6.20.2010

Waiving the Jones Act - A Bit Tricky

As I've noted, the Jones Act, a maritime law passed by Congress in 1920 and since amended, bars the use of foreign vessels and foreign crews in some aspects of the oil spill cleanup.

Republicans are pressuring President Obama to "waive" the law as President Bush/Homeland Security Secretary Michael Chertoff did during Hurricane Katrina's aftermath.  I'm perfectly fine with a congressional enactment waiving the law (Sen. Kay Bailey Hutchison of Texas has proposed something to that effect).  Here's a helpful, detailed look at how the waivers went down during the post-Katrina time period - and based on a close reading of the text of the "national defense" exception that permits some waivers, I don't know that President Bush's action was proper.

Some commentators, in attempting to press the argument against the "old, protectionist chestnut," have pointed to a recent customs determination that the Jones Act's cabotage provisions do not apply to foreign vessels that might be used to install offshore wind turbines:

Admiral Allen said today waivers must be considered on a case by case basis, but Fox News has obtained a general waiver granted by former Secretary of Homeland Security Michael Chertoff in the days following Hurricane Katrina. According to a news article in Tradewinds Magazine, a US Customs official ruled recently that the Jones Act does not apply to foreign owned vessels installing wind turbines off the coast of Delaware.

As Mssrs. Papavizas and Morrissey pointed out in Tulane Maritime Law Journal's summer 2010 issue, however, offshore wind turbine installation is potentially a whole different story from hydrocarbon- and mineral-based extraction work when it comes to the applicability of the Jones Act and other U.S. cabotage provisions.  Thus, the Customs determination referenced by various observers may be wholly distinguishable and irrelevant to any argument for waiving the Jones Act in this instance.