Category: Government/Legislation

U.S. DOJ and FMC Increase Focus on Antitrust Enforcement

William E. Lawler III and Kierstan L. Carlson


The Biden administration recently announced a renewed enforcement focus on consolidation and alliances in the maritime industry that may hinder competition and increase prices. While federal agencies historically have worked together to target anti-competitive conduct and shipping companies have been targeted in cases alleging cartel activity (e.g., price fixing, market allocation, and bid rigging), companies should heed the recent warnings and must be vigilant in ensuring compliance with competition laws now more than ever.

Regulation of Competition within the Maritime Industry

The Federal Maritime Commission (“FMC”) and the U.S. Department of Justice’s (“DOJ”) Antitrust Division (the “Division”) share enforcement duties over the maritime transport market.

The FMC monitors the effects of ocean carrier alliances on competition. Under U.S. law, international carriers enjoy a limited exception to some antitrust laws, as they are permitted to meet to discuss and agree on voluntary rate guidelines and can file agreements with the FMC establishing such guidelines. However, the FMC is not required to approve such agreements and can bring civil actions in court to enjoin any agreements likely to reduce competition such that it leads to unreasonable price increases or service reductions, or to substantially lessen competition in purchasing covered services. The FMC also has a Bureau of Enforcement, which investigates potential violations and can impose civil penalties or engage in formal proceedings.

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Mainbrace Live: U.S. Offshore Wind Industry Update

Blank Rome’s internationally recognized Maritime & International Trade practice group presents a new series of informative webinars covering hot topics in the shipping industry and key insights into 2021 and beyond. Sessions will cover:

    • Sanctions and international trade
    • Offshore wind developments
    • Shipping litigation
    • Maritime regulation
    • Ship finance
    • And more!

For the second webinar in our Mainbrace Live series, Blank Rome LLP Maritime attorneys Thomas H. Belknap, Jr., Joan M. Bondareff, Jonathan K. Waldron, Douglas J. Shoemaker, and Dana S. Merkel presented “U.S. Offshore Wind Industry Update” on Tuesday, April 27, 2021.

Tom, Joan, Jon, Douglas, and Dana discussed:

    • U.S. offshore wind development projects and infrastructure
    • Biden Administration’s commitments to expand renewable energy
    • The Jones Act’s impacts on existing and planned offshore wind installation and servicing projects
    • Pitfalls and opportunities for contractors and service providers looking to enter the industry

MODERATOR

PRESENTERS

You can read coverage of this webinar at TradeWinds here.

To watch a recording of this webinar, please go to the webinar on-demand registration page here.

Mainbrace Live: Prepare for the Biden Administration’s Maritime & Foreign Policy

Blank Rome’s internationally recognized Maritime & International Trade practice group presents a new series of informative webinars covering hot topics in the shipping industry and key insights into 2021 and beyond. Sessions will cover:

    • Sanctions and international trade
    • Offshore wind developments
    • Shipping litigation
    • Maritime regulation
    • Ship finance
    • And more! 

To open the series, on April 13, 2021, Blank Rome LLP Maritime Partners Matthew J. Thomas and Kierstan L. Carlson, along with Blank Rome Government Relations LLC Senior Advisor David S. Jansen, presented “Mainbrace Live: Prepare for the Biden Administration’s Maritime & Foreign Policy.”

Matt, Kierstan, and David discussed the outlook for maritime policymaking under the new Administration and its impacts on the global shipping industry, including:

    • Maritime outlook for the new Congress and Administration
    • International trade sanctions and foreign policy 
    • Enforcement trends

MODERATOR

PRESENTERS

To watch a recording of this webinar, please go to the webinar on-demand registration page here.

CBP Modifies First Offshore Wind Ruling

Jonathan K. Waldron, Matthew J. Thomas, Jeanne M. Grasso, and Stefanos N. Roulakis

Stakeholders in offshore wind construction projects, including vessel owners and operators, project developers, and equipment manufacturers, should ensure that their plans for offshore wind development take into consideration the implications of U.S. Customs and Border Protection’s (“CBP”) most recent Jones Act ruling. While a previous ruling issued by CBP in January 2021 changed course by ruling that “pristine sites” were subject to the Coastwise Merchandise Statute (commonly referred to as the Jones Act), CBP has modified this ruling generally in line with past precedent. Nonetheless, CBP’s modification creates some changes for Jones Act compliance in the offshore wind sector.

On January 27, 2021, CBP ignited controversy in its first Jones Act ruling on offshore wind since the passage of the 2021 National Defense Authorization Act (“NDAA”). The NDAA, through an amendment to the Outer Continental Shelf Lands Act (“OCSLA”), clarified that the Jones Act applied to renewable energy projects on the U.S. Outer Continental Shelf (“OCS”), and stakeholders expected that the same cabotage rules which have applied to mineral energy development projects would equally apply to offshore wind. Nonetheless, in HQ H309186, CBP deviated from decades of precedent by ruling that the lading of “scour protection” materials by a non-coastwise qualified vessel at a U.S. coastwise point (i.e., a port or place in the United States), and unlading of these materials at a pristine site on the OCS, would violate the Jones Act. Reversing course after comments from industry stakeholders, CBP issued a modification, which held that the “Jones Act does not apply to activity occurring at the pristine seabed on the OCS, which has been CBP’s longstanding position on the issue.” HQ H317289 (March 25, 2021). While CBP’s reversal appears to be consistent with “longstanding” precedent on pristine sites, the modification itself raises questions about the applicability of the Jones Act in certain contexts as discussed further below.

BACKGROUND

Decades after extending federal law (including the Jones Act) to the OCS for mineral-related energy development projects, Congress enacted the 2021 NDAA, which included a provision confirming that the Jones Act applies to all offshore energy development on the Outer Continental Shelf, including wind energy. While most offshore wind projects were planned with Jones Act compliance in mind, this has generally been a welcome development for all stakeholders, with the hope that it would bring needed clarity and certainty to renewable energy development projects offshore.

However, CBP’s first shot out of the gate in January missed the mark, although the agency should be lauded for issuing a correction in short order last month. In the initial ruling, Great Lakes Dredge and Dock (“Great Lakes”) proposed to transport and unlade “scour protection” materials (i.e., rocks) to protect wind turbine generator (“WTG”) foundations in conjunction with the construction of the Vineyard Wind Project located on the OCS off the southeast shore of Martha’s Vineyard. Great Lakes proposed unlading the materials at the WTG sites on the OCS in layers and at different phases of the WTG installation process using both coastwise and non-coastwise vessels under various scenarios.

Please click here for the full client alert.

Maritime Legislative Update

Jonathan K. Waldron, Joan M. Bondareff, and Stefanos N. Roulakis







The end of 2020 has seen significant developments in legislation with implications for the maritime industry as we move from the Trump administration to the new Biden administration. This article provides an update on the status of several key maritime-related bills in the 116th Congress as of December 7, 2020. 

The incoming Biden administration has not developed specific bills yet, but we anticipate infrastructure being at the top of the list. This will provide a number of opportunities for the maritime industry—from expanding title XI loan guarantees to funding for port infrastructure projects, new vessels for new offshore wind projects, and an expansion of cargo preference to support the Jones Act. Of import, Biden’s campaign voiced his support for the Jones Act.

Key Maritime Bills Expected to Be Enacted in the 116th Congress

National Defense Authorization Act (“NDAA”)

The NDAA is roundly considered to be an annual “must-pass” bill, having passed every year since the Kennedy administration. In recent years, many maritime provisions have been included in the NDAA. The reason for this is that, as an essential bill that is enacted every year, the NDAA creates opportunity for the advancement of policy priorities in the maritime industry if they are included. The House and Senate have agreed to a conference report for the NDAA and the final bill will include significant maritime provisions, including U.S. Maritime Administration (“MARAD”) reauthorization, U.S. Coast Guard (“USCG”) reauthorization, extension of the Jones Act and other federal laws to offshore renewable energy, and funding for ports to address COVID-related emergencies. A few of these bills are summarized below and more details will be addressed in a follow-up maritime advisory.

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New Legislation to Apply the Jones Act to Offshore Renewables

Jonathan K. Waldron and Stefanos N. Roulakis

The House of Representatives passed legislation, H.R. 4447, the Expanding Access to Sustainable Energy Act of 2019, on September 24, 2020, that included a provision from Representatives Garamendi and Lowenthal (“Amendment 33”) to amend the Outer Continental Shelf Lands Act (“OCSLA”) that would confirm the Jones Act applies to all offshore energy development on the Outer Continental Shelf (“OCS”), including wind energy. Passage of this provision now appears imminent, as it has been recently included in the National Defense Authorization Act (“NDAA”). From an operational standpoint, while most offshore projects are planned with Jones Act compliance in mind, enactment of this provision would be a welcome development to stakeholders and bring needed clarity to renewable energy development offshore. 


Background

The Coastwise Merchandise Statute, commonly known as the Jones Act, has evolved over time. The U.S. cabotage laws date back to the founding of the Republic and were enshrined in their current form in the Merchant Marine Act of 1920. These were originally laws that dealt with transportation issues for domestic voyages. However, as time progressed and production of marine resources became feasible, the U.S. Congress passed OCSLA, which extended federal law to installations on the OCS. 

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Marine Plastic Pollution

Joan M. Bondareff and Dana S. Merkel

As the inveterate pundit Pogo once said, “We have met the enemy and he is us.” This could very well be said for our disposable society, which uses and disposes tons of plastic in ways that are not wise and negatively impact the health of our oceans and sea life within. Although many reports focus on larger plastics, microplastics, which go largely unnoticed, are also wreaking havoc on our oceans. Microplastics are small pieces of plastic that come from a variety of sources, both from degradation of larger plastics and from tiny manufactured plastics that are added to many health and beauty products as exfoliants. Recent surveys by Australian scientists estimate that there are at least 14 million tons of microplastics on the ocean floor, with higher concentrations where plastics accumulate at the surface of the water. 

Finding a Solution

Scientists are working hard to find a solution to the plastic problem—particularly the fact that plastic never completely breaks down, but rather only breaks into smaller and smaller pieces. A number of new and interesting ideas have been proposed, such as plastic-eating caterpillars and super enzymes. However, until we have a better system for breaking up plastics harmlessly, we need to develop plans for reducing and recovering marine plastic waste.  

Continue reading “Marine Plastic Pollution”

New Legislation to Apply the Jones Act to Offshore Renewables

Jonathan K. Waldron, Joan M. Bondareff, and Stefanos N. Roulakis







Stakeholders in offshore wind construction projects, including vessel owners and operators, project developers, and equipment manufacturers, should ensure that their plans for offshore wind development comply with the Jones Act. While most stakeholders already assume in their planning that the Jones Act applies, new pending legislation, if enacted, would confirm that the Jones Act does indeed apply to offshore wind construction.

NEW DEVELOPMENTS

The House of Representatives passed legislation, H.R. 4447, the Expanding Access to Sustainable Energy Act of 2019, on September 24, 2020, which included a provision from Representatives Garamendi and Lowenthal (“Amendment 33”) to amend the Outer Continental Shelf Lands Act (“OCSLA”) that would confirm the Jones Act applies to all offshore energy development on the Outer Continental Shelf (“OCS”), including wind energy. While most projects were planned with Jones Act compliance in mind, this is a welcome development for all stakeholders, as it will bring needed clarity to renewable energy development offshore.

BACKGROUND

The Coastwise Merchandise Statute, commonly known as the Jones Act, has evolved over time. The U.S. cabotage laws date back to the founding of the Republic and were enshrined in their current form in the Merchant Marine Act of 1920. These were originally laws that dealt with transportation issues for domestic voyages. However, as time progressed and production of marine resources became feasible, the U.S. Congress passed OCSLA, which extended federal law to installations on the OCS.

Please click here for the full client alert.

EPA’s Long-Anticipated VIDA Proposed Rule Now Available

Jeanne M. Grasso and Dana S. Merkel

NEW DEVELOPMENT

The U.S. Environmental Protection Agency (“EPA”) made available its long-anticipated standards for discharges incidental to the normal operation of vessels pursuant to the Vessel Incidental Discharge Act (“VIDA”) on October 6, 2020. Signed into law on December 4, 2018 as part of the Frank LoBiondo Coast Guard Authorization Act of 2018, VIDA established a new framework for the regulation of discharges incidental to the normal operation of vessels in an attempt to bring consistency and certainty to the regulation of discharges from U.S.- and foreign-flag vessels.

The first step in implementing VIDA requires EPA to develop federal performance standards for “marine pollution control devices,” which includes any equipment or management practice (or combination thereof) to manage incidental discharges from vessels. After some delays, EPA posted its notice of proposed rulemaking on October 6, available here, to set standards for 20 types of vessel discharges incidental to normal operations. The program implemented under VIDA will replace EPA’s Vessel General Permit and certain U.S. Coast Guard (“USCG”) regulations for ballast water a few years from now, after the USCG finalizes regulations to implement EPA’s standards, including compliance, monitoring, inspections, and enforcement.

BACKGROUND

VIDA was the culmination of years of discussion, debate, and litigation concerning discharges incidental to the normal operation of vessels. Although back in the 1970s EPA initially exempted these discharges from the Clean Water Act’s National Pollutant Discharge Elimination System (“NPDES”) permitting program due to the burden of permitting every vessel entering U.S. waters, a federal court ruled in 2006 that EPA must issue permits for vessel discharges. In response, EPA developed the 2008 Vessel General Permit (“VGP”). The 2008 VGP was eventually replaced by the 2013 VGP, which contained some more stringent requirements, such as numeric limits on ballast water discharges, a requirement to use environmentally acceptable lubricants, and new monitoring requirements for ballast water, bilge water, and graywater.

Please click here for the full client alert.

Latest Developments on Maritime Legislation in the 116th Congress

Jonathan K. Waldron, Joan M. Bondareff, and Dana S. Merkel

As the 116th Congress begins to slowly come to an end, and Congress leaves town without passing a relief bill during the summer recess, the maritime industry can benefit from several bills that have been added to this year’s National Defense Authorization Act (“NDAA”), in particular those on the House side. Following is a synopsis of a few key items to watch for.

NEW DEVELOPMENT

Numerous bills have been added to the NDAA that impact the maritime industry or provide critical COVID-19 relief to the industry. Although each of these bills was proceeding independently, they were recently added to the NDAA, which has passed reliably every year for 56 years, in an effort to move them forward. The maritime industry-related legislation added to the NDAA included:

Coast Guard Authorization Act of 2020

The Elijah E. Cummings Coast Guard Authorization Act of 2020 (“CGAA”), which has been in progress for over a year, was attached to the NDAA in full on the House side. The CGAA includes a number of significant authorizations for new cutters and icebreakers, including construction of a new Polar Security Cutter to replace aging icebreakers, acquiring a new National Security Cutter and four Fast Response Cutters, and acquiring a Great Lakes icebreaker. We are monitoring the appropriations bills for FY2021 to determine whether funding is provided for these ongoing and significant procurements.

Please click here for the full client alert.

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