Senate bill introduced to close Jones Act offshore loophole

Senator Bill Cassidy M.D. at a recent hearing [Screen gran from video]

U.S. Sen. Bill Cassidy, M.D. (R-La.) yesterday introduced the American Offshore Worker Fairness Act. The legislation is cosponsored in the U.S. House of Representatives by Representatives Garret Graves (R-La.-06) and John Garamendi (D-Calif.-03).

According to Cassidy’s office, the bill provides a level playing field between U.S. flagged vessels and foreign-flagged vessels working in offshore energy activities in U.S. waters. The changes also improve the oversight of foreign-flagged vessels and the mariners who work on these vessels.

Current law requires that all vessels, rigs, platforms, or other offshore structures be manned by U.S. citizens or lawful permanent residents. Existing law also includes an exemption from hiring Americans or lawful permanent residents for offshore activities and allows vessels that are more than 50% foreign-owned to operate in U.S. waters with foreign crews.

The exemption was included to eliminate potential retaliation by foreign nations against American workers in foreign offshore activities. In practice, the exemption has not provided reciprocal access to foreign waters for U.S. mariners but has instead created a loophole that allows foreign vessels from some of the wealthiest countries in the world to utilize mariners not from their home or flag nation, but from low-wage nations. Since labor is the biggest operational expenditure for a vessel operator, operators rely on foreign mariners.

Foreign mariners are often paid 14 to 70% less than their U.S. counterparts. Because foreign mariners are not subject to U.S. tax and labor laws, foreign vessels owners are able to leverage the cost savings derived to undercut the charter rates of similar U.S. vessels.

WHAT THE ACT ACCOMPLISHES

The American Offshore Worker Fairness Act would:

• Require mariners on foreign-flagged vessels be either U.S. citizens or citizens of the nation where the vessel is flagged.

• Limit the number of visas that could be issued to crew of each foreign vessel to 2.5 times the number of crewmembers on that vessel. This would allow for regular crew shift changes.

• Require foreign vessels prove their ownership on an annual basis.

• Require the USCG to inspect these vessels annually to ensure compliance with this law and that the crew members on these vessels secure TWIC cards from the U.S. Department of Homeland Security.

INDUSTRY SUPPORT

Cassidy’s bill is supported by the Shipbuilders Council of America, Offshore Marine Service Association, and United Brotherhood of Carpenters.

“U.S. and Louisiana mariners and maritime companies lose when foreign vessels, which do not pay U.S. taxes, business taxes or payroll taxes, take advantage of loopholes to hire foreign workers for half the cost,” said Dr. Cassidy. “This bill levels the playing field to give the American worker a fair shot.”

“Louisiana has a great opportunity with this bipartisan legislation to bring more jobs to the Gulf region and make sure there are good job opportunities in Louisiana. Other countries are taking advantage of using foreign vessels and workers operating in U.S. waters. This is not a level playing field, not putting America first, and we need to close this loophole. This bill takes us a step closer to bringing parity to the market. I look forward to working with my colleagues in ensuring an American workforce produces America’s energy and promotes our way of life in south Louisiana,” said Graves.

“Our bipartisan bill closes an egregious Jones Act loophole so that foreign-flagged vessels are held to the same high standards as U.S.-flagged vessels developing our nation’s offshore energy resources, including for offshore wind projects,” said Garamendi. “As the former Ranking Member of the House Subcommittee on Coast Guard and Maritime Transportation, I know that American workers and U.S.-flagged vessels are ready, willing, and able to do this work.”

“On a level playing field, U.S. vessels and U.S. merchant mariners can compete with any anyone on the plant. However, we cannot compete with mariners making far less than what any U.S. citizen would or should accept,” said Offshore Marine Service Association president Aaron Smith. “The American Offshore Worker Fairness Act closes this loophole and ensures that when foreign vessels operate in U.S. waters, they play by our rules and pay U.S.-level wages. As such, we wholeheartedly endorse this legislation and applaud Dr. Cassidy for all he is doing to help Louisiana mariners.”

“The Shipbuilders Council of America and the 400,000 men and women in our domestic shipbuilding workforce strongly support the American Offshore Worker Fairness Act,” said Matthew Paxton, president of the Shipbuilders Council of America. “This commonsense, bipartisan legislation closes a loophole that has long been exploited by foreign competitors to undercut America’s maritime workforce. We applaud the efforts of Cassidy, Graves, and Garamendi in showing leadership by standing up for the men and women of America’s maritime industry.”

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