justiciable, nor is its wording such as to leave the final determination of what is 'national interest' to the subjective assessment of the NEC. Consequently, a province desiring to edge out a national law by its own legislation, can seek the assistance of the Courts, Y P Ghai and A J Regan; IASER discussion paper No 56, Papua New Guinea".
However, the interpretation of s 114(3) has not been fully argued on this reference and, in any event, there was no such request made in this matter by the provincial government to the National Executive Council to repeal any part of the Forestry Act, so that the matter does not properly arise on the facts of this reference.
The form and complexity of the Forestry Act clearly show that a new forestry administrative structure has been established and that it applies nationally. That structure, which we have detailed, must, on any reading show that the national legislature set out to legislate exhaustively in respect of forestry control and development throughout Papua New Guinea. That is reinforced by the National Forest Policy, which we are bound to consider under s 23(1)(f) of the Organic Law.
The National Forest Policy was the result of collaboration and effort between the National Government, provincial governments and the forest industry. It received the National Executive Council's approval on 30 April 1990, and in July of the same year it was tabled in the Parliament as a white paper. The policy is stated to have been designed to remedy the shortcoming of the previous policy (1979), to address the recommendations of the Barnett Forest Industry Inquiry (1989) and the World Bank Review (1990), as well as to adjust to new situations in the forestry and forest industry sectors. This policy culminated in the Forestry Act, passed in July 1991.
Whilst the policy recognises that provincial governments may pass complimentary laws dealing with provincial forestry matters, it requires that this be done through a consultative process. The key policy is that there shall be a unified National Forest Service to implement the National Forest Plan, the National Forest Development Programme, and to enforce forestry legislation. All of these policies are now founded in the Forestry Act which, in our opinion, was intended to set out exhaustively the statutory requirements as a matter of national interest. The Provincial Act appears to have been enacted without the necessary consultation between both levels of Government.
It is true that the Forestry Act may not be exclusive, as there is a recognition that provincial governments may pass complimentary laws dealing with provincial forestry matters and that, by s 23(4) of the Organic Law, the fact that a law is exhaustive in its relation to a matter does not of itself involve inconsistency with any other law. But the Provincial Act, in its subject matter and in its stated aims or intent, is an act "to provide for the control of forestry operations within East New Britain Province". That is clearly inconsistent with the Forestry Act. It grants control of forestry operations within the province to the Provincial Executive Council by requiring the submission of a forestry operations development plan before any person can carry out forestry operations within the province. Failure to do so means that a person would be operating illegally and would be subject to the penalty of fine or imprisonment and to have any logs or timber seized and forfeited to the provincial government. This applies irrespective of whether a timber permit or licence has been granted under the Forestry Act.
The Provincial Act is titled the Forestry Operations Control Act. The policy of the East New Britain Provincial Executive Council clearly reflects the intent of taking control of logging operations for itself and away from national control. It reflected dissatisfaction with the province's representation on the National Forest Board and a belief that the Provincial Forest Management Committee would have little power or influence The stated aim of the Provincial Act was, for these reasons, to usurp control of forestry matters within the Province to the Provincial Executive Council. The Forestry Act encompasses that all persons interested in forestry operations shall participate in the decision making process, that is the National Government, the provincial government, the forest industry, non-governmental organisations and the concerned landowners. The requirements of the Forestry Operations Development Plan are all matters which are contained within the Forestry Act and are to be provided for within the National Forest Plan and through the provincial forest plans. All of these matters are provided for in the national structure and procedures for regulating all forestry operations and, consequently, the subject matter of the Provincial Act and the manner in which it deals with those matters is inconsistent with the Forestry Act.
For all of these reasons, it is our opinion that the Forestry Operations Control Act 1992 of East New Britain is inconsistent with the Forestry Act. We answer the questions as follows:
Question A:    Yes, but only to the extent that it complies with s 28 of the Organic Law on Provincial Government;
Question B:    Yes. The Forestry Operations Control Act 1992 of the East New Britain Provincial Government is inconsistent with the Forestry Act (No 30 of 1991) of the National Parliament;
Question C:    The Forestry Operations Control Act 1992 of East New Britain is invalid and unconstitutional;
Question D:    Not answered.
Lawyer for the applicant: Graham Powell.
Lawyer for the respondent: Solicitor General.