Supreme Court Rules Federal Interference in Provincial Forest Management Unconstitutional

Kathmandu. The Supreme Court's Constitutional Bench has interpreted the division of authority between the federal government and the provinces in the federal structure, declaring certain provisions of the Forest Act, 2076 unconstitutional, ruling that federal interference in the executive authority of the provinces is unconstitutional.

In a verdict on a writ filed by the Madhesh Province Government (Ministry of Industry, Tourism, Forest and Environment) against the federal government's decision to merge the Sagarmatha Forest Project into the Nepal Forest Corporation Limited, the Constitutional Bench comprising Chief Justice Prakashman Singh Raut and Justices Sapana Pradhan Malla, Kumar Regmi, Til Prasad Shrestha, and Binod Sharma clarified that the authority to manage national forests within the province and handle forest-related matters falls under the executive structure of the provincial government.

With this ruling, the authority to handle forest-related matters now rests with the Divisional Forest Officer appointed under the 'provincial government's executive structure' instead of the Divisional Forest Officer 'deputed by the federal government'. However, the Supreme Court dismissed another writ filed against the cabinet's decision to merge the Sagarmatha Forest Development Project into the Timber Corporation of Nepal, forming the Nepal Forest Corporation Limited. The court ruled that the project is of federal importance and only the management structure, not the ownership, has changed.

The writ was filed in the Supreme Court by the Ministry of Industry, Tourism, Forest and Environment of Province 2 government, alleging that the federal government had interfered with the rights of the province. It was argued that the Province 2 cabinet, in its meeting on Falgun 24, 2075 BS, decided to keep the Sagarmatha Forest Development Project under the provincial government and had provided 10 million rupees for its conservation in the last fiscal year and allocated another 10 million in the current fiscal year.

The Province 2 government brought the Sagarmatha Forest Project, spread over 13,132 hectares in Sarlahi, Mahottari, and Rautahat districts, under its jurisdiction through a cabinet decision on Falgun 24, 2076 BS. However, the dispute escalated after the central government rejected this decision. The Prime Minister's Office had decided on Jestha 23, 2076 BS, to merge the Sagarmatha Forest Project into the Timber Corporation, creating the Nepal Forest Corporation Limited.

It was argued that although Article 232 of the Constitution of Nepal clearly states that the relationship between the Federation, Province, and Local levels 'shall be based on cooperation, co-existence, and coordination,' no coordination was made when merging it into the Timber Corporation of Nepal.

In this case, the Supreme Court provided a detailed interpretation that the division of authority regarding forests between the federation, provinces, and local levels is based on a framework of 'cooperative federalism' rather than 'competitive federalism'. It concluded that 'the Constitution of Nepal adopts a constitutional structure that assigns the role of policy formulation to the Federation, the managerial role to the provinces, and the role of conservation and participation to the local levels and communities overall.'

Thus, it is appropriate to interpret the provisions mentioned in Schedule-6 as 'exclusive but not absolute provisions'. That is, the province has primary authority over the concerned subject, but this authority must be exercised in coordination with the overall framework of the Constitution, the scope of federal policy-making, and provisions related to concurrent rights.'

The court adopted the principle of 'cooperative interpretation' in situations where the rights of the federation and the province conflict. The court's interpretation is that the federation should formulate policy while the province manages, balancing these aspects, as the same subject matter can fall under the legislative authority of both federal and provincial levels from different constitutional perspectives.

The verdict states, 'The Constitution does not arrange for forest-related matters to be either entirely under federal control or to grant absolute monopoly to the provinces alone. Rather, it clearly expresses an intention to place them within a multi-tiered, cooperative, and functional federal structure, and envisions that the tiered roles of policy, standards, management, and conservation, though different, will be mutually complementary.'

The court clarified that while 'National Forest Policy' is the exclusive right of the Federation under Schedule-5 of the Constitution, 'management of national forests within the province' is the exclusive right of the province under Schedule-6. The verdict states, 'The National Forest Policy is the basis for guiding forest management within the province, and the province's management authority is the means of practical implementation of that policy. Since Article 57(2) of the Constitution clearly states that the exercise of provincial rights shall be 'in accordance with this Constitution and provincial law,' provincial management authority cannot be inconsistent with federal policy and the overall structure of the Constitution.'

The full text of the verdict states, 'If the daily administration, management, and decision-making process concerning national forests within the province are kept entirely under central control in the name of federal law, there is a risk that the provision in Schedule-6 will become merely formal and practically ineffective.'

'According to Article 57(2), Article 162(4), and serial number 19 of Schedule-6 of the Constitution, the national forest within the province and its management fall under the exclusive jurisdiction of the province,' the verdict stated. 'It appears consistent with the spirit of the Constitution for administrative and quasi-judicial authority directly related to such matters to remain within the executive structure of the province. Because the phrase 'deputed by the Government of Nepal' is used in the Forest Act, 2076, Section 2(j), a situation has arisen where officers are deputed only by the central executive structure for matters falling under the jurisdiction of the province. This creates a situation that practically renders the executive authority granted to the province by the Constitution ineffective.'

'The arrangement where the same administrative unit remains within the provincial government structure but its head is appointed by the federal executive does not appear consistent with Article 162(4) of the Constitution, serial number 19 of Schedule-6, and the concept of federal executive autonomy,' the full text of the verdict stated. 'Such a dual arrangement where the administrative structure and executive control are kept at different levels creates a risk of practically nullifying the executive authority of the province, which runs counter to the spirit of federal governance.'

Furthermore, the court considered the provision in the Forest Act, 2076, which grants quasi-judicial authority to prosecute and settle forest-related offenses to the Divisional Forest Officer deputed by the federal government, as interference in the executive authority of the province. The court explained, 'The national forest within the province and its management fall under the exclusive jurisdiction of the province. It appears consistent with the spirit of the Constitution for administrative and quasi-judicial authority directly related to such matters to remain within the executive structure of the province. Because the phrase 'deputed by the Government of Nepal' is used, a situation has arisen where officers are deputed only by the central executive structure for matters falling under the jurisdiction of the province. This creates a situation that practically renders the executive authority granted to the province by the Constitution ineffective.'

'The provision in Section 2(t) of the Forest Act, 2076, which includes 'National Forest' within 'National Forest within the Province,' must be interpreted in a manner consistent with the Constitution, such that wherever the term 'National Forest' is used concerning 'National Forest within the Province,' it does not nullify the management authority of the provincial government as per serial number 19 of Schedule-6 of the Constitution. 'It is not desirable that the classification is interpreted in a way that denies or curtails the constitutional management authority of the province,' it stated.

The court issued a directive order instructing that after the 'National Forest Policy' is issued, the provisions of the existing Forest Act, 2076, should be reviewed and necessary amendments made in line with the spirit of the federal structure, the executive authority of the provinces, and inter-level coordination, in light of that National Forest Policy.

The court adopted the principle of 'cooperative interpretation' in situations where the rights of the federation and the province conflict. The court's interpretation is that the federation should formulate policy while the province manages, balancing these aspects, as the same subject matter can fall under the legislative authority of both federal and provincial levels from different constitutional perspectives.

The Supreme Court declared certain words and phrases in the Forest Act, 2076, unconstitutional and void as they conflicted with the Constitution, and issued a mandamus and directive order in the name of the federal government. It stated, 'Since the terminology used in Section 2(j) and Section 67(1) of the Forest Act, 2076, including 'Government of Nepal,' appears to conflict with Article 57, serial number 19 of Schedule-6, and the spirit of the federal structure of the Constitution, the phrase 'deputed by the Government of Nepal as per prevailing law' used in Section 2(j) of the said Forest Act, 2076, and the terminology 'of the Government of Nepal' used in Section 67(1) of the same Act, are declared invalid and void from the date of this judgment pursuant to Article 133(1) of the Constitution of Nepal.'

'In order to maintain uniformity and consistency among the articles of the Constitution of Nepal, the federal government, while exercising its authority under serial number 27 of Schedule-5 of the Constitution of Nepal, should not curtail the constitutional rights of the concerned province, and in line with the spirit of the constitutional provision mentioned in Article 232 of the Constitution of Nepal, based on the principle of cooperation, co-existence, and coordination, the federal government should, without undue delay, issue a 'National Forest Policy' regarding the management of national forests within the province as per serial number 19 of Schedule-6 of the Constitution,' it also issued a directive order.

After the 'National Forest Policy' is issued, the provisions of the existing Forest Act, 2076, should be reviewed and necessary amendments made in line with the spirit of the federal structure, the executive authority of the provinces, and inter-level coordination, in light of that National Forest Policy.