Controversy flares over Jones Act ships

Controversy flares over Jones Act ships    The Coast Guard has confirmed a decision made earlier this year that foreign components being incorporated into new tankers being built at the Aker Philadelphia Shipyard will not prevent the ships from operating in the Jones Act cabotage trades.
   Rear Adm. B.M. Salerno wrote in a letter dated Nov. 15 to an attorney for the Metal Trades Department, AFL-CIO and Philadelphia Metal Trades Council of the AFL-CIO that he had decided to deny an appeal by the two labor groups of the May determination by the Coast Guard’s National Vessel Documentation Center (NVDC) that the ships were eligible to trade along the coasts.
   Ronald Ault, president of the Metal Trades Department, said the Coast Guard’s decision was not surprising and that his union would pursue the matter in the courts.
   “We expect that from the Bush administration,” he said. “We have never seen a more anti-United States business administration in our life.”
   The unions are upset because of the level of foreign-built components they say the shipyard is using to build the ships.
   “This is nothing more than a ‘paint-by-numbers’ prefabricated Korean ‘kit ‘ ship,” Ault complained.
   In his letter, Salerno said: “Use of equipment modules does not contravene the regulatory requirement that vessels seeking coastwise trade endorsements be assembled entirely in the United States.
   “The fact, as you have argued, that some of this manufacturing or ‘preassembly work’ could, or might, have been done in the United States is also not the salient issue in the reasonable administration of this regulatory requirement,” Salerno wrote.
   “To make it so might well require, if taken as literally as your argument would permit, that every nut or bolt incorporated into a vessel, or into any of its outfit or equipment, undergo ‘assembly,’ or ‘preassembly,’ in the United States,” he said, adding that such a concept “has never been accorded that breadth.”
   Meanwhile, in a separate dispute, the Shipbuilders Council of America and Pasha Hawaii Transport Lines have filed a lawsuit in U.S. District Court in Alexandria, Va., against the Coast Guard and the NVDC over its approval of a plan by Matson Navigation Co. to modify one or more of its older containerships into combination ships that can carry roll-on/roll-off cargo or containers.
   Modification of the ship would be done in both U.S. and Chinese shipyards.
   The ships would compete with Pasha’s “Jean Anne,” which was built in 2005 in Mississippi.
   The NVDC had determined that work being done in China would involve adding 6.7 percent of the vessel’s existing steel weight and therefore “falls within the regulatory threshold defining clearly permissible work.”
   But the Shipbuilders Council and Pasha said the NVDC ignores demolition work being done on the vessel in China, which when added to the new steel, involves work on 12.3 percent of the vessel’s steel weight. And additional work is being done in a U.S. yard as well.
   The NVDC ruling, which would allow the ship to trade coastally “is contrary to the clear and unambiguous language in the second proviso of the Jones Act, and is arbitrary and capricious, and abuse of discretion and without adequate explanation,” the Shipbuilders Council and Pasha allege.