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The maritime Coastwise Shipping Laws -or Merchant Marine Act of 1920- (commonly referred to as the Jones Act as it was sponsored by U.S. Senator Wesley L. Jones) is a United States Federal statute that regulates maritime commerce in U.S. waters and between U.S. ports. It is a cabotage law, and also defines certain seaman's rights.
It is necessary for the national defense and for the proper growth of its foreign and domestic commerce that the United States shall have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in time of war or national emergency, ultimately to be owned and operated privately by citizens of the United States; and it is declared to be the policy of the United States to do whatever may be necessary to develop and encourage the maintenance of such a merchant marine, and, in so far as may not be inconsistent with the express provisions of this Act, the Secretary of Transportation shall, in the disposition of vessels and shipping property as hereinafter provided, in the making of rules and regulations, and in the administration of the shipping laws keep always in view this purpose and object as the primary end to be attained.
— Sec. 1. Purpose and policy of United States (46 App. U.S.C. 861 (2002)), MARAD
The cabotage provisions of the Jones Act restrict the carriage of goods or passengers between United States ports to U.S. built and flagged vessels. In addition, at least 75 percent of the crewmembers must be U.S. citizens. Moreover foreign repair work of U.S.-flagged vessels' hull and superstructure is limited to 10 percent foreign-built steel weight. This restriction largely prevents Jones Act ships from refurbishing their ships at overseas shipyards.
The U.S. Congress adopted the Jones Act in 1920, formerly 46 USC Sec. 688 and codified on October 6, 2006 as 46 USC Sec. 3010. The Jones Act formalized the rights of seaman which have been recognized for centuries.
"From the very beginning of American civilization, courts have protected seaman whom the courts have described as 'unprotected and in need of counsel; because they are thoughtless and require indulgence; because they are credulous and complying; and are easily overreached. They are emphatically the wards of admiralty.'"
The Jones Act allows injured sailors to obtain damages from their employers for the negligence of the shipowner, the captain, or fellow members of the crew. It operates simply by extending similar legislation already in place that allowed for recoveries by railroad workers and providing that this legislation also applies to sailors. Its operative provision is found at 46 U.S.C. 688(a), which provides:
"Any sailor who shall suffer personal injury in the course of his employment may, at his election, maintain an action for damages at law, with the right to trial by jury, and in such action all statutes of the United States modifying or extending the common-law right or remedy in cases of personal injury to railway employees shall apply..."
This allows U.S. seamen to bring actions against ship owners based on claims of unseaworthiness or negligence. These are rights not afforded by common international maritime law.
The United States Supreme Court, in the case of Chandris, Inc., v. Latsis, 515 U.S. 347, 115 S.Ct. 2172 (1995), has ruled that any worker who spends more than 30 percent of his time in the service of a vessel on navigable waters qualifies as a seaman under the act. An action under the act may be brought either in a U.S. federal court or in a state court.
The Jones Act is protectionist, and results in far higher costs for moving cargoes between U.S. ports.
Opponents of the Jones Act contend that the U.S. shipbuilding industry has suffered as a result. Ship operators are incented to maintain veteran U.S.-built vessels rather than replace them with new tonnage. In addition, U.S. shipyards have adapted to building only those ships that are needed by Jones Act operators, with price tags that reflect their all-American workforces. Subsequently, the claim is that U.S. shipbuilders have long since priced themselves out of the international market for merchant ships.
A 2001 U.S. Department of Commerce study indicates that U.S. shipyards built only 1 percent of the world's large commercial ships. The report concluded that the lack of United States competitiveness stemmed from foreign subsidies, unfair trade practices, and lack of U.S. productivity.
Moreover, critics point to the lack of a U.S.-flagged international shipping fleet. The Jones Act, they claim, makes it economically impossible for U.S.-flagged, -built, and -crewed ships to compete internationally with vessels built and registered in other nations with crews willing to work for wages that are a fraction of what their U.S. counterparts earn.
"The Jones Act steals jobs from American seamen who could be working on coastwise freighters and feeders." Rob Quartel, president of the Jones Act Reform Coalition.
Supporters of the Jones Act maintain that the legislation is of strategic economic and wartime interest to the United States. The act, they say, protects the nation's sealift capability and its ability to produce commercial ships. In addition, the act is seen as a vital factor in helping maintain a viable workforce of trained merchant mariners for commerce and national emergencies. Further the Jones Act, say supporters, protects seafarers from deplorable living and working conditions often found on foreign-flagged ships.
Some proponents make the case that allowing foreign-flagged ships to engage in commerce in our domestic sea lanes would be like letting a foreign automaker establish a plant in the U.S. which doesn't have to pay U.S. wages, taxes, or meet national safety or environmental standards.
Requests for waivers certain provisions of the act are reviewed by the United States Maritime Administration on a case by case basis. Waivers have been granted for example, in cases of national emergencies or in cases of strategic interest. For instance, declining oil production prompted MARAD to grant a waiver to operators of the 512-foot Chinese vessel Tai An Kou to tow an oil rig from the Gulf of Mexico to Alaska. The jackup rig will be under a two-year contract to drill in the Alaska's Cook Inlet Basin. The waiver to the Chinese vessel is said to be the first of its kind granted to an independent oil-and-gas company.
Pressure exerted by 21 agriculture groups, including the American Farm Bureau Federation, failed to secure a Jones Act waiver following Hurricane Katrina in the Gulf of Mexico. The groups contended that farmers would be adversely affected without additional shipping options to transport grains and oilseeds.
Sethi, Arjun, The Merchant Marine Act of 1920: The Impact on American Labor (2005).Online Version