BY MALIA ZIMMERMAN – Day 66 of the BP oil rig disaster: With no end in sight to gas and oil billowing from the BP undersea oil well, and the gulf coast states suffering from the environmental and economic havoc, GOP congress members are becoming more aggressive in their push against the Jones Act, and for foreign aid, to help in the massive clean up effort.
Friday, June 25, U.S. Senator John McCain, R-AZ, took the boldest stance yet – introducing legislation for a total repeal of the 1920 maritime law, which mandates that all goods shipped between U.S. ports be transported in U.S.-built, U.S. owned and U.S. manned ships.
Hawaii Congress member Charles Djou, R, D-HI, in a letter June 23, joined GOP congress members from Florida and Texas in asking President Barack Obama for a Jones Act exemption in the Gulf of Mexico. Djou says the law is deterring foreign countries from bringing in highly trained workers and the latest technology to lend their expertise.
Today Djou says: “I agree with Sen. McCain and look forward to working with him to repeal or reform this antiquated First World War era legislation.”
The Jones Act is a hot political issue in recent days as the environmental damage from the oil leak continues to spread throughout the oceans and beaches in Louisiana, Mississippi, Alabama and Florida, wiping out wildlife and ocean life and the local fishing industries.
Republicans say that foreign nations should not have to fill out extensive paperwork, replace their workers with American crews that they have to train on the latest technology or hire attorneys to help with the paperwork – all in an effort to help America through this disaster.
“The situation in the Gulf of Mexico is unacceptable. My colleagues and I agree with the President that no resource can be spared in the relief and recovery efforts,” Djou says. “The Jones Act has been waived before in times of crisis and should be again. Doing so would send a clear message that we welcome any and all assistance in dealing with the largest environmental disaster in our nation’s history.”
But several powerful Democrats, including Senate Appropriations Chair Daniel Inouye, D-HI, say the law should remain in place, no exemption is needed and that any attempt to revoke or exempt the law in the clean up or otherwise is purely political.
“That is not necessary,” Inouye says. “American vessels from the Navy, Coast Guard, state and county governments are working with private citizens and foreign vessels in support of the clean-up effort.”
Inouye says to suggest that we suspend the Jones Act to allow foreign ships into the Gulf “is more about pushing a political agenda than any genuine interest in helping Gulf coast communities with their clean up.”
“We are already at the mercy of foreign competitors when it comes to oil, we should not add shipping to that list,” Inouye says.
So far Obama remains silent on the debate and has not issued an exemption.
ANOTHER TWIST IN THE JONES ACT SAGA
Hundreds of thousands of dollars follow Jones Act congressional supporters in the form of campaign contributions– and traditionally shipping companies such as Matson and Horizon, Hawaii’s monopoly shippers, fight aggressively against any proposed exemptions to the law.
This is detailed in a March 2010 Hawaii Reporter/Grassroot Institute investigation entitled: “Hawaii’s Shippers Aim to Manipulate the Federal Elections and Regulations to Keep Status Quo” https://archives.hawaiireporter.com/story.aspx?d04b5e3d-6a27-48b2-b0cb-3f408e7ec9e9
In the recent May 22 Hawaii special congressional election, Matson even told their employees who to vote for (Colleen Hanabusa over Charles Djou and Ed Case) to keep the law in place. (see the Letter to Matson employees )
McCain spells out why the law is important to some special interest groups, saying the law “hinders free trade and favors labor unions over consumers.”
However, there is a new twist in the Jones Act controversy reported in The Journal of Commerce on June 24 in a piece entitled: “Jones Act Waivers OK, Tanker CEO Says.”
The Journal’s Joseph Bonney reports: “The chief executive of Overseas Shipholding Group, the largest U.S.-flag tanker operator, said U.S. carriers won’t object to allowing foreign companies to provide equipment needed to clean up crude oil from the underwater gusher in the Gulf of Mexico.”
He includes this quote from OSG’s Morten Arntzen, who told the annual Marine Money International conference in New York: “If there is any piece of equipment that will help clean up the spill in the Gulf, as the biggest operator of Jones Act tankers in the Gulf we will encourage the Obama administration to let these vessels in. We will not stand in the way whatsoever.”
One of OSG’s tankers is shuttling recovered oil from the blowout site to shore, The Journal says.
See the full report here: https://www.joc.com/maritime/jones-act-waivers-ok-tanker-ceo-says
Djou says today: “While some might be satisfied with the current situation in the Gulf, I am not. We should be utilizing every resource at our disposal to stop the spill and clean up the mess. Waiving the Jones Act would send a clear message to our allies around the world who want to help that the United States will accept any help from wherever and whomever it is offered. Mr. Bonney’s comments are one more reason why the Jones Act should be waived.”
However opponents of the exemption, including Congressmember Mazie Hirono, D, HI-2, said as late as Friday, June 25, they won’t change their mind in standing by the Jones Act.
TWO HAWAII CONGRESS MEMBERS SOUGHT EXEMPTIONS FROM THE JONES ACT LAW TO NO AVAIL
Hawaii Congress Member Ed Case, D-HI-2 (2002-2007) introduced three different legislative proposals in 2003 to exempt Hawaii from the Jones Act. He was strongly opposed in this effort by the other Hawaii congressional delegates, including then U.S. Rep. Neil Abercrombie, D-HI-1, and U.S. Senators Daniel Akaka and Daniel Inouye, and his legislation didn’t survive.
However, 7 years later, Djou, who defeated Case in the special election this May, introduced similar legislation last week based on Case’s proposals.
Djou hopes the recent BP oil spill shines the light on the problems with this law, which was enacted three decades before Hawaii became a state in 1959.
The main issue for Hawaii and some U.S. territories is cost of living increases by what experts claim is as much as 30 percent because of monopoly shipping rates.
As McCain points out June 25: “The Jones Act adds a real, direct cost to consumers – particularly consumers in Hawaii and Alaska. A 1988 GAO report found that the Jones Act was costing Alaskan families between $1,921 and $4,821 annually for increased prices paid on goods shipped from the mainland. In 1997, a Hawaii government official asserted that ‘Hawaii residents pay an additional $1 billion per year in higher prices because of the Jones Act. This amounts to approximately $3,000 for every household in Hawaii.'”
National media have been debating this issue over the last few weeks since foreign carriers said they were being hindered in their volunteer efforts.
The Washington Post continued the debate today, in an editorial entitled: “The Jones Act ship law has outlived its usefulness”
Malia Zimmerman, editor of Hawaii Reporter, can be reached at Malia@hawaiireporter.com