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Bean Responds to Jones Act Allegations

To the Editor:
It is unfortunate that neither C.F. Bean LLC nor Stuyvesant Dredging Company were contacted by your magazine before you wrote your commentary on the current dredging controversy in the U.S. The commentary repeats the position of our competitors, which include significant factual errors and omissions. I appreciate the opportunity to briefly provide Bean Stuyvesant’s perspective.

First, I invite your readers to actually read the 1992 amendment to the U.S. dredging statute. There is nothing ambiguous about it. The legislation explicitly states that Stuyvesant Dredging Company (SDC), a U.S. subsidiary of Boskalis Westminster, can charter U.S. flag dredges – hoppers and non-hoppers—in addition to the Stuyvesant. It says this plainly. SDC had this right before 1992 under the 1904 Dredging act. The 1992 law simply preserved this right because SDC was an existing competitor in the U.S. market. In fact, in 1991, the U.S. dredging industry association tried to limit this grandfather clause, but could no get the bill through congress. The grandfather thereafter was carefully negotiated and agreed to by the industry as the price for passage of a general restriction on chartering dredges to non-citizens. Now it wants to renege on that agreement.

Second, the grandfather clause explicitly included in its scope, joint ventures owned in part by SDC. Bean Stuyvesant is a joint venture owned 50 percent by Bean and 50 percent by SDC. The joint venture is based in Bean’s offices in New Orleans. Of over 400 employees working in Bean and Bean Stuyvesant on U.S. projects, about 97 percent are U.S. citizen Bean employees. Bean Stuyvesant’s CEO and CFO are also U.S. citizen Bean employees.

Third, all vessels chartered to Bean Stuyvesant are owned, managed and crewed by U.S. citizens meeting all Jones Act requirements. Neither Boskalis nor SDC own or control any U.S. flag vessels.

Fourth, the customs ruling regarding re-flagged vessels to which you refer has nothing to do with Bean Stuyvesant, and has never been used by SDC. It is a red herring issue, plain and simple. However, what is relevant is that as a matter of business prudence, U.S. Customs was asked by Bean Stuyvesant before its operations were started, to confirm that Bean Stuyvesant met the requirements of the U.S. Dredging Act. Customs confirmed that it did. Interestingly, last year, in response to a protest of an Army Corps of Engineers project by a U.S. company raising the arguments offered in your editorial, customs reconfirmed its position regarding Bean Stuyvesant. In short, the responsible U.S. government agency has repeatedly held that Bean Stuyvesant complies fully with U.S. law.

It is unfortunate that certain companies seek to use bogus arguments about Jones Act violations and national security threats to cover their plan to reduce competition in the U.S. dredging market. This type of tactic undermines good faith legitimate efforts to sustain the policies of the Jones Act. In our case, the vessels chartered to Bean Stuyvesant meet the letter and intent of all Jones Act standards. Neither the company nor its affiliates receive any subsidy or unfair advantage over the competition.

What is really “un-American” in all this is seeking to use legislation to destroy a competitor. Viability and success of a business should be determined in the marketplace, not in the halls of congress. I trust your magazine’s editors and readers will see it the same way.

Thank you for the opportunity to provide our views.
J.W. Bean, President
C.F. Bean LLC, New Orleans, Louisiana

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