Dam blocked in Australia's hottest environmental dispute

Australia's hottest environmental disputes got even hotter this past week as Australia's high court signaled that the federal government here could block construction of a dam in one of the world's most beautiful wilderness areas.

The court's 4-to-3 majority decision allows the government to stop the building of a dam on the Gordon River in southwest Tasmania - a region on the World Heritage list of outstanding natural and cultural properties - over the objections of the Tasmanian government. The state government of Tasmania had promoted the dam, claiming it would provide cheap electricity and thousands of jobs.

The court's decision has repercussions beyond the conservation issue. ''It's the first big crack in the federation,'' said Queensland Premier John Bjelke Petersen, referring to the court's decision that the federal government could override state law on some issues.

Federal opposition leaders also condemned the decision. National Country Party leader Douglas Anthony said it ''effectively marked the end for the keystone of our federal system - the sovereign rights of the states - and perhaps even for the system itself.''

But conservationists applauded it. The president of the Australian Conservation Foundation, Murray Wilcox, called the decision ''probably the greatest victory for conservation ever.'' And the Tasmanian Wilderness Society, which had raised more than $1 million from both inside and outside Australia and campaigned heavily in the March national election against the dam, was thrilled.

The court held the federal government could ban dam construction on the basis of the federal government's constitutional powers over external affairs and over corporations. The court held that the government's power to make laws ''with respect to external affairs'' meant that it could implement an international treaty on the preservation of the environment, and override state laws which had approved the construction of the dam.

The state of Tasmania had held a statewide referendum, which showed the dam was favored there, although it was a narrow victory. Malcolm Fraser's Liberal federal government - turned out of power in March - had offered Tasmania $500 million compensation to build some other power plant instead of the dam. When the Tasmanian government refused that offer, the federal Liberals said they would not interfere further.

But the Labor Party promised it would stop the dam, and two months after the March election it passed a law forbidding the construction.

Tasmanians challenged the law in the high court, in an argument that extended over eight days. After three weeks' deliberation, the seven justices produced seven judgments.

Four of the justices rejected the argument that the federal government should not be allowed to interfere with decisions of the Tasmanian parliament.

Justice Sir Gerrard Brennan said it was not the high court's function to strike some balance between the federal and state governments - ''that would be to confuse the political rhetoric of states' rights with the constitutional question of Commonwealth legislative powers, the measure of which at any time is not referrable to the powers previously exercised by the states.''

The court's decision also makes it certain that the federal government will press ahead with a national bill of rights.

Federal Attorney General Sen. Gareth Evans said after the decision that a bill of rights would be based on Australia's ''clear-cut obligations'' under an international convention on civil and political rights.

Tasmanian Premier Robin Gray, who was in Canberra at the time of the decision to discuss federal compensation to the state, said the decision of the court would have far-reaching effects.

Government leaders in states controlled by the Labor Party did not express any disapproval, but warned their federal Labor government not to use its newfound powers to excess.

South Australian Attorney General Chris Sumner said, ''I don't think the federal government should see the decision as a mandate for wholesale intervention in the states.''

He warned that if the federal government proceeded ''overenthusiastically'' it would create a backlash based on states' rights.