Bill passed by Congress that further restricts Jones Act waivers could imperil Puerto Rico
By The Star Staff
The National Defense Authorization Act (NDAA) approved in Congress earlier this month amended the waiver process under the Merchant Marine Act of 1920, known as the Jones Act, putting Puerto Rico in peril in the event a natural disaster prevents supplies from reaching the island.
The amendment tightens the Jones Act waiver process, eliminating the use of blanket waivers and requiring the determination that a waiver is necessary in the interest of national defense to be made by the president, not the Homeland Security secretary as is currently the case.
The amendment was the result of pressure from maritime shipping industry officials angered by an exemption given to Puerto Rico a few months ago. When Hurricane Fiona hit Puerto Rico earlier this year, leaders of domestic maritime industry companies were furious when President Joe Biden’s administration gave a foreign ship filled with diesel oil a waiver to bypass federal regulations and dock in Puerto Rico to help the island’s recovery efforts and prevent massive blackouts.
The 1920 Jones Act requires ships that deliver goods between U.S. ports be built within the United States, owned and operated by U.S. companies, and crewed by U.S. citizens. The law is aimed at shielding domestic shipping companies from foreign competition.
The law provides for exceptions and waivers from the Jones Act but they are hard to come by. Now the 4,300-page 202 NDAA, which has yet to be signed by the president, will make it more difficult. Language in the bill adds new restrictions and even a time delay to make it more challenging for government officials to offer a waiver even if there is an emergency.
Under the new NDAA rules, there will be a mandatory 48-hour delay before a waiver can be approved and published. A ship that is already laden with cargo cannot seek out a waiver at all. In the example of Puerto Rico, a foreign ship that is already full of fuel and available cannot respond to an emergency situation if it has already made one stop at a U.S. port.
Critics of the Jones Act point out that it drives up prices for domestic shipping because it severely restricts which ships can engage in trade between domestic ports. Studies done in Puerto Rico have shown that the Jones Act has driven up the prices of goods from the United States.
The STAR could not immediately obtain a response from La Fortaleza about the proposed amendment.