Monday, November 15, 2010

Monday Morning Mariner: Jones Act Update

It is necessary for the national defense and for the proper growth of its foreign and domestic commerce that the United States shall have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in time of national emergency, ultimately to be owned and operated privately by citizens of the United States. --Merchant Marine Act, 1920

It is important for Presidents to support the Jones Act…I have…supported the Jones Act and will continue to do so as President. --President George W. Bush (2006)

The Jones Act is a vital part of our national defense and supports American workers. As President, I would fully enforce it. The Jones Act should be waived only under rare circumstances… Furthermore, maintaining the American merchant marine fleet is vital to our economy and national security. I would oppose any move to undermine this Act. --Senator Barack Obama of Illinois (2008)

Today I am pleased to introduce legislation that would fully repeal the Jones Act, a 1920s law that hinders free trade and favors labor unions over consumers. --Senator John McCain of Arizona (2010)

A media and public uninformed about the maritime world is one of the reasons I started this blog, and the need for it was never more evident than in recent coverage of the Deepwater Horizon oil spill and how clean up efforts were hindered by the Jones Act (for a primer on the Jones Act, see my post Keeping Up With The Jones Act, Part 2). Among the mainstream news outlets getting it wrong were the Christian Science Monitor (see its coverage here) and The Wall Street Journal (see its coverage here). As Transgov Consulting's Richard M. Biter wrote in the August issue of Marine Log

[The] perception that is coming through to the public is that the US has received a large number of offers for assistance from the international maritime community but some obscure 90-year-old law is stopping help from coming to the rescue.

At the time Biter wrote, there were fifteen foreign-flagged vessels assisting with the cleanup, but none required a Jones Act waiver. When all was said and done, the US received help from six different countries or international organizations for the Deepwater Horizon cleanup.

The Jones Act does not unilaterally stop foreign-built vessels from operating in US waters but requires that, for the most part, cargo and passengers carried between US ports be carried on ships 1) built in the US, 2) crewed by American merchant mariners, and 3) registered and flagged in the United States. The Act does make some exceptions. Vessels captured as prizes in war, forfeited by law (such as in drug seizures), or recovered from wrecks may qualify for a coastwise endorsement whatever their origin. In some cases, a foreign-built vessel extensively refitted in a US shipyard may qualify. The US president has the authority to grant exemptions in specific circumstances, such as George W. Bush did following Hurricane Katrina. In the case of oil spills, US law specifically grants an exception in 46 US Code section 55113:

Notwithstanding any other provision of law, an oil spill response vessel documented under the laws of a foreign country may operate in waters of the United States on an emergency and temporary basis, for the purpose of recovering, transporting, and unloading in a United States port oil discharged as a result of an oil spill in or near those waters, if

(1) an adequate number and type of oil spill response vessels documented under the laws of the United States cannot be engaged to recover oil from an oil spill in or near those waters in a timely manner, as determined by the Federal On-Scene Coordinator for a discharge or threat of a discharge of oil; and

(2) the foreign country has by its laws accorded to vessels of the United States the same privileges accorded to vessels of the foreign country under this section.

The Open America's Waters Act. On June 25 of this year, Senator John McCain introduced a bill that would change the wording in the Merchant Marine Act of 1920. McCain has long been a Jones Act critic, saying the Act puts an undue burden on consumers in Hawaii, Alaska, and Puerto Rico. He said in 1997, “I would like to see the Jones Act repealed, but I don’t think that’s likely. I don’t think I would get twenty votes if I were to bring it to the floor.” With Obama remaining President for two more years and Democrats retaining control of the Senate in this month's elections, it's unlikely the Open America's Waters Act will even come up for a vote, let alone pass.

If it were to become law, McCain's act would remove the requirement that a ship be built in the United States to be issued a coastwise endorsement. It would not be a full repeal of the Act, however, and other provisions of 46 US Code would remain in place. McCain's proposal would not change the Cargo Preference Act which requires that US government-sponsored cargos be carried (at least in part) on US-built vessels. Current immigration law and merchant mariner documentation and licensing laws would also remain the same.

Reporter Dave Michaels of The Dallas Morning News did a great job getting the story straight here.

Richard M. Biter's op/ed piece "Jones Act: Death or Rebirth" which originally appeared in Marine Log can now be found at here.

Find the complete text of the Open America's Waters Act at Senator McCain's website here.

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