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Views

Modifications to the Jones Act: IMCA Expresses its Views

Member-companies of the International Marine Contractors Association (IMCA) with vessels active in American waters, and their clients, are disturbed about proposed modifications/revocation of ruling letters related to the coastwise laws of the United States, commonly known as the Jones Act.

Proposed changes by the U.S. Customs and Border Protection (CBP) that would change long-standing interpretations of rules for vessels transporting specialized equipment used by the offshore oil and gas industry are causing serious concern in the industry.

Member-companies of the International Marine Contractors Association (IMCA) with vessels active in American waters, and their clients, are disturbed about proposed modifications/revocation of ruling letters related to the coastwise laws of the United States, commonly known as the Jones Act. They are also worried about the shortness (30 days) of the consultation period now open for comment. The Jones Act restricts the activities of foreign-flagged vessels carrying merchandise between United States ports; the proposed modifications will have detrimental impact on activities vital to the US offshore oil and gas industry. The document can be located at www.cbp.gov/linkhandler/cgov/trade/legal/bulletins_decisions/bulletins_2009/vol43_07172009_no28/43genno28.ctt/43genno28.pdf

“Since 1953, vessels that transport merchandise to, or between, U.S. ports and U.S. outer Continental Shelf (OCS) platforms or anchored vessels must be United States-built, owned and properly documented for coastwise trade,” IMCA’s Chief Executive, Hugh Williams, explains. “Until recently the U.S. Customs and Border Protection (CBP) has exempted certain specific activities from the Jones Act including the activities of pipe-laying, cable-laying, diving support work, and heavy-lift crane construction and installation work.

“In a notice published on 17 July this year, the CBP stated that it intends to modify or revoke many such long-standing exceptions, and began a 30-day consultation period, so comments need to be received by 17 August. Under the law, the decision would be implemented in 60 days following the CBP’s decision. Specifically, the CBP will no longer exempt the installation of ‘pipeline connectors’ from a foreign-flagged vessel, as the CBP has ruled that such machinery is ‘not incidental to the laying of pipeline’. Additionally, the CBP has limited its interpretation of the term vessel ‘equipment’ which is exempt from the Jones Act, to exclude machinery and goods that are not needed to navigate, operate or maintain the vessel itself,” he adds.

“In short, the CBP proposal would overturn over 30 years of precedent on which the offshore industry has relied, and in which it has invested millions of dollars on the necessary resources to conduct oil and gas operations, with precious little time to provide input to CBP for consideration or find suitable alternatives. This could shut down most activities in the deep water Gulf of Mexico for an extended period of time as there are currently very limited numbers of coastwise trade vessels existing that have the capacity, or the trained personnel, to perform these activities currently being performed by foreign-flagged vessels.

“This impending action would have extremely broad and detrimental implications for the US offshore industry and ultimately threaten the national security of the United States. With our North America Section we are working actively with other trade bodies, in urging CBP to retain its current interpretation of the Jones Act as it pertains to pipelaying and the definition of equipment versus merchandise. Please submit your comments to this proposed change.”

IMCA is an international association with nearly 600 members in 52 countries representing offshore, marine and underwater engineering companies. IMCA has four technical divisions, covering marine/specialist vessel operations, offshore diving, hydrographic survey and remote systems and ROVs, plus geographic sections for the Americas Deepwater, Asia-Pacific, Europe & Africa and the Middle East & India regions, as well as a core focus on safety, the environment, competence and training. IMCA seeks to promote its members’ common interests, to resolve industry-wide issues and to provide an authoritative voice for its members.

IMCA publishes some 200 guidance documents and technical reports. These have been developed over the years and are widely distributed. They are a definition of what IMCA stands for, including widely recognised diving and ROV codes of practice, DP documentation, marine good practice guidance, the ‘Common Marine Inspection Document’, safety recommendations, outline training syllabi and the IMCA competence scheme guidance. In addition to the range of printed guidance documents, IMCA also produces safety promotional materials, circulates information notes and safety flashes.
 

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MarEx Editor’s Note: The above remarks were provided by IMCA and do not necessarily reflect those of MarEx. Opposing views and position papers are welcome, and encouraged.