Jones Act Vital for Puerto Rico


October 2015


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From different perspectives, speakers at a recent Jones Act forum in Puerto Rico were unanimous in defending the law’s great value to the commonwealth.


The SIU and many of its allies teamed up for an informational meeting Sept. 4 aimed at continuing to publicize the truth about the Jones Act – a key maritime law that has come under erroneous but fierce attack in the territory. Hundreds turned out for the event, including former Gov. Carlos Romero Barcelo, Puerto Rico Sen. Carmelo Rios Santiago, union and company officials. Many Seafarers, SIU retirees and their families also filled the meeting room in a strong demonstration of support.


A day earlier, SIU Executive Vice President Augie Tellez and Secretary- Treasurer David Heindel met with members at the union hall to share the latest news in the campaign to promote and defend America’s freight cabotage law.


The Jones Act requires that cargo moving between domestic ports is carried on vessels that are crewed, built, owned and flagged American. Critics have taken to blaming the law for Puerto Rico’s financial woes, even though the only credible studies of its effect on the territory have concluded the Jones Act in fact benefits the island.


As Joseph Keefe of Maritime Professional wrote, “To blame the Jones Act for the island’s woes is simply shortsighted and frankly a misguided effort to point fingers elsewhere when the real problems exist much closer to home. U.S.-flag shipping has provided reliable and regular service to the island for many years. That’s not going to change, and, in reality, it may be one of the things that helps the island to recover.”


Overall, the Jones Act helps support nearly 500,000 American jobs and contributes billions of dollars annually to the economy, according to PricewaterhouseCoopers. It’s also a vital component of U.S. national and homeland security, partly because it helps maintain America’s shipbuilding capability as well as a pool of reliable, well-trained U.S. mariners who are available to sail aboard military support vessels in times of need.


Those were some of the messages delivered at the Sept. 4 meeting, which also featured remarks from Jose Nazario, Ricky Ilarraza and Jose “Pache” Ayala of Crowley; Eduardo Pagan of Sea Star; Tellez and SIU Port Agent Amancio Crespo; Eduardo Iglesias of the Masters, Mates & Pilots; Carlos Sanchez Ortiz of the International Longshoremen’s Association.

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MTD President Sacco Alerts Congress
To Fallacies in Anti-Jones Act Report


The Maritime Trades Department, AFLCIO (MTD) has called upon members of Congress to not be taken in by a newly released study trying to blame some of Puerto Rico’s economic crisis on the Jones Act.


In letters sent to the chair and ranking member of the Senate Commerce, Science and Transportation Committee and its Surface Transportation and Merchant Marine Subcommittee as well as to the House Transportation Committee, its Coast Guard and Maritime Transportation Subcommittee, and the House Armed Services Committee and its Seapower and Projection Forces Subcommittee, MTD President Michael Sacco reiterated the department’s longstanding promotion of the Jones Act, the nation’s freight cabotage law.


“Let me go straight to the point: The Maritime Trades Department, AFL-CIO has been, is and will be a resolute supporter of the Jones Act,” stated Sacco in his letters of September 2. “For nearly 100 years, the Jones Act has served America’s economic and defense interests. It provides decent family-supporting jobs all across the United States and its territories, including Puerto Rico.”


Sacco, who also serves as president of the SIU, noted the study (known as the Krueger Report) commissioned by the government of Puerto Rico “did not rely on the critical ingredient that was used heavily in a 2013 independent review of the Jones Act in Puerto Rico by the Government Accountability Office – facts.”


The Krueger Report tried to make a case that exempting the commonwealth from the Jones Act would alleviate some of the financial indebtedness faced by Puerto Rico. However, it ignored many of the points made in the GAO study – including one that there are too many factors involved in the cost of transportation as it relates to cost of consumer goods to identify any specific cost related directly to the Jones Act. In addition, the Krueger Report failed to provide an accounting of the thousands of jobs held by Puerto Ricans thanks to the Jones Act trade.


Several news stories released after the Krueger Report came out have tried to claim all goods and services going into or out of Puerto Rico have to be carried aboard U.S.- flag vessels. This ignored the fact that twothirds of the island’s services come from foreign-flag bottoms.


Sacco also pointed out that the Krueger Report chose to leave out the importance of the Jones Act to national security. He quoted the vice chairman of the Joint Chiefs of Staff, General Paul Selva, who addressed the MTD executive board meeting in February when he was commander of the U.S. Transportation Command: “Without the contribution that the Jones Act brings to support of our industry, there is a direct threat to national defense.”


In his conclusion, Sacco stated, “While we are greatly concerned about the economic distress being faced by Puerto Rico and are willing to be part of the effort to help alleviate the crisis, we firmly believe any attempt to exempt the commonwealth from the jurisdiction of the Jones Act will only exacerbate the situation, leading to additional job losses for the citizens of the island as well as to workers on the mainland.”