HANSA 12-2017

Schifffahrt | Shipping
Humanitarian »threat« to Jones Act
2017 saw an unprecedented weather pattern, in the form of Atlantic Ocean hurricanes,
which disrupted supply chains on land and at sea. These upheavals focused all eyes on the
future of the Jones Act – a nearly 100 year old set of regulations. By Barry Parker
In normal times, maritime trade between
U.S. ports (including Alaska
and Hawaii, but also Puerto Rico) is reserved
for »Jones Act qualified« vessels
built in U.S. yards, owned by U.S. interests,
and crewed by U.S. mariners. However,
in times of unusual circumstances
– such as hurricanes and other natural
disasters, the U.S. Department of Homeland
Security is permitted to waive the
Jones Act, thereby allowing non Jones
Act vessels into specified trades. The legalities
of waivers are highly complex,
and are subject to interpretation.
In 2017, three waivers were issued. The
disruption of the tanker trades by Hurricane
Harvey (late August) and Hurricane
Irma (early September) brought
about two waivers (issued Sept 8 th and
11 th), while the need to move supplies
to Puerto Rico after Hurricane Maria
brought about a third waiver (issued
Sept 28 th). In all three cases, the waivers’
timeframes were temporary, their
durations ranged from 7 to 11 days.
The events are all history now, the
waivers have expired. The conditions
giving rise to the first two waivers (related
to movement of refined oil products
on tankers) no longer exist. Refineries
in Texas have re-opened, landside pipeline
movements have resumed, and vessels
no longer sheltering from storms are
back on their normal voyage routings.
The deleterious situation with Puerto
Rico, in contrast, is ongoing, with a painfully
slow process of returning to normalcy;
there are also questions about the actual
legality of the Sept 28 th waiver, which
was only issued after extreme political
pressure was placed on the Trump administration.
Lawyer Charlie Papavizas, Partner
at Winston & Strawn, explains the difference
among waivers, telling HANSA:
»The period of time type general waivers
– which really started with Hurricane Katrina
in 2005 – have mostly focused on the
movement of petroleum products. Similar
waivers were granted after Hurricanes
Rita, Sandy and Harvey. The Hurricane
Maria waiver followed that pattern, but
covered all products, which I think is unprecedented.«
And then, there is the tie
to national security and safety, with Mr.
Papavisas saying: »The only way to waive
the Jones Act administratively, meaning
other than by an Act of Congress, is via a
1950 law. That law requires that it be in the
»interest of national defense« to waive the
law (or any other navigation law).«
Another expert on Jones Act matters,
Michael Cavanaugh, Partner in the Washington,
D.C. offce of Holland & Knight,
expressed concerns about the legality of
the waivers. He explained: »The statute,
46 U.S. Code §501 states waivers may
only be granted in two situations: (1) On
request of the Secretary of Defense, the
Secretary of DHS »shall waive compliance
with those laws to the extent the Secretary
considers necessary in the interest of national
defense.« Or (2) If the Secretary of
DHS »considers it necessary in the interest
of national defense.« The Secretary of DHS
»following a determination by the Maritime
Administrator…of the non-availability
of qualified United States flag capacity
to meet national defense requirements,
may waive compliance with those laws
to the extent, in the manner, and on the
terms the individual, in consultation with
the Administrator, acting in that capacity,
prescribes.« We did not see any announcement
by the Secretary of Defense which
would have satisfied the first criteria.
»There does not appear to be a
legal basis for the waiver«
Mr. Papavisas, from Winston &
Strawn, offered his take on this aspect,
adding: »The interesting thing about the
Harvey and Maria waivers is that they
were undertaken under the provision
of the law that does not require a finding
that no U.S.-flag vessel capacity is
available for the movement or movements
which must be done by MAR-
AD. One can surmise that this was done
because such a finding was not likely to
be made.« Mr. Cavanaugh, from H &K,
elaborated further: »When the acting
DHS Secretary issued the Puerto Rico
waiver, there was also no announce-
22 HANSA International Maritime Journal – 154. Jahrgang – 2017 – Nr. 12