HQ 115538 - Dredging; Pipe-Laying; Vessel; 46 U.S.C. App. § 292 - United States International Trade Commision Rulings

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HQ 115538

December 21, 2001

VES-10-02-RR:IT:EC 115538 GEV

CATEGORY: CARRIER

Glen T. Oxton, Esq.
Healy & Baillie, LLP
29 Broadway
New York, NY 10006-3293

RE: Dredging; Pipe-Laying; Vessel; 46 U.S.C. App. § 292

Dear Mr. Oxton:

This is in response to your letter dated November 29, 2001, with supporting documentation (Exhibits 1-15), on behalf of your client, Iroquois Gas Transmission System (“Iroquois”), requesting a ruling regarding the applicability of 46 U.S.C. App. § 292 to their pipe-laying project. Our ruling on the issues for which you seek resolution is set forth below.

FACTS:

The Iroquois Gas Pipeline Project (the “Project”) involves laying a 24-inch gas pipeline from Northport, Long Island, westward in Long Island Sound and within the East River to Hunts Point in the Bronx, New York. The pipeline will be buried about 3 feet under the surface of the sound and 5 feet under river bottoms.

It is proposed that a foreign-flag lay barge be used to lay the pipe. All other vessels involved in the Project will be qualified for U.S. coastwise trade.

The lay barge is a large work barge equipped with heavy cranes and powerful winches. When in operation, the lay barge is propelled and controlled using an array of 8-12 anchors ranging in size from 5-20 tons. In order to lay pipe, the lay barge winches itself forward against its anchors for about 2,000 feet. Then its anchors are moved by tugs and the process is repeated.

The deck of the lay barge is equipped with pipe-welding stations enabling several sections of pipe to be welded together. The barge also has an examination station where x-rays or other similar methods are used to check the integrity of the welding. After the pipe is welded and checked, it is laid off the specially constructed stern of the lay barge into the water and onto the floor of the Sound or river, as the barge winches itself forward.

The lay barge is essentially a self-contained floating factory. It has accommodations for over 200 persons and also has recreational facilities on board. When laying the pipe for the Project, it will remain continuously at the pipe-laying site and conduct operations 24 hours a day. A more complete description of the lay barge and the other vessels to be used in the project is contained in Exhibit 2.

The primary means of burying the pipe will be a plow pulled by the lay barge; however, as described below, different considerations for excavation and covering the pipe affect three sections of the route. In order to place the pipe below the seabed in the mud bottom sections of the route, the lay barge will pull a plow on the bottom in front of the place where the pipe lands on the bottom or it will pull the plow in a separate operation after the pipe is laid on the bottom. The plow will leave bottom material piled on both sides of the pipe. A description of the plowing procedure is set forth in Exhibit 3 and a detailed description of the plow is provided in Exhibit 4.

The First Ten Miles

The bottom of the Sound in the first ten miles from Northport typically is composed of sand in which use of a plow may not be feasible because the sand might not hold a steep angle trench. Where these conditions are encountered, clamshell buckets will be used from smaller coastwise-qualified vessels. There may be short sections along the entire route where the bottom is too hard for a plow. A clamshell bucket also will be used in these areas.

For 70% of the first two sections of the route, i.e., the Long Island Sound sections, natural forces will be relied upon to cover the pipe. The remaining 30% of these sections require greater protection which will be provided by placing rock over the pipeline.

The Next 20 Miles

The second section of the route covers slightly more than 20 miles in Long Island Sound. The bottom here typically consists of mud in which use of a plow is proposed. The method of covering the pipeline is stated above.

The Final 5 Miles

The final section of the route consists of about 5 miles in the East River. Most of the bottom in this section is mud suitable for use of a plow. The method of coverage in this section is subject to approval of State and Federal authorities due to the concern that the bottom material may contain pollutants. It is anticipated that the applicant will be required to reverse plow or backfill the bottom material moved by the original plowing back over the pipe, then cap the covered pipeline with concrete mats or slabs. In areas where additional protection is required, a layer of rock will be placed over the mats or slabs.

Pipe and all other materials and supplies, as well as provisions and personnel, will be transported to the lay barge by material barges, service vessels and crew boats, all of which will be coastwise-qualified. The lay barge will not transport any materials of construction and will have no transportation function beyond its own mobilization to and from the site.

Iroquois is considering chartering a lay barge from J. Ray McDermott, Inc., Stolt Offshore Inc., or Global Industries. Descriptions of each of the vessels owned by these companies, registered respectively under the flags of Panama, France and Mexico, are set forth in Exhibits 5, 6 and 7.

ISSUES:

Whether the lay barge in question is a “vessel” within the meaning of 46 U.S.C. App. § 292.

Whether the use of a plow from the lay barge or another vessel for the purpose of creating a trench into which a pipeline is laid and re-covered constitutes “dredging” within the meaning of 46 U.S.C. App. § 292.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, § 292 (46 U.S.C. App. § 292, the coastwise dredging statute), provides that with one exception not herein applicable, vessels may not dredge in the navigable waters of the United States unless they meet the requirements of 46 U.S.C. App. § 883 (i.e., built in and documented under the laws of the United States and owned by persons who are citizens of the United States (i.e., a coastwise-qualified vessel)).

Points embraced within the coastwise laws include all points within the territorial waters of the United States, including points within a harbor. The territorial waters of the United States consist of the territorial sea, defined as the belt, three nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landward of the territorial sea baseline, in cases where the baseline and coastline differ.

With respect to the first issue for our consideration, it is your contention that the lay barge in question is not a “vessel” for purposes of 46 U.S.C. App. § 292, but merely a “work platform” and therefore beyond the purview of this statute. In this regard you note that “vessel” is one of the few terms included in the general federal statutory definitions applicable to all federal laws:

The word “vessel” includes every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water. 1 U.S.C. § 3

We note that 46 U.S.C. § 2101(45) incorporates this definition in the general provisions of the shipping laws. We further note that in 19 U.S.C. § 1401(a), a similar definition is found in the Customs laws:

The word “vessel” includes every description of water craft or other contrivance used, or capable of being used, as a means of transportation in water, but does not include aircraft.

In analyzing the above definition with respect to a particular craft, the courts have determined that “[a]s a general principle, where the vessel status of an unconventional craft is unsettled, it is necessary to focus upon the ‘purpose for which the craft is constructed and the business in which it is engaged.’” Gremillion v. Gulf Coast Catering Co., 904

F.2d 290, 293 (1990), citing Blanchard v. Engine & Gas Compressor Servs., Inc., 575 F.2d 1140, 1142 (1978), and The Robert W. Parsons, 191 U.S. 17, 30, 24 S.Ct. 8, 12, 48, 48 L.Ed. 73 (1903) In order to be deemed a “vessel” for general maritime jurisdiction, a craft must be “designed for navigation and commerceand retain such status even while moored, dry-docked, or otherwise immobilized and secured to land.” Cook v. Belden Concrete Products, Inc., 472 F.2d 999, 1001 (1973), citing Cope v. Vallette Dry Dock, 119 U.S. 625, 7 S.Ct. 336, 30 L.Ed. 501 (1887). In determining vessel status, the court in Gremillion stated: “The caselaw is heavily skewed in favor of conferring such status upon craft whose primary mission is the transportation of cargo, equipment, or passengers over navigable waters.” Gremillion at p. 293. The court further provided that, “The greater the structure’s resemblance to conventional seafaring craft, the greater the odds of securing vessel status.” Id. However, as noted in Estate of Wenzel v. Seward Marine Services, Inc., 709 F.2d 1326, 1328 (1983), the fact that a particular craft “was constructed for a purpose other than the transportation of persons or things from one place to another does not mean that as a matter of law, it is not a vessel in navigation.”

As to whether a particular craft resembles a traditional vessel as discussed above, the courts have looked to whether it maintains or possesses the following attributes of traditional vessels: (1) navigational aids; (2) lifeboats and other life-saving equipment; (3) a raked bow; (4) bilge pumps; (5) crew quarters; and (6) registration with the Coast Guard as a vessel. Gremillion, at 293, citing Bernard v. Binnings Construction Co., Inc., 741 F.2d 824, 832, n.25 (1984). The degree to which a particular craft possess these features is indicative as to its legally-recognized status as a vessel. Id.

With respect to the lay barge(s) proposed to be used in the Project, our review of the documentation submitted (specifically, Exhibits 2, 5, 6, and 7) indicates the following. The general description of the craft is that of a “vessel” which has “sleeping quarters, messing, medical and other facilities necessary to support continuous work offshore.” (Exhibit 2) The three specific crafts under consideration are as follows: (1) a Panamanian-flagged “vessel” which possesses navigational/ communication equipment (fax/phone, radio, radar), a sick bay, galley, laundry, movie room, conference room, life-saving equipment (rafts, jackets, buoys, foam system), and 116,000 USG of potable water (Exhibit 5); (2) a “registered French Merchant Ship” with “airconditioned living quarters and mess facilities for 233 men

(excluding hospital capacity to 2 men), a fresh water output of 80 tons per day, navigational and positioning equipment (radar, gyrocompass, repeater compass, echo sounder, navigator), radio communication equipment, and lifesaving appliances (rafts, life ring buoys, etc.) (Exhibit 6); and (3) a Mexican-flagged barge with sleeping quarters for 259 people (Exhibit 7).

Upon reviewing the above-referenced characteristics of the three crafts under consideration, it our position that each of them possess features sufficiently indicative of a vessel which far exceed those of a “work platform designed to receive, weld and lay pipe.”

As to the issue of transportation/navigation, you contend that any transportation function performed by a lay barge is purely incidental to its primary purpose of serving as a platform for the assembly and laying of pipe. In this regard we note that a barge that is built with mobility over navigable waters (such as any of the three under consideration) as one of its features still maintains its status as a vessel notwithstanding the fact that it may be moored at a site for several months. Brunet v. Boh Brothers Construction Co., 715 F.2d 196 (1983) More specifically, we note that a pipe-laying barge, even one which remained afloat and moored in a repair yard, has been held to be a “vessel in navigation”. McDermott, Incorporated v. Boudreaux, 679 F.2d 452 (1982)

The crafts deemed not to be vessels in the cases you cite are distinguishable from those described in Exhibits 2, 5, 6, and 7 in that they did not possess the same judicially-recognized characteristics. (See Cook, supra, concerning a craft not designed for the purpose of navigation but rather for use primarily as a stationary floating construction platform; Leonard v. Exxon Corp., 581 F.2d 522 (1978), concerning three barges lashed together to create a workplace to assemble pipe while “more or less permanently” connected to shore; Watkins v. Pentzien, Inc., 660 F.2d 604 (1981), concerning two barges secured end to end and to the bed of a river that were used to weld and lay pipe in marsh close to the bank of the river; Gremillion, supra, addressing a barge without radar or navigational apparatus, not registered with the Coast Guard and used exclusively as a stationary housing facility in shallow coastal and inland waters; Bernard, concerning a work punt without a deck or crew quarters used as a small platform from which to break cement and guide sheet pilings; and Pavone v. Mississippi Riverboat Amusement Corp., (The BILOXI BELLE), 52 F.3d 560 (1995) concerning an indefinitely moored, shore-side, floating casino.)

Accordingly, it is our position that the lay barge in question is a “vessel” within the meaning of 46 U.S.C. App. § 292.

In regard to the second issue for our consideration, you contend that the proposed activity does not constitute “dredging” for purposes of 46 U.S.C. App. § 292. This activity, which will take place during the last 25 miles of the Project, involves a lay barge pulling a plow on the seabed in front of the place where the pipe lands on the bottom or it will pull the plow in a separate operation after the pipe is laid on the bottom. The plow will leave bottom material piled on both sides of the pipe. Pursuant to the description of the plowing procedure set forth in Exhibit 3, the plow is moved along with the barge at the rate of pipe- laying and is designed to cut a ditch approximately 8 feet deep and 6 to 8 feet wide in front of the pipeline.

With respect to whether a particular activity constitutes “dredging” for purposes of 46 U.S.C. App. § 292, Customs has long-held that this term means the use of a vessel equipped with excavating machinery in digging up or otherwise removing submarine material. (Customs ruling letters 103692, dated December 28, 1978 (published as Customs Service Decision (C.S.D.) 79-331); 109108, dated November 13, 1987; and 109910, dated January 26, 1989; see also Gar-Con Development v. State, 468 So.2d 413 (1985)) Using this definition of “dredging”, Customs has ruled that the use of a foreign-built vessel to tow an underwater sea plow to create a furrow or trench into which pipe is to be laid during the course of a pipe-laying operation constitutes “dredging” within the meaning of 46 U.S.C. App. § 292 and is therefore prohibited. (See C.S.D. 79-331, followed in Customs ruling letter 114487, dated October 21, 1998) In view of the fact that the activity proposed to be accomplished by the lay barge in the Project also concerns the towing of an underwater sea plow to create a furrow or trench into which pipe is to be laid during the course of a pipe-laying operation, we are governed by the holding of C.S.D. 79-331. In regard to the remainder of the administrative decisions cited by you for our consideration (i.e., C.S.D.s 88-7, 89-64, 89-40, and Customs ruling letter 113223, dated September 29, 1994), they address operations that are distinguishable from that under consideration in this case. Consequently, these decisions are not controlling in this matter.

HOLDINGS:

The lay barge in question is a “vessel” within the meaning of 46 U.S.C. App. § 292.

The use of a plow from the lay barge or another vessel for the purpose of creating a trench into which a pipeline is laid and re-covered constitutes “dredging” within the meaning of 46 U.S.C. App. § 292.

Sincerely,

Larry L. Burton

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