The move has made the country into an executive dictatorship, the opposition said.
The government's move is being interpreted as a broadside against the nation's Chief Justice, Sir Salamo Injia, following the leaking of court documents and the quashing of an investigation into his financial dealings.
The law, introduced on Tuesday and passed three times by a vote of 63/7 yesterday, gives PNG's parliament the power to refer a judge to the governor-general, who in turn must appoint a tribunal to investigate the judge, who would be suspended from duty.
Australian-born Opposition Leader Dame Carol Kidu is in little doubt the government will move quickly to oust Sir Salamo.
"I think that will happen very quickly," she said yesterday.
"If checks and balances are not working, we're in an executive dictatorship," she said.
"It is not in the interests of PNG remaining a truly democratic country. We will have judges afraid to toe the line."
The government says the law will "promote the integrity of our legal system based on the principle that an independent, fair and competent judiciary shall interpret and apply the laws that govern us".
It lays out a set of nine "impartiality" rules judges must obey, the breaching of which will allow parliament to make a referral to the governor general.
Deputy Prime Minister Belden Namah in a newspaper advertisement on Monday accused two judges, Nicholas Kirriwom and George Manuhu of "judicial corruption", and called on them and the chief justice to resign.
One MP, Andrew Kumbakor, expressed outrage over the passage of the bill.
"It is ridiculous that an independent arm of government should be singled out in this instance while public servants and members of parliament do not have an act of parliament as such to scrutinise their behaviour and conduct in public office that forces them to stand down from their duties," he said.
"Until the full implications of this bill are understood and proper public debate takes place, I will seek further legal advice and will take ensure a stay order on the implementation of the bill is in place until we assess the constitutionality of the bill's passage."
Since the government of Peter O'Neill took office on August 2, 2011, it has locked horns with Sir Salamo.
It tried three times to have Sir Salamo removed from overseeing the five-man bench constitutional hearings into whether previous prime minister Sir Michael Somare was legally dumped from office.
When that failed, and about a month before Sir Salamo handed down a 3/2 decision ruling in Sir Michael's favour, he ordered the deputy prime minister Belden Namah and attorney general Allan Marat arrested.
The pair were charged with contempt after they first aired allegations into the alleged financial misconduct and tried to suspend the chief justice.
Police formally arrested Sir Salamo two weeks ago and charged him with attempting to pervert the course of justice over an investigation into his handling of 213,000 kina ($94,000) meant for the son of a dead judge.
AAP
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