U.S.-flag operators say Jones Act isnÆt enforced
Representatives for U.S.-flag vessel operators engaged in the offshore energy business told House lawmakers that foreign-flag operators often slip in and out of coastal waters without consequence.
Section 27 of the 1920 Merchant Marine Act, better known as the Jones Act, requires vessels carrying people and cargo from or between U.S. ports in coastal waters to be American-built, owned, operated and crewed.
'Despite our great history, it is not a foregone conclusion that U.S.-flag vessels will work in the Gulf of Mexico,' testified Ken Wells, president of the Offshore Marine Service Association (OMSA) to the House Subcommittee on Coast Guard and Maritime Transportation on Thursday.
'We have become very concerned that the Jones Act is being significantly degraded and that the numbers of foreign-flag vessels in the offshore energy sector is increasing,' he said. 'We find that many of these vessels are blatantly ignoring the Jones Act. Worse, we find that the agency charged with enforcing the Jones Act — Customs and Border Protection in the Homeland Security Department — has failed to live up to its responsibilities to enforce the law and to interpret the law as Congress intended.'
Two years ago OMSA, which represents more than 250 member companies, hired a full-time investigator to track foreign vessels in the offshore energy sector. Based on findings, OMSA estimates that there are about 85 foreign vessels working in the offshore energy sector on a regular basis. Another 60 foreign vessels have worked in the Gulf in the last few months, according to OMSA, but have since departed for other markets. OMSA acknowledged that some of these foreign vessels are drilling vessels, which are allowed by law since they do not transport merchandise.
Wells said both CBP and the Coast Guard lack the tools to adequately track foreign vessels and hold them accountable for Jones Act violations. OMSA has found cases where foreign vessel operators working in the Gulf routinely shut off their AIS (automatic identification system) transponders, equipment they are required by law and international agreements to use for both safety and security reasons. Turning off these devices makes it harder to monitor their activities.
OMSA said some CBP field units have been willing to pursue potential violators of the Jones Act. 'The problem appears to be with CBP headquarters, which has failed to support their field units with guidance or approval,' Wells said in his testimony.
'Two of our complaints are more than a year old and have yet to see action,' he said. 'As with the offshore reporting requirements, DHS has been unresponsive to numerous requests on the status of the complaints.'
The U.S. government has granted some Jones Act waivers in recent weeks for foreign vessels with specialized equipment to help with the BP oil spill cleanup in the Gulf of Mexico. However, according to the Maritime Administration, 77 percent of the vessels involved with the effort so far are U.S.-flagged.
'Even though 23 percent of the vessels responding to the oil spill are not U.S.-flag, none of these are known to be in violation of any U.S. law or regulation,' David T. Matsuda, acting maritime administrator, told the subcommittee. 'Vessels that do not call upon points in the United States are not in violation of the Jones Act.'
U.S.-flag vessel proponents say the Jones Act offers the American public a layer of safety and security that foreign-flag vessel operators lack.
'Our vessels operate under strict and extensive Coast Guard standards; they are well-built, well-maintained, and crewed by well-trained American officers and crew,' said James H.I. Weakley, president of the Lake Carriers' Association, in testimony on behalf of the Maritime Cabotage Task Force. 'The regulations advanced and enforced by the U.S. Coast Guard on our vessels are the most effective and demanding in the world.
'Additionally, because our vessel operators are liable under U.S. laws and regulations for failures in performance, they are highly penalized by their insurance underwriters and by demanding charterers if they attempt to cut corners or run a slipshod operation,' he said. ' Chris Gillis