U.S. Customs Agency Rules Against Jones Act Changes


#1

well here it is folks…us American mariners have truly been sold down the river by our own government acting as willing servants to the corporations. even the American owned OSV companies with their lobbying could not overcome the entrenched power of the IMCA and the API in their crusade and even they are now left nearly impotent to stop the status quo from going on in perpetuity. I honestly do not know if the corruption of it all can ever be made right unless it is done so by the Congress with a rewriting of the OCSLA and do not hold your breath for that to happen in our lifetimes. The Congress is no longer able to legislate for what is right and just…only what is profitable!

to me this is truly sickening…

U.S. Customs Agency Rules Against Jones Act Changes – Foreign-Flag Construction Vessels to Stay in GoM

May 10, 2017 by Mike Schuler

The U.S. Customs and Border Protection agency announced Wednesday it is withdrawing its notice of proposed modification and revocation of letter rulings related to its enforcement of the Jones Act, meaning there will be no changes to the coastwise law with regards to the current use of foreign-flagged vessels for certain offshore oil and gas operations in U.S. waters – at least for now.

The CBP’s proposed modifications and revocation of letter rulings, published in a Customs Bulletin just two days before President Obama left office, would have corrected certain aspects of the Jones Act by reversing long-standing rulings that have allowed non-Jones Act qualified offshore construction vessels to freely operate on the U.S. Outer Continental Shelf, most notably in the deepwater Gulf of Mexico.

Under the Jones Act, only a vessel that is built in the United States, owned by a U.S. citizen and crewed by U.S. mariners can participate in the transportation of cargo between two points in the United States.

The CBP said Wednesday that it received over 3,000 comments both for and against the changes during the open comment period, which closed April 18.

“Based on the many substantive comments CBP received, both supporting and opposing the proposed action, and CBP’s further research on the issue, we conclude that the Agency’s notice of proposed modification and revocation of the various letter rulings relating to the Jones Act should be reconsidered,” said CBP director Glen Vereb in the Customs Bulletin published May 10.

Oil and gas interests, such as the American Petroleum Institute, opposed the changes, arguing the proposed action would have caused “significant and damaging impacts” to offshore oil and natural gas activity in the United States. The basis of their argument was that the Jones Act fleet does not have the highly-specialized vessels needed for the work, hindering offshore oil and gas development.

“By rescinding the proposal, CBP has decided not to impose potentially serious limitations to the industry’s ability to safely, effectively and economically operate,” said Erik Milito, director of upstream and industry operations for the American Petroleum Institute.

But the proposed changes received strong support from domestic maritime industry stakeholders and several lawmakers in Washington, who argued that the ‘corrective action’ would have closed loopholes and restored American jobs.

In a statement, the Offshore Marine Service Association (OMSA) called the CBP’s decision “profoundly damaging” as it “puts foreign companies first and American companies and workers last.”

“Obliging to foreign interests, the Office of Management and Budget (OMB) recommended a regulatory review process that will significantly delay the lawful and correct enforcement of the Jones Act which requires good moving between one U.S. port and another be moved on vessels that are U.S. built, U.S. owned and U.S. crewed,” the Offshore Marine Service Association said in a statement Wednesday following the CBP’s decision. “This delay will only hurt American mariners and shipbuilders while continuing to benefit foreign vessels, shipbuilders and crews, domestically operating contrary to U.S. law.”

Matthew Paxton, President of Shipbuilders Council of America, agrees that the CBP’s decision will only hurt American workers.

“We are disappointed the Administration chose to indefinitely kick this job-destroying regulatory can down the road. The correct interpretation and enforcement of the Jones Act is critical to the capitalization of the commercial shipbuilding and repair industry, and its industrial base, which is crucial to U.S. homeland and national security. This Administration’s needless delay only hurts the more than 400,000 men and women of the U.S. shipyard industry,” Paxton said.

Tom Allegretti, Chairman of the American Maritime Partnership, called the decision “extremely disappointing” and called on President Trump to take action to restore jobs for U.S. mariners.

“The Administration’s decision today to delay the revocation of letter rulings impacting the lawful enforcement of the Jones Act in the Gulf of Mexico is extremely disappointing, said Paxton. “This delay and move to a regulatory review process will damage our American mariners and domestic maritime industry, which is essential for U.S. economic security and job creation. The domestic maritime industry calls on President Trump and his Administration to take immediate action to return these jobs to our American mariners.”

The CBP’s decision was also criticized by Majority Whip Steve Scalise (R-La.), who issued the following statement:

“I am very disappointed in the announcement today by US Customs and Border Protection regarding the Jones Act.
“CBP’s action taken earlier this year took positive steps to finally enforce our nation’s maritime border law, and correct decades of faulty private letter rulings that put foreign interests above those of American workers and American national security. In January, CBP was correct in announcing their view that many of these letter rulings were not consistent with or legal under the Jones Act. Unfortunately, it is mind-boggling why a new cumbersome regulatory process is necessary or even appropriate when the issue at hand simply involves the proper enforcement of existing law.
“While some foreign interests may take issue with the Jones Act, it is the law of the land and is in place to ensure that America can protect our borders while also ensuring that only US-flagged and crewed vessels can have access to our inland waterways so we can protect our national security. And to be clear, this is not just a coastal issue- if the Jones Act is undermined, foreign vessels and crews, even those who come from places that don’t share our American values, could have access to the deepest interior of our country via our waterways.
“I urge the Administration to tread carefully in this process and to thoroughly consider its implications on our national security, and I am committed to doing everything I can to make sure that the Jones Act isn’t undermined in this process.”

For more information, read gCaptain’s full coverage of the Jones Act Ruling Letters.


#2

You seem surprised that American mariners are getting shafted yet again. :unamused:


#3

Like I wrote not too long ago … the new administration will provide no end of examples of corporate ownership of government.


#4

An incentive to build or buy vessels able to compete for the jobs now being done by foreign vessels in the GoM??

There is no way the top end of the market (I.e. SSCVs like Tialf or the new Sleipnir, Large pipelayers a la Lorelay etc. or heavy lift vessels like Dockwise Vanguard or Xin Guang Hua: https://coscoht.com/semi-submersible/fleet/xin-guang-hua/ ) can be built for only a domestic US market, but at least something like the Normand Maximus picture in the gcaptain article MAY be possible.

To be able to compete worldwide, US-flag ships will have to be built and operated at cost level that is compatible with their competitors.
That can only happen if US yards modernize to compete for such contracts in an open and free market and US flag ships can be manned by US officers, foreign crews.

Correction; The vessel pictured with the gcaptain article is the Nordman Vision, a smaller vessel than the Nordman Maximus, but still more capable than anything offered by American owners.


#5

I certainly hope that any of you who somehow thought this new Administration was going to “make American great again” by restoring employment to US citizens over their foreign competitors see now that was all a huge dumptruck load of BS and can now see the reality that the American worker has no standing at all and is truly little more than an expendable commodity.

I am throwing in the towel and giving up here…there is not going to be any meaningful change in the GoM nor anywhere else for the foreseeable future. Jobs for American companies and American mariners are not important to this Administration nor to the US Congress. WE ARE ALL COMPLETELY AND UTTERLY FUCKED!


#6

I stuck this in the Harvey thread last night, maybe I should have started a new thread.
http://www.osjonline.com/index.htm


#7

It doesn’t matter who is in office money will always be the factor in policy changes. Who has more money than large oil companies? We all know that the bottom line is what drives everything regardless of what industry we discuss. They are saving money using cheap foreign labor on cheaply built foreign vessels or else they wouldn’t be expending this much effort on keeping things as is.

I hope one of these large trucking firms tries this business model one day. They build a fleet of brand new top of the line tractor trailers in some cheap labor foreign factory. Then have them delivered here and inspected and ready for work. Then they scour the globe for foreign truck drivers and bring them here and get a waiver to recognize their foreign CDL. All that’s left is to pay them $20 a day to drive the roads continuously for 4-6 months straight only stopping long enough to catch a nap in the sleeper cab.

The sad truth is no one gives a fuck about what we do for a living because they don’t know what we do. Our industry is for the most part out of sight out of mind. The only fleeting concern about us is when there is a catastrophe. Then we get the usual barrage of everything bad can be traced back to the evil Jones Act. If this was a more visible industry that the average person knew about we might stand a chance in getting people to understand what is happening. Probably not though.


#8

America First is a crock of shit. I’m not surprised one bit the way this Administration has gone, but it did seem like the CBP was going to go the other way. Why not just revoke the letter rulings and continue to issue waivers until Jones Act supply catches up with demand?

I also thought the US maritime industry argument was lacking. 3,200 jobs and a bunch of the same statements from the same players about how important the Jones Act is to national security and economy. And then one boat gets delivered all of a sudden the debate is supposed to be over? Is it though? Where are the numbers??


#9

The last administration wasn’t a friend of the maritime industry either. Remember what happened to PL480 program? Or how about all the STCW hoops that are going to create a personnel attrition on a grand scale? Or maybe you missed the whole medical regime that mariners are subjected to?

Fraqrat is dead on with his analysis. Our industry is simply too small and not in the public cone of view. The argument goes like this “why should a few thousand workers in the gulf take precedent of the energy needs of the whole country”. I know it’s BS, you do too, but it sells, and that’s what matters. It makes stock prices move and that’s what matters (BP is the largest holding of U.K. Public pensions). We are at the bottom and there’s very little that can be done about it.


#11

Come off it, it is not cheaply built foreign vessels manned by cheap foreign labour that is doing the most advanced tasks in deepwater GoM.
Do you seriously think that a vessel like this is CHEAP, regardless of where it is built??:


Do you seriously believe it is manned by some “$100/month villagers from Bangladesh”??

In another thread we were getting into checking the facts of:

  • How many foreign boats are there working in the GoM?
  • Are they cheaper tom perate than US-flag boats of eqv. capabilities (if any exists)?
  • Who actually man these foreign vessels?
  • Are they paid “slave wages” and working under inhumane and unsafe conditions?

Let me add another question here:
Are there any US Owners willing to invest in vessels like the above to be able to compete on efficiency and safety, not to mention actual “cost of operation” with those despised foreign vessels?
To hide behind “protective walls” does not get you into the big market, which is OUTSIDE US waters.

My two home countries, Norway and Singapore, are main competitors in the Shipping and Offshore business, They go out and compete with others, sometimes on unequal footing. Sometime they win, sometime they loose, but at least they invest, invent and renew. They do not live in a dream world and perception and grandeur of the past.


#12

When we say “cheap” we mean relative to if it were built in the US. In that case, yes that vessel was built cheap.


#13

They could be living in excellent conditions, that’s not really a consideration we’ve ever mentioned here and I’m sure everyone​ agrees the living conditions are fine.

They can be paid fantastic wages relative to the cost of living in their country but still be earning what an American would consider “slave wages”. That makes the vessel cheaper to operate than if they employed Americans.


#14

How do you know, until something similar to Far Samson is actually built in the US??

Yes. even when you build vessels of foreign design, with mostly foreign machinery and equipment it presently cost much more than building the same vessel in high cost European or Japanese yards. WHY?
Is it because the foreign welders or local technicians cost more, or because you have an overpaid and top-heavy administration and management, not to mention greedy CEOs and share holders that expect to earn millions on every contract?


#15

A lot of the people manning these vessels are North West European, with a higher cost of living then Americans: https://www.numbeo.com/cost-of-living/rankings_by_country.jsp


#16

You’ve even admitted in previous threads that only the officers are earning decent money and everyone else is low cost labour.


#17

Because a “Norwegian built” vessel isn’t actually built in Norway. Of course America could compete with Norwegian built vessels if we built 95% of our vessels in Mexico then just finished them in US yards.


#18

In some cases yes the Officers are Europeans but the crews from other parts of the world, earning ITF wages.

On NOR vessels working GoM, or anywhere else in the world, the crews are earning Norwegian wages and enjoy Norwegian conditions, even if they are Americans, East European or whatever.


#19

The hulls are built in Romania, Poland, China or wherever, but the Machinery and equipment is mostly made in Norway, or at least in Scandinavia. Hardly 95% foreign input.

Since most vessels built in US are built at foreigned owned shipyards, from foreign designs and fitted with foreign machinery and equipment, what stops you from doing the same??
(You don’t have to answer that one)

PS> Why not build them in Brownsville using Mexican labour? That would be Jones Act compliant, would it not?


#20

I consider the “machinery and equipment” additional to the “vessel”. So the vessel is built in a foreign country then you finish it on your country. That is NOT Norwegian made and using foreign engines and/or cranes doesn’t make an American built vessel any less American built.


#21

A hull without machinery and equipment is a hull only, not yet a “vessel”…

To build the hulls of Norwegian designed vessels in a foreign shipyard, then tow/transport them to Norway to install mainly Norwegian made machinery and equipment, test, commission and deliver the finished vessels from Norwegian yards doesn’t make the vessels “Norwegian built”?

But building Norwegian designed hulls, install mainly Norwegian machinery and equipment, tested and commissioned by Norwegian technicians at a US shipyard make the vessels somehow 100% American built?

Who can argue against such logic???