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IMCA Comments on Potential Wide Sweeping Changes to Jones Act Decisions

Posted on February 6, 2017


Members of the International Marine Contractors Association (IMCA) with vessels active in US waters, together with their clients, have expressed serious concern over the hasty proposals by the Customs and Border Protection agency to revoke longstanding decisions made over the last 40 years concerning the Jones Act. These proposals, which represent a major change in maritime policy, have been introduced with no prior consultation, in the final two days of the Obama Administration, allowing only 30 days for public comment.

The intention is to prevent non-Jones Act qualified vessels transporting merchandise between coastwise points. However, the effect may be to prevent all foreign flag construction vessels working in the United States. The proposals would also affect US flag vessels which are not coastwise qualified.

“We understand the drive to protect US tonnage given the difficulties in the PSV market today, but the deep-water construction market represents a very different sector with very different vessels and technologies,” says IMCA’s Chief Executive, Allen Leatt. “It is a truly international market, as no single domestic market can support the heavy investments of these assets. Consequently, there is a real risk to damaging the whole Gulf of Mexico market as the unintended consequences do not seem to have been thought through.

“The Obama Administration attempted similar changes in 2009, but discontinued the effort in the face of serious and substantial concerns raised by a multitude of stakeholders. We are seeking an extension of time for public comment, so that a proper reflection and analysis of the impact can be assessed.

“Stability in the workings of the Jones Act has enabled many successful businesses to be established in the US Gulf States, both offshore and onshore, over the last 40 years, creating huge numbers of US jobs. Given the tough times our industry has endured in recent years, this additional risk to jobs is very concerning if oil companies are faced with a lack of capacity in the market and inevitably higher costs.

“The Trump Administration has called for a freeze pending a review of all regulatory initiatives; equally it is well known that President Trump is ambitious for the US to increase domestic production. These proposals seem to run contrary to both objectives.”