New AOWFA laws goals to shut offshore vitality Jones Act loophole

The Offshore Marine Service Affiliation (OMSA) is applauding the introduction of the American Offshore Employee Equity Act (AOWFA), saying, “this necessary laws gives a step ahead in direction of offering parity between U.S.-flagged and foreign-flagged vessels working in U.S. offshore vitality markets and guaranteeing that U.S. vitality creation means U.S. jobs.”

The AOWFA laws was launched by U.S. Senator Invoice Cassidy, MD (R-La) and is an up to date model of the invoice that he launched final Congress and Part 346 of H.R.2741, the Coast Guard Authorization Act of 2023, which handed the U.S. Home Committee on Transportation and Infrastructure and is presently awaiting consideration by the complete U.S. Home.

Based on Senator Cassidy’s workplace, the invoice creates a degree enjoying discipline between U.S.-flagged vessels and foreign-flagged vessels working in offshore vitality actions in U.S. waters whereas additionally making an attempt to strike a stability between “offering the fullest potential employment for People in Outer Continental Shelf (OCS) actions” and guaranteeing the set up of offshore wind generators and the actions of oil and gasoline rigs or cell offshore drilling models are usually not disrupted. The adjustments additionally enhance the oversight of foreign-flagged vessels and the mariners who work on these vessels.

“U.S. and Louisiana mariners and maritime corporations should be capable to compete on a degree enjoying discipline within the Gulf of Mexico for all offshore vitality actions,” mentioned Dr. Cassidy. “We can not proceed to lose to international vessels who reap the benefits of loopholes, keep away from paying taxes, and rent international employees. This invoice finds the stability that maximizes alternatives for U.S. corporations and employees and avoids challenge delays.”

Present regulation requires that each one vessels, rigs, platforms, or different offshore constructions be manned by U.S. residents or lawful everlasting residents. Current regulation additionally contains an exemption from hiring People or lawful everlasting residents for offshore actions and permits vessels which might be greater than 50% foreign-owned to function in U.S. waters with international crews. Based on the senator’s workplace, the exemption was included to eradicate potential retaliation by international nations in opposition to American employees in international offshore actions. In apply, the exemption has not offered reciprocal entry to international waters for U.S. mariners.

On the expense of U.S. mariners, the exemption has allowed international vessels from a number of the wealthiest nations to work in U.S. waters and make use of mariners not from their house or flag nation however from different low-wage nations. Since labor is the largest operational expenditure for a vessel operator, operators depend on international mariners who are sometimes paid lower than their U.S. counterparts. As a result of international mariners are usually not topic to U.S. tax and labor legal guidelines, international vessels homeowners are in a position to leverage the fee financial savings derived to undercut the constitution charges of comparable U.S. vessels.

The American Offshore Employee Equity Act(AOFWA)

• Ensures mariners manning foreign-flagged vessels engaged in offshore vitality actions in U.S. waters are both U.S. mariners (U.S. residents or authorized everlasting residents) or are residents of the nation the place the vessel is flagged.
• Vessels comparable to oil rigs or cell offshore drilling models or vessels performing sure offshore lifts, together with offshore wind set up vessels, are exempt.
• Creates a brand new home market survey requirement for international vessels laying pipelines or cables on Outer Continental Shelf. This proposal would permit international vessels to carry out this work if a U.S. flagged vessel just isn’t out there and/or able to performing the work sought.
• Requires international mariners serving in U.S. waters to safe a Transportation Employee Identification Credential (TWIC) thereby bettering the oversight of foreign-flagged vessels and the mariners that work on board them.
• Sunsets all present letters of OCSLA non-applicability primarily based requires international vessels to reapply for a brand new letters primarily based upon their present possession, and limits future letters of OCSLA non-applicability to be legitimate for 12 months from the date of challenge.
• Limits the variety of international mariners which will obtain a visa sponsored by a vessel’s letter of OCSLA non-applicability to 2.5 occasions the variety of individuals required by the vessel’s protected manning doc.
• Creates better transparency on enforcement for Jones Act violations.
• Will increase funding and extends the authorization for Maritime Facilities of Excellence

“This model of the invoice doesn’t give our members every thing we have to compete on a degree enjoying discipline business huge,” mentioned OMSA President Aaron Smith. “That mentioned, OMSA applauds Senator Cassidy and his employees for in search of a pathway ahead for AOWFA that addresses claims expressed by vitality pursuits. OMSA, Senator Cassidy, and the opposite AOWFA supporters would by no means take an motion that harms U.S. vitality manufacturing—an financial enabler for the very existence of our business. Whereas the unique model of the invoice solely offered advantages, we acknowledge the necessity to answer the claims made by U.S. vitality and applaud Senator Cassidy for figuring out compromises that do exactly that.”

“Sen. Cassidy has addressed the purported issues of the vitality builders and international vessel homeowners,” added Smith. “They now have a alternative, they’ll both be a part of our American offshore maritime workforce in help of this laws or admit that they by no means actually needed to rent People within the first place. The one distinction between hiring skilled U.S. mariners versus hiring international crews is the speed of pay. American mariners are merely not prepared to just accept $30 a day.”

• Obtain a one pager on the laws from Senator Kennedy’s workplace HERE