Politicians demand answers on ‘novel and problematic’ Jones Act waiver

Bipartisan leaders of the US House Committee on Transportation and Infrastructure wrote last week to the Secretary of Homeland Security and the Secretary of Transportation to express their concern related to a Jones Act waiver issued by the Department of Homeland Security (DHS) for the delivery of fuel to Puerto Rico by a foreign vessel.

“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. “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 representatives continued by questioning how DHS disregarded waiver requirements: “Moreover, 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. 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 have requested written answers to five questions. 

They want to know how DHS issued the waiver “when the statute only permits waivers ‘following a determination by [MARAD] … of the non-availability of qualified United States flag capacity.’” They have asked for the legal justification for performing a retroactive vessel-availability assessment and determination. They want to understand why the shipment was made when reports indicated the island had adequate fuel supplies, and if DHS had considered if the waiver was requested for disaster arbitrage purposes (i.e., was the waiver sought to take advantage of the people of Puerto Rico as they dealt with the impacts of Hurricane Fiona). Finally, they have asked why the issuance of the waiver was necessary and in the interest of national defence.

The signatories to the letter “are concerned that this waiver was both unlawful and unjustified” and they urge DHS not to issue waivers in the future that they believe circumvent legal process and subvert the statutory goal to ensure utilization of American ships.

Kim Biggar

Kim Biggar started writing in the supply chain sector in 2000, when she joined the Canadian Association of Supply Chain & Logistics Management. In 2004/2005, she was project manager for the Government of Canada-funded Canadian Logistics Skills Committee, which led to her 13-year role as communications manager of the Canadian Supply Chain Sector Council. A longtime freelance writer, Kim has contributed to publications including The Forwarder, 3PL Americas, The Shipper Advocate and Supply Chain Canada.
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