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Tuesday, November 29, 2022

Bipartisan Concern Over ‘Novel and Problematic’ Jones Act Waiver

The Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR), Transportation and Infrastructure Committee Ranking Member Sam Graves (R-MO), Chair of the Subcommittee on Coast Guard and Maritime Transportation Salud Carbajal (D-CA), and Subcommittee on Coast Guard and Maritime Transportation Ranking Member Bob Gibbs (R-OH) have written to the Secretary of Homeland Security and Secretary of Transportation expressing concern with the Jones Act waivers issued by the Department of Homeland Security (DHS) for the delivery of fuel to Puerto Rico by foreign vessels. 

On October 16, Secretary of Homeland Security Alejandro N. Mayorkas announced that DHS had approved a temporary and targeted Jones Act Waiver in order to address Puerto Rico’s needs as recovery efforts from Hurricane Fiona continue. This followed the previous waiver announced in September.

Mayorkas said the decision to approve the waivers was made in consultation with the Departments of Transportation and Energy to assess the justification for the waiver request and based on input from the Governor of Puerto Rico and others on the ground supporting recovery efforts.

But the Committee members are concerned and question DHS’s decisions.

“We write to express our concerns and disappointment with your recent decision to grant Jones Act waivers for the delivery of fuel to Puerto Rico including to allow the delivery of diesel that was sourced from the mainland United States by British Petroleum Products North America (BPPNA) to Puerto Rico on a foreign vessel on September 28, 2022,” the representatives said in their letter. “We concur with the Maritime Administration (MARAD) that consideration of a waiver while a vessel is already underway is ‘novel and problematic’ and would like to better understand the reasoning for your decision to issue a waiver for a company that appeared to be gaming the Jones Act waiver process.” 

The Jones Act is vital to maintaining the strength of the American shipbuilding and maritime industries by requiring all maritime cargo transport between U.S. ports to occur on U.S. flagged vessels. When U.S. flagged vessels are not available to meet national defense requirements, DHS may grant a waiver to the Jones Act if the proposed shipments are in the interest of national defense and after careful evaluation of the issue. In 2020, Congress eliminated the federal government’s authority to issue long-term comprehensive waivers, except in circumstances where a waiver is required to “address an immediate adverse effect on military operations.” Under the law, waivers that do not meet that standard must be reviewed on a case-by-case basis.

The representatives questioned how DHS disregarded waiver requirements: “The question of availability was not intended to be answered in retrospect; the statute is intended to be a prospective evaluation to give U.S.-flag ships the first opportunity to move the goods, without the need to waive the law,” the representatives wrote. “We do not understand how the Department of Homeland Security (DHS), either independently or acting through MARAD, made a retroactive determination that no U.S.-flag vessels could have performed the move for which the waiver was granted—and did so on the day the waiver was granted.”  

The representatives concluded their letter by requesting written answers on (1) how DHS issued the waiver despite not following requirements, (2) the legal justification for performing a retroactive vessel availability assessment, (3) why the shipment was made when reports indicate the island had adequate fuel supplies, (4) if DHS had considered if the waiver was requested for disaster arbitrage purposes, and (5) why the waiver was needed in the interest of national defense. 

Hurricane Fiona hit Puerto Rico on September 18 and caused significant damage. To this day, thousands are still without power.

Read the full letter at the House Committee on Transportation and Infrastructure

Mayorkas Approves Another Jones Act Waiver for Puerto Rico

Viewpoint: Jones Act Crucial to Ensuring American Maritime Security

Kylie Bielby
Kylie Bielby has more than 20 years' experience in reporting and editing a wide range of security topics, covering geopolitical and policy analysis to international and country-specific trends and events. Before joining GTSC's Homeland Security Today staff, she was an editor and contributor for Jane's, and a columnist and managing editor for security and counter-terror publications.

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