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The Honolulu Advertiser
Posted on: Friday, September 15, 2006

Boating industry needs Jones Act exemptions

By Rick Gaffney

The Norwegian Cruise Line ship Pride of Aloha works its way out of Kaua'i's Nawiliwili Harbor without the assistance of a tugboat, using its bow and stern thrusters. Pride of Aloha operates under an exemption to the Passenger Services Act.

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U.S. Rep. Ed Case has correctly made the Jones Act a point of discussion in this year's senatorial campaign. It is appropriate for the citizens of Hawai'i to be regularly reminded of the expensive impact of the Jones Act on our daily lives.

However, virtually all of the Jones Act discussion to date has centered on its impact on the cost of shipping goods to and from Hawai'i. The Jones Act requires that only American-built ships that are substantially owned by American companies may carry cargo between two American ports. The act effectively limits shipping competition between the Islands and the Mainland, which makes costs higher for almost everything we buy and use in Hawai'i.

There is another impact of the Jones Act that has been missed in the discussion, and that is its impact on Hawai'i's boating and ocean recreation industries. Under the Jones Act, only those boats built by American companies may be used as charter boats, carrying passengers for hire. That means Hawai'i's sport-fishing charter boats, passenger catamarans, dive boats and coastal tour vessels must be made in America.

So, the Jones Act limits the options for Hawai'i in another way; it hampers our $1 billion per year ocean tourism industry by forcing businesses to buy more expensive boats.

Top-quality ocean recreation vessels are built in Australia, a country that has higher charter boat safety standards than we do. Under the Jones Act, those boats can't be used here.

Aussie-built boats can cost as much 25 percent less than similar American-built vessels, due to the strength of our dollar and the efficiencies of their boat-building industry.

Moreover, it can cost less to ship a boat here from Australia than it does to ship a similar boat to Hawai'i from the U.S. West Coast, a shorter distance (there's that Jones Act again).

New Zealand, Taiwan, Singapore, Vietnam and China also build quality boats at prices far below those of American build-ers, but they can't be used as charter boats in Hawai'i either.

The Jones Act was passed some 90 years ago to protect American shipbuilding industry and assure a strong maritime industry during times of war. That's a good thing. But some aspects of the Jones Act are severely limiting to small businesses and the ocean recreation industry in Hawai'i, and that's a bad thing.

Exceptions have been made to provisions of a similar law, the Passenger Services Act. Two big cruise ship companies operating in Hawai'i have already benefited from those kinds of exceptions.

Perhaps it is time for our congressional delegation to pursue exceptions and exemptions from other Jones Act provisions in support of the many small businesses that make up Hawai'i's valuable boating and ocean recreations industries?

Perhaps it is time for a change?

Rick Gaffney is a lifetime resident of Hawai'i (Kailua, Kona) who has made his living in and around Island waters for more than 30 years. He wrote this commentary for The Advertiser.