[Federal Register: July 26, 2007 (Volume 72, Number 143)]
[Notices]
[Page 41099-41103]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26jy07-81]
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DEPARTMENT OF TRANSPORTATION
Maritime Administration
Revisions to the Voluntary Tanker Agreement
AGENCY: Maritime Administration, Department of Transportation
ACTION: Notice of revised Voluntary Tanker Agreement (VTA); notice of
meeting.
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SUMMARY: The Maritime Administration announces the text of a revised
Voluntary Tanker Agreement, pursuant to Section 708 of the Defense
Production Act of 1950, as amended (50 App. U.S.C. 2158). This text
revises and replaces the Agreement as it was last published in Volume
48 of the Federal Register at page 38715 (August 25, 1983) and is
issued in accordance with the provisions of 44 CFR Part 332. Because
this revised Agreement contains extensive changes, both former and new
participants should submit new applications which are available from
the Maritime Administration. The complete, draft text of the VTA is
published below. Copies of the Agreement and Application are being sent
to U.S. companies that own, operate, or charter tankers and ocean-going
tugs and tank barges. Copies are also available to the public upon
request. The Maritime Administration will also hold a public meeting to
receive input for developing the final text of the VTA.
FOR FURTHER INFORMATION CONTACT: Mr. Thomas Christensen, Director,
Office of Emergency Preparedness, Room W23-304, Maritime
Administration, 1200 New Jersey Avenue, SE., Washington, DC 20590,
(202) 366-5909, tom.christensen@dot.gov.
DATES: An open meeting for the purpose of developing the final text of
the VTA will convene at 10 a.m., Wednesday, August 29, 2007, in
Conference Rooms 8-10, U.S. Department of Transportation, 1200 New
Jersey Avenue, SE., Washington, DC 20590. Notice of intent to attend
given to the point of contact above will assure adequate seating and
more efficient access at security-controlled entrances.
SUPPLEMENTARY INFORMATION:
Text of the Voluntary Tanker Agreement
Table of Contents
Preface
I. Purpose
II. Authorities
A. Maritime Administration
B. U.S. Transportation Command
[[Page 41100]]
III. General
A. Participation
B. Effective Date and Duration of Participation
C. Withdrawal from the Agreement
D. Rules and Regulations
E. Amendment of the Agreement
F. Administrative Expenses
G. Record Keeping
H. Requisition of Ships of Non-Participants
I. Jones Act Waivers
J. Temporary Replacement Vessel
IV. Antitrust Defense
V. Terms and Conditions
A. Agreement by Participants
B. Proportionate Contribution of Capacity
C. Reports of Controlled Tonnage
D. Freight Rates under the Agreement
E. War Risk Insurance
VI. Activation of Agreement
A. Determination of Necessity
B. Tanker Requirements Committee
C. Tanker Charters
D. Termination of Charters under the Agreement
VII. Application and Agreement
Preface
Pursuant to the authority contained in Section 708, Defense
Production Act of 1950 as amended (50 App. U.S.C. 2158) the Maritime
Administrator, (``the Administrator''), after consultation with the
Department of Defense (DoD) and representatives of the tanker industry,
has developed this Voluntary Tanker Agreement. The Agreement
establishes the terms, conditions and procedures under which
Participants agree voluntarily to make tankers available to DoD. The
Agreement further affords Participants defenses to civil and criminal
actions for violations of antitrust laws when carrying out the
Agreement. The Agreement is designed to create a close working
relationship among the Administrator, the Commander of U.S.
Transportation Command (the DoD-designated representative for purposes
of this Agreement) and the Participants through which DoD requirements
and the needs of the civil economy can be met through cooperative
action. The Agreement affords Participants flexibility to respond to
defense requirements and adjust their commercial operations to minimize
disruption whenever possible.
The Secretary of Defense (SecDef) has approved this Agreement as an
Emergency Preparedness Program (EPP) pursuant to 46 U.S.C. 53107.
This is a replacement for the Agreement as it first appeared in
Volume 48 of the Federal Register at page 38715 (August 25, 1983).
Because this replacement contains new substantive provisions, those
wishing to participate in the Agreement should submit new applications.
Voluntary Tanker Agreement
I. Purpose
The Administrator has determined, in accordance with Section
708(c)(1) of the Defense Production Act of 1950 (DPA), that conditions
exist which may pose a direct threat to the national defense of the
United States or its preparedness programs and, under the provisions of
Section 708, has certified to the Attorney General that a standby
agreement for the utilization of tanker capacity is necessary for the
national defense. The Attorney General, in consultation with the
Chairman of the Federal Trade Commission, has issued a finding that
tanker capacity to meet national defense requirements cannot be
provided by the industry through a voluntary agreement having less
anticompetitive effects or without a voluntary agreement.
The purpose of the Agreement is to provide a responsive transition
from peace to contingency operations through procedures agreed in
advance to provide tanker capacity to support DoD contingency
requirements. The Agreement establishes procedures for the commitment
of tanker capacity to satisfy such requirements. The Agreement is
intended to promote and facilitate DoD's use of existing commercial
tanker resources in a manner which minimizes disruption to commercial
operations whenever possible.
The Agreement will change from standby to active status upon
activation by appropriate authority as described in Section VI.
II. Authorities
A. Maritime Administration (MARAD)
1. Sections 101 and 708, DPA (50 App. U.S.C. 2158); E.O. 12919, 59
FR 29525 (June 7, 1994); E.O. 12148, 3 CFR 1979 Comp., p. 412, as
amended; 46 CFR Part 340; DOT Order 1900.9.
2. Section 501 of E.O.12919, as amended, delegated the authority of
the President under Section 708 of the DPA to the Secretary of
Transportation (SecTrans), among others. SecTrans delegated to the
Administrator the authority under which the Voluntary Tanker Agreement
is sponsored in DOT Order 1900.9.
B. U.S. Transportation Command (USTRANSCOM)
1. Section 113 and Chapter 6 of Title 10 of the United States Code.
2. DoD Directive 5158.4 designating Commander USTRANSCOM to provide
air, land, and sea transportation for the DoD.
III. General
A. Participation
1. Tanker operators of vessels greater than 20,000 deadweight tons
may become Participants in this Agreement by submitting an executed
copy of the form specified in Section VII of this Agreement.
2. Owners and operators of Integrated Tug-Barges (ITBs) and
Articulated Tug-Barges (ATBs) greater than 20,000 deadweight tons (DWT)
may become Participants in this Agreement.
3. For the purposes of this Agreement, ``Participant'' includes the
corporate entity entering into this Agreement and all United States
subsidiaries and affiliates of that entity which own or operate ships
in the course of their regular business and in which that entity has
more than fifty (50) percent control either by stock ownership or
otherwise.
4. Vessels of a Participant subject to the provisions of this
Agreement shall not be subject to the provisions of any other DoD
Sealift Readiness Program (SRP).
5. A list of Participants will be published annually in the Federal
Register.
B. Effective Date and Duration of Participation
Participation in this Agreement is effective upon execution of the
application form by the Participant and the Administrator or their
authorized designees and remains in effect until terminated in
accordance with 44 CFR 332.4.
C. Withdrawal From the Agreement
Participants may withdraw from this Agreement subject to the
fulfillment of obligations incurred under the Agreement prior to the
date such withdrawal becomes effective, by giving written notice to the
Administrator. Withdrawal from this Agreement will not deprive a
Participant of an antitrust defense otherwise available to it in
accordance with DPA Section 708 for the fulfillment of obligations
incurred prior to withdrawal. A Participant otherwise subject to the
DoD SRP that voluntarily withdraws from this Agreement will become
subject again to the DoD SRP.
D. Rules and Regulations
Participants acknowledge and agree to abide by all provisions of
Section 708, DPA, as amended (50 App. U.S.C. 2158), and regulations
related thereto which are promulgated by the SecTrans, the Attorney
General, and the Chairman of the Federal Trade Commission.
[[Page 41101]]
Standards and procedures pertaining to voluntary agreements have been
promulgated in 44 CFR Part 332. The Administrator shall inform
Participants of new rules and regulations as they are issued.
E. Amendment of the Agreement
1. The Attorney General may modify this Agreement, in writing,
after consultation with the Chairman of the Federal Trade Commission,
SecTrans, through her representative MARAD, and SecDef, through his
representative, Commander USTRANSCOM. The Administrator, Commander
USTRANSCOM and Participants may modify this Agreement at any time by
mutual agreement, but only in writing with the approval of the Attorney
General and the Chairman of the Federal Trade Commission.
2. A Participant may propose amendments to the Agreement at any
time.
F. Administrative Expenses
Administrative and out-of-pocket expenses incurred by Participants
shall be borne solely by participants.
G. Record Keeping
1. MARAD and the DoD have primary responsibility for maintaining
records in accordance with 44 CFR Part 332.
2. The Director, Office of Emergency Preparedness, MARAD, shall be
the official custodian of records related to the carrying out of this
Agreement, except records of direct dealings between the DoD and
Participants.
3. For direct dealings between the DoD and Participants, the
designee of the SecDef shall be the official custodian of the record
but the Director of the Office of Emergency Preparedness, MARAD shall
have complete access thereto.
4. In accordance with 44 CFR 332.3(d), each Participant shall
maintain for five years all minutes of meetings, transcripts, records,
documents, and other data, including any communications with other
Participants or with any other member of the industry, related to the
carrying out of this Agreement. Each Participant agrees to make
available to the Administrator, the Commander USTRANSCOM, the Attorney
General, the Director of the Federal Emergency Management Agency, and
the Chairman of the Federal Trade Commission for inspection and copying
at reasonable times and upon reasonable notice any item that this
section requires the Participant to maintain. Any record maintained
under this subsection shall be available for public inspection and
copying, unless exempted on the grounds specified in 5 U.S.C. 552(b)(1)
and (3) or identified as privileged and confidential information in
accordance with Section 705(e) of the DPA, as amended, and 94 CFR Part
332.
H. Requisition of Ships of Non-Participants
The Administrator upon presidential authorization may requisition
ships of non-Participants to supplement capacity made available for
defense operations under this Agreement and to balance the economic
burden of defense support among companies operating in U.S. trade. Non-
Participant owners of requisitioned tankers will not participate in the
Tanker Requirements Committee and will not enjoy the immunities
provided by this Agreement.
I. Jones Act Waivers
In situations where the activation of the Agreement deprives a
Participant of all or a portion of its Jones Act tonnage and, at the
same time, creates a general shortage of Jones Act tonnage on the
market, the Administrator may request that the Assistant Commissioner,
Office of Regulations and rulings, U. S. Customs and Border Protection,
Department of Homeland Security grant a temporary waiver of the
provisions of the Jones Act to permit a Participant to charter or
otherwise utilize non-Jones Act tonnage. The tonnage for which such
waivers are requested will be approximately equal to the Jones Act
tonnage chartered to the DoD and any waiver that may be granted will be
effective for the period that the Jones Act tonnage is on charter to
the DoD plus a reasonable time for termination of the replacement
tonnage charters as determined by the Administrator.
J. Temporary Replacement Vessel
Notwithstanding 10 U.S.C. 2631, 46 U.S.C. 55304 (formerly Public
Resolution 17), 46 U.S.C. 55302, 55305, 55312 or 55314 (formerly
Sections 901(a), 901(b), and 901b of the Merchant Marine Act, 1936), or
any other cargo preference law of the United States--
1. A Participant may operate or employ in foreign commerce a
foreign-flag vessel or foreign-flag vessel capacity as a temporary
replacement for a United States-documented vessel or United States-
documented vessel capacity that is activated by the SecDef under an
Emergency Preparedness Agreement or under a primary DoD-approved SRP;
and
2. Such replacement vessel or vessel capacity shall be eligible
during the replacement period to transport preference cargoes subject
to 10 U.S.C. 2631, 46 U.S.C. 55304 (formerly Public Resolution 17), and
46 U.S.C. 55302, 55305, 55312 or 55314 (formerly Sections 901(a),
901(b), and 901b of the Merchant Marine Act, 1936) to the same extent
as the eligibility of the vessel or vessel capacity replaced.
IV. Antitrust Defense
Under the provisions of Subsection 708(j), DPA, as amended (50 App.
U.S.C. 2158(j)), each Participant in this Agreement shall have
available as a defense to any civil or criminal action brought for
violation of the antitrust laws, with respect to any act or omission to
act to develop or carry out this Agreement, that such act or omission
to act was taken in good faith by the Participant in the course of
developing or carrying out this Agreement and that the Participant
fully complied with the provisions of the Act, and the rules
promulgated thereunder, and acted in accordance with the terms of this
Agreement. This defense shall not be available to the Participant for
any act or omission occurring after the termination of this Agreement,
nor shall it be available, upon the modification of this Agreement,
with respect to any subsequent act or omission that is beyond the scope
of the modified Agreement, except that no such termination or
modification will be accomplished in a way that will deprive
Participants of antitrust defense for the fulfillment of obligations
incurred. This defense shall be available only if and to the extent
that the Participants asserting it demonstrate that the action, which
includes a discussion or agreement, was within the scope of the
Agreement. The person asserting the defense bears the burden of proof.
The defense shall not be available if the person against whom it is
asserted shows that the action was taken for the purpose of violating
the antitrust laws.
V. Terms and Conditions
A. Agreement by Participants
1. Each Participant agrees to contribute tanker capacity as
requested by the Administrator in accordance with Section V. B. below,
at such times and in such amounts as the Administrator, as requested by
DoD, shall determine to be necessary to meet the essential needs of the
DoD for the transportation of DoD MILSPEC petroleum and petroleum
products in bulk by sea.
2. Each Participant further agrees to make tankers and tanker
capacity available to other Participants when requested by the
Administrator, on the advice of the Tanker Requirements Committee, in
order to ensure that
[[Page 41102]]
contributions to meet DoD requirements are made on a proportionate
basis whenever possible or to ensure that no participating tanker
operator is disproportionately hampered in meeting the needs of the
civil economy in accordance with priorities established by authority of
the President.
B. Proportionate Contribution of Capacity
1. Any entity receiving payments under the Maritime Security
Program (MSP) pursuant to the Maritime Security Act of 2003 (MSA 2003)
(Pub. L. 108-136) shall become a Participant with respect to all
tankers enrolled in the MSP at all times until the date the MSP
operating agreement would have terminated according to its original
terms. Such participation will satisfy the requirement for an MSP
participant to be enrolled in an emergency preparedness program
approved by SecDef as provided in 46 U.S.C. Sec. 53107.
2. Participants hereto not receiving MSP payments pursuant to MSA
2003 agree to contribute tanker capacity under the Agreement in the
proportion that its ``controlled tonnage'' bears to the total
``controlled tonnage'' of all Participants. Because exact proportions
may not be feasible, each Participant agrees that variances are
permissible at the discretion of the Administrator.
3. Clean tankers and clean tonnage shall mean tankers inspected and
approved by DESC Quality Representatives, capable of meeting DoD
quality standards, and able to carry refined MILSPEC petroleum
products.
a. Chemical tankers and tankers in dirty trade may contribute clean
tanker capacity only after being certified as being able to meet DoD
quality standards to carry refined MILSPEC petroleum products.
4. ``Controlled tonnage'' shall mean tankers, including ITBs and
ATBs of over 20,000 DWT capacity and present military usefulness in the
transportation of refined DoD cargoes pursuant to the requirements of
associated warplans:
a. In which, as of the effective date of the activation of this
Agreement, the Participant or any of its U.S. subsidiaries or
affiliates has a controlling interest and which are registered in any
of the following countries: The United States, Liberia, Panama,
Honduras, the Bahamas, or the Marshall Islands; PLUS
b. Ships which are on charter or under contract to such Participant
for a period of six (6) months or more from the effective date of
activation of the Agreement, regardless of flag of registry, exclusive
of tonnage available to the Participant under contracts of
affreightment and consecutive voyage charter; provided that, in the
event an owner of a vessel terminates a time charter in accordance with
a war clause, the affected tonnage will be excluded from the chartering
Participant's controlled tonnage; PLUS
c. Any other non-U.S.-flag tonnage which a Participant may offer to
designate as ``controlled tonnage'' and which the Tanker Requirements
Committee accepts; MINUS
d. Tankers described in subparagraphs, a. and b. which are
chartered out or under contract to others for a remaining period of six
(6) months or more from the effective date of activation of this
Agreement: MINUS
e. Certain vessels which are fitted with special gear and are on
permanent station for the storage of crude oil from a production
platform and vessels which may have a dual role of production storage
and transportation use to a limited location.
5. This Agreement shall not be deemed to commit any vessel with
respect to which the law of the country of registration requires the
approval of the government before entering into this Agreement of
furnishing such vessel under the terms of this Agreement until such
time as the required approval has been obtained.
6. The obligations of Participants to contribute clean capacity
under the Agreement shall be calculated on a proportionate basis
wherever possible among the Participants by the Tanker Requirements
Committee.
7. A vessel on charter to a Participant shall not be subject to a
relet to the DoD in the case where the period of the relet would be
longer than the term of the Participant's incharter or in the case
where the relet would otherwise breach the terms of the incharter, but
such tonnage shall be included in the calculation of the Participant's
``controlled tonnage''.
8. The Administrator retains the right under law to requisition
ships of Participants. A Participant's ships which are directly
requisitioned by the U.S. Government or which are called up pursuant to
other U.S. Government voluntary arrangements shall be credited against
the Participant's proportionate contribution under this Agreement.
Ships on charter to the DoD when this Agreement is activated shall not
be so credited.
C. Reports of Controlled Tonnage
Twice annually, or upon request of the Administrator and in such
form as may be requested, each Participant shall submit information as
to ``controlled tonnage'' necessary for the carrying out of this
Agreement. Information which a Participant identifies as privileged and
confidential shall be withheld from public disclosure in accordance
with Sections 708(h)(3) and 705(e) of the DPA, as amended, and 44 CFR
Part 332.
D. Freight Rates Under the Agreement
1. The rate of charter hire applicable to each charter under this
Agreement shall be the ``prevailing market rate'' effective at the time
of the proposed loading of the vessel. The ``prevailing market rate''
shall be determined by the Military Sealift Command (MSC) Contracting
Officer utilizing the price analysis techniques set forth in FAR Part
15.4 to determine that the negotiated rates are fair and reasonable,
utilizing market or previous contract prices. Time charter hire rates,
for either U.S. or foreign-flag tankers, shall be expressed in terms of
a per diem rate(s).
2. The rate of charter hire fixed with respect to each charter
shall apply for the entire period of the charter, except that:
a. For a consecutive voyage charter, the rate of charter shall be
increased or decreased to reflect increases or decreases in the price
of bunker fuel applicable in the area of the vessel's trade;
b. Reimbursement for increased war risk insurance premiums will be
made in accordance with section V.E.;
E. War Risk Insurance
1. Increased War risk insurance premiums for time chartered vessels
will be paid by DoD or MARAD war risk insurance policies will be
implemented.
2. For voyage and consecutive voyage charters, the Participant will
be reimbursed for increases in war risk insurance premiums that are
applicable to the actual voyage but are announced after the charter
rate is established by the broker panel.
3. For any ship chartered under this Agreement, the SecDef may
procure from the SecTrans war risk insurance on hull and machinery, war
risk protection and indemnity insurance, and Second Seaman's War Risk
Insurance, subject to 46 U.S.C. Sec. 53905 (formerly Section 1203 of
the Merchant Marine Act, 1936).
VI. Activation of the Agreement
A. Determination of Necessity
This Agreement may be activated at the request of The Commander
USTRANSCOM, with the approval of SecDef, to support Contingency
operations when there is a tanker capacity emergency. A tanker capacity
emergency will be deemed to exist when tanker capacity required to
[[Page 41103]]
support operations of U.S. forces outside the continental United States
cannot be supplied through the commercial tanker charter market in
accordance with applicable laws and regulations or other voluntary
arrangements. The Administrator shall notify the Attorney General and
the Chairman of the Federal Trade Commission, when such a finding is
made.
B. Tanker Requirements Committee
1. There is established a Tanker Requirements Committee (the
``Committee'') to provide USTRANSCOM, MARAD and Participants a forum
to:
a. Analyze DoD Contingency tanker requirements.
b. Identify commercial tanker capacity that may be used to meet DoD
requirements related to Contingencies and, as requested by USTRANSCOM,
exercises, and special movements.
c. Develop and recommend Concepts of Operations (CONOPS) to meet
DoD-approved Contingency requirements and, as requested by USTRANSCOM,
exercises and special movements.
d. Advise the Administrator on the tanker capacity that each
Participant controls and is capable of meeting Contingency
requirements.
2. The Committee will be co-chaired by MARAD and USTRANSCOM and
will convene as jointly determined by the co-chairs.
3. The Committee will not be used for contract negotiations and/or
contract discussions between carriers and DoD; such negotiations and/or
discussions will be in accordance with applicable DoD contracting
policies and procedures.
4. The Committee will consist of designated representatives from
MARAD, USTRANSCOM, to include Military Sealift Command, Defense Energy
Support Center, each Participant, and maritime labor. Other attendees
may be invited at the discretion of the co-chairs. Representatives will
provide technical advice and support to ensure maximum coordination,
efficiency and effectiveness in the use of Participants resources. All
Participants will be invited to open Committee meetings. For selected
Committee meetings, attendance may be limited to designated
Participants to meet specific operational requirements.
5. The Committee co-chairs shall:
a. Notify the Attorney General, the Chairman of the Federal Trade
Commission, and all Participants of the time, place and nature of each
meeting and of the proposed agenda of each meeting to be held to carry
out this Agreement:
b. Provide for publication in the Federal Register of a notice of
the time, place and nature of each meeting. If a meeting is open, a
Federal Register notice will be published reasonably in advance of the
meeting. If a meeting is closed, a Federal Register notice will be
published within ten (10) days of the meeting and will include the
reasons why the meeting is closed;
c. Establish the agenda for each meeting and be responsible for
adherence to the agenda;
d. Provide for a written summary or other record of each meeting
and provide copies of transcripts or other records to the Attorney
General, the Chairman of the Federal Trade Commission, and all
Participants; and
e. Take necessary actions to protect confidentiality of data
discussed with or obtained from Participants.
C. Tanker Charters
MSC, as designated by USTRANSCOM, will deal directly with tanker
operators in the making of charter parties and other arrangements to
meet the defense requirement, keeping the Administrator informed. To
reduce risk to owners and to control cost to the government, all
government charters will be time charters, unless specifically
designated as voyage charter by the Contracting Officer. If vessels are
chartered between Participants, Participants will keep the
Administrator informed. The Administrator will keep the Attorney
General and the Chairman of the Federal Trade Commission informed of
the actions taken under this Agreement.
D. Termination of Charters Under the Agreement
MSC, as the contracting officer, will notify the Administrator as
far as possible in advance of the prospective termination of the need
for tanker capacity under this Agreement
VII. Application and Agreement
The Administrator has adopted and makes available a form on which
tanker operators may apply for and become Participants in this
Agreement (``Application and Agreement to Participate in the Voluntary
Tanker Agreement''). The form will incorporate by reference the terms
of this Agreement.
Application and Agreement To Participate in the Voluntary Tanker
Agreement
The applicant identified below hereby applies to participate in
the Maritime Administration's agreement entitled ``Voluntary Tanker
Agreement.'' The text of said Agreement is published in ----Federal
Register ------, ----, 2007. This Agreement is authorized under
Section 708 of the Defense Production Act of 1950, as amended (50
App. U.S.C. 2158). Regulations governing is Agreement appear at 44
CFR Part 332 and are reflected at 49 CFR Subtitle A.
The applicant, if selected, hereby acknowledges and agrees to
the incorporation by reference into this Application and Agreement
of the entire text of the Voluntary Tanker Agreement published in --
Federal Register ------, ----, 2007, as though said text were
physically recited herein.
The applicant, as Participant, agrees to comply with the
provisions of Section 708 of the Defense Production Act of 1950, as
amended, the regulations of 44 CFR Part 332 and as reflected at 49
CFR Subtitle A, and the terms of the Voluntary Tanker Agreement.
Further, the applicant, if selected as a Participant, hereby agrees
to contractually commit to make vessels or capacity available for
use by the Department of Defense and to other Participants for the
purpose of meeting national defense requirements.
Attest:
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(Applicant--Corporate Name)
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(Signature)
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(Position Title)
United States of America, Department of Transportation, Maritime
Administration
By:--------------------------------------------------------------------
Maritime Administrator
By Order of the Maritime Administrator.
Dated: July 19, 2007.
Daron T. Threet,
Secretary, Maritime Administration.
[FR Doc. E7-14534 Filed 7-25-07; 8:45 am]
BILLING CODE 4910-81-P