Section Front Front Page |
 |
|
S.1510 Would Encourage Jones Act Opponents
| |||
| Maritime Cabotage Task Force Warns Of 'Potentially Dramatic' Implications For Cargo | |||
That warning came from the Maritime Cabotage Task Force in response to the legislation-S.1510, introduced Aug. 5 by Sen. John McCain (R.-Az.). S.1510 would sack the 1886 Passenger Vessel Services Act, which holds cruise operations between U.S. ports for vessels owned, built, flagged, and manned in the U.S. The Jones Act applies the same restrictions to merchant vessels in domestic cargo markets. Specifically, S.1510 would allow the U.S. reflagging of foreign-built cruise ships for immediate domestic service and grant foreign-flag vessels access to U.S. point-to-point routes. A clause in the bill stated that S.1510 would neither repeal nor amend the Jones Act. But, in a Sept. 1 letter to members of the Senate Commerce, Science, and Transportation Committee, the task force said S.1510's "implications for cargo carriage ... are potentially dramatic." The letter-signed for the task force by Edmund B. Welch, legislative director of the Passenger Vessel Association-charged that S.1510 "attacks the very principles that form the foundation of the Jones Act," including exclusive U.S. accommodation of domestic trade and "the fundamental requirement that vessels operating in American domestic commerce abide by all U.S. laws." Altering those principles through S.1510 would by logical sequence have an "unmistakable" impact on the Jones Act, the task force letter said. S.1510 would junk those principles "in the broadest manner possible on the basis of virtually no showing of need or of an inability to meet those needs under existing law employing either coastwise qualified U.S. vessels or foreign vessels as permitted by those laws," the letter continued. "Heretofore, Jones Act waivers have been limited to clearly defined situations or for national defense or to meet declared energy emergencies. S.1510 would lower those standards dramatically." The task force also pointed out other flaws in the bill, including its "failure" to meet its stated purpose-continued growth of the American-flag cruise ship fleet. "Such growth can be achieved without turning over this important part of the maritime industry in the U.S. to foreign interests for the next 10-15 years, with no guarantee that at the end of that time there would be a U.S. industry employing U.S.-built ships and American crews to carry American passengers between American ports." S.1510 "provides greater domestic cruising opportunities for foreign ships, with foreign crews, operated by foreign-owned companies often beyond the reach of U.S. law and regulation," the letter continued. "The ability of foreign ships to operate outside U.S. law is of great concern to the task force, as we are certain it is to you as well. Recent events in the domestic cruise industry in the U.S. demonstrate that it is not necessary that we further expand the role of foreign ships and crews to ensure continued growth in that industry." A particularly troublesome deficiency in S.1510 is its failure to subject foreign-flag cruise ships operating in U.S. waters to all U.S. laws and regulations. U.S. lawmakers, the media, and the public at large are now more aware than ever that U.S.-based foreign-flag cruise lines are exempt from most U.S. laws, and that the few applicable statutes are difficult to enforce because the vessels are registered overseas, the task force observed. "The application of laws issue cuts to the core of S.1510's stated intent to stimulate the U.S.-flag passenger fleet," the letter said. "Current law, which exempts foreign cruise vessels from most U.S. legal requirements, gives those foreign vessels an extraordinary competitive advantage over U.S. vessels, which must comply-any real attempt to stimulate the U.S. passenger fleet must begin by seeking ways to level the competitive playing field between U.S. and foreign vessels. Unfortunately, S.1510 fails to address this application of U.S. law issue in any way." Cabotage waivers in the past have been "narrowly drawn" and "extremely limited in scope" to meet "well-defined" need, the task force said. But waiver authority under S.1510 is wide-so wide that "potentially hundreds of foreign vessels and crews" would be able to operate on coastal routes for up to 200 days each in regularly scheduled service or for up to two weeks while "repositioning" or on private charter. If half of the estimated 120 U.S.-based foreign-flag cruise ships offered domestic itineraries through the 200-day window in S.1510, "the U.S. domestic trade would be swamped by more than 10,000 foreign cruising days between now and 2007." S.1510 would permit foreign-flag cruise ships to operate "inside U.S. domestic commerce but outside the jurisdiction of U.S. laws," including tax and labor statutes, the task force added. "It is analogous to allowing a factory to operate in the U.S. wholly exempt from U.S. immigration law, basic American labor and employment law, and other requirements-a practice that would never be tolerated." An "undefined body of laws" would be applied under S.1510, and the Secretary of Transportation would have up to six months following enactment of S.1510 to determine operating standards. The task force said the procedure could lead to "years of courtroom challenge." Finally, S.1510 would not generate a large U.S.-flag cruise ship fleet, the task force said. Nor would the bill provide "incentives" for U.S..-flag cruise services. "More likely, foreign vessels with their competitive advantages would overwhelm U.S. cruise markets at the expense of U.S. vessels-S.1510 would provide incentives for companies to operate foreign vessels instead of building American vessels." S.1510 would provide limited and ambiguous "protections" for U.S.-flag cruise ship operators and a faulty "bumping" system that would not be clearly defined until "long after enactment," and there would be no requirement that foreign-flag cruise lines intending to remain in domestic service after Dec. 31, 2006 sign contracts to build U.S.-flag ships in U.S. yards. A "plan" for such new construction would suffice under S.1510, and-even with a signed shipbuilding order-"the foreign ship could continue to operate in U.S. domestic commerce until 2013, assuming four years are required to build the new ship and for two years beyond that date." The task force said: "Because S.1510 specifies no date certain by which a contract for U.S. construction must be entered into to continue operating in the U.S., these foreign-built ships could operate freely in domestic commerce for any number of years after that date. "Moreover, nothing in S.1510 prevents a foreign vessel operator from enjoying the exemptions until 2007 and then dropping the all-domestic itineraries envisioned by S.1510, but continuing to serve select U.S. ports as part of its foreign cruises, as they can already do under the law as it now stands-in short, exploiting the U.S. domestic market for seven years, then leaving before any commitment for U.S. crewing or construction arises." The Washington-based Maritime Cabotage Task Force represents several hundred sea, air, rail, and road transportation industry and labor groups promoting continued enforcement of the Jones Act, the PVSA, and other cabotage laws. AMO participates in the task force. | |||
 | |||
|
