February - March 2001
We're 5 years old!
Five years ago this January, we launched the first issue of Hawaii
Ocean Industry & Shipping News, the product of months of planning
and input from many of you in the industry. Along the way we received
comments that ranged from "You're crazy" to "Great idea."
We put the skeptics' opinions aside and forged ahead in the belief that
there was a need for a publication dedicated to news for and about Hawaii's
multi-billion-dollar ocean industry. In 1997 we expanded our horizons
with the publishing of our first annual Hawaii Port Directory and Hawaii
Our Website, hawaiiocean.com
went online in July, 1999, making our publications as well as weather
information and other resource links available at the click of a mouse.
As we celebrate five years in business, I want to take this opportunity
to thank the many individuals, companies and government agencies whose
advertising support, story ideas and photos, editorial contributions
and helpful feedback have made this magazine one heck of a fun voyage
Terry White, Publisher
Hawaii maritime industry advocate Clint Taylor has formed his own company,
Clint Taylor Consul-tants, specializing in public affairs and business
development in both maritime and non-maritime industries. Taylor was
public affairs manager at CSX Services for the past 4-1/2 years, and
previously had his own consulting business.
Robin Cababa has joined the Oceanic Institute as director of research
operations, responsible for the oversight of research operations, budget,
facilities usage and coordination of research activities among all programs.
Cababa was formerly with the U.S. Army Engineer Research and Development
Center in Vicksburg, Miss. Also at the institute, Dr. Tomonari Kotani,
a distinguished researcher from Nagasaki University's Faculty of Fisheries,
will complete a one-year sabbatical at OI as a visiting researcher.
While here, he will continue his research into marine invertebrate zoology.
American Classic to relocate headquarters
American Classic Voyages Co., parent company of American Hawaii Cruises
and United States Lines, is relocating its present New Orleans operational
offices and Chicago corporate headquarters to Sunrise, Florida, thanks
to a $4.2 million economic incentive package from the state and county
governments in Florida.
AMCV, the largest American cruise company, will be the lead tenant in
a new six-story, 240,000-square-foot building that broke ground on Jan.
16. The company plans to move into its new headquarters in November
of this year.
Upon occupancy of its new headquarters facility, AMCV will receive an
annual tax refund of $543,750 for four years, beginning in fiscal 2002-2003,
under Florida's Qualified Target Industry Tax Refund Program. The refunds
are part of a total economic incentive package of more than $4.2 million,
including state job training funds and cash grants approved earlier
by Broward County and the City of Sunrise.
Snapper spawning success
The Oceanic Institute recently achieved natural spawns of red snapper
in captivity, the first recorded for red snapper in almost 25 years.
This also is the first record of spawning outside the species' natural
reproductive season. While many organizations have been working towards
this goal, OI is the first to bring captive red snapper to maturity
and to create the conditions necessary for a natural spawning.
Red snapper populations have been steadily declining, and OI is leading
the development of culture technology in an effort to restore wild populations
in the Gulf coast region.
OI President and CEO Dr. Thomas Farewell said, "OI's history of
success in closing the lifecycle for a variety of species makes it uniquely
qualified to make the breakthroughs necessary to culture snappers, ornamentals
and other important species. This program will be a high priority for
OI as it races to address the problems of seafood shortages and environmental
Second Jones Act auto carrier planned
Pasha Hawaii Transport Lines LLC (PHTL), the joint venture of The Pasha
Group and Van Ommeren Shipping (USA) LLC, has exercised its option with
Halter Marine for the construction of a second U.S.-built Jones Act
Pure Car and Truck Carrier. According to George W. Pasha, IV, president
and CEO of PHTL, "The response we received when we announced our
plans [last fall] for deployment of the first vessel in the Hawaii/Mainland
trade was well beyond our expectations and the second vessel will only
better serve this market."
The Hawaii/Mainland trade currently generates over 150,000 vehicles
per year. A second vessel, which will be a sister ship to the 13,000-DWT
vessel under construction at Halter Marine in Pascagoula, Miss., will
enhance the service offering of PHTL by providing increased frequency
This first vessel has a capacity for 4,300 vehicles and is scheduled
for a spring 2002 delivery. Combined with the sister vessel, the two
ships will provide weekly service between Hawaii and two California
Hawaiian Maritime Industry Day 2001
The US Coast Guard Marine Safety Office Honolulu presents the 11th
Annual Hawaiian Maritime Industry Day Ñ Hawaii's premier maritime
community event Ñ on Thursday, March 1, at the Hawaii Convention
Center in Waikiki. Hawaii Ocean Industry and Shipping News is one of
the sponsors of the day-long conference, which will cover a variety
of maritime-related topics in a convention-style program.
The $35 admission fee includes a continental breakfast, luncheon, conference
and breakout sessions, industry exhibits, and reception. Parking is
$5 for 8 hours.
Breakout sessions will cover safety, environmental, regulatory and operational
issues affecting Hawaii's ports.
Register online at www.aloha.net/~msohono/iday
by Feb. 14 or call USCG MSO-Honolulu for information, (808) 522-8256.
Exhibitor Booth Space Available
In addition to the conference sessions there will be an exhibitor's
hall with vendors and organizations presenting their services, products
and information. Booth space is limited and is available by calling
Terry White at Hawaii Ocean Industry & Shipping News,
2001 Maritime Legislative Initiatives
by Clint Taylor
The Hawaii Maritime Conference IV (HMC IV), held last November, had
a very broad and diverse group of 120 representatives of maritime businesses
and unions, state legislators and administrators, federal officials,
and a visiting delegation from the Northwest Cruise Line Association.
Conference attendees focused upon issues of ensuring sufficient container
yard space for continued economic growth, sufficient berthing and terminal
facilities for both domestic and international cruise lines, and sufficient
funding for small boat harbors that serve both ocean tourism and recreational
In the intervening seven weeks between the end of the conference and
the opening of the 2001 legislative session in January, bills were drafted
and various groups have gotten behind various recommendations of HMC
First and foremost, the Maritime Committee of the Chamber of Commerce
of Hawaii is unanimously supporting five of the conference's recommendations:
• Capital advancement - SB 755
• Maritime land for maritime use - SB 754
• Non-maritime use of DLNR DOBOR back-up lands - SB 752
• Expedite Kapalama container yard development
• Website bill status coordination and cooperation
Senator Cal Kawamoto and the Ocean Tourism Coalition support a sixth
recommendation: Consolidate the Department of Land and Natural Resources
Division of Boating and Ocean Recreation (DOBOR) with DOT-Harbors Division
- SB 757.
The last two conference recommendations - continuation of the ferry
system and general fund support for DLNR DOBOR - have various constituencies
Bills to track:
The six maritime bills introduced by Sen. Kawamoto include:
SB 752 Expansion of non-maritime use of DOBOR backup lands
This bill expands the non-maritime use of DOBOR backup lands. It
would allow ancillary and supportive uses of such backup lands in
partnership with the private sector to increase the revenue stream
to support public shoreside improvements.
SB 753 Hawaii Port Authority
This bill, establishing a port authority, received much attention
during the 1998 session and was reintroduced this year, although there
is not consensus in the maritime
The bill would put maritime land in the port authority jurisdiction.
A Port Authority Board, not DLNR's Land Board, would pass on final
disposition of such land. The bill offers more complete control over
maritime lands by the maritime sector but it presents other issues.
For a port authority bill to be successful, it has to address concerns
raised in the past that the Port Authority Board would be another
layer of bureaucracy, that interest groups other than maritime users
could control one or more seats on the board, and that DLNR DOBOR
does not drain DOT Harbors of funds or staff time.
SB 754 Maritime lands for maritime use.
This bill requires that DLNR's Land Board define lands for maritime
use regardless of which state department they are in, and that it
consider the requirements of water dependent maritime users prior
to committing such land for non-maritime use.
Since the legislature passed a maritime lands definition bill last
session, the maritime industry believes that this bill has a good
chance to go through again this year without the additional caveat
that was in last year's bill that restricted the Hawaii Community
Development Authority (HCDA) to only maritime use of Piers 1 and 2.
Governor Cayetano vetoed last year's bill stating that it limited
his flexibility with respect to land use. The new bill states that
the requirements of maritime users for maritime land need to be considered
before land is committed in perpetuity for non-maritime use. This
is more flexible than "restricted to maritime use."
SB 755 Capital advancement
This bill is essentially the same as last year's "cost reimbursement"
bill (SB 2300), allowing private development of maritime facilities
on state land with reimbursement over time through fee and lease rent
The maritime industry will request a limit of total capital for this
program of $2 million for each fiscal year to start to increase the
chance of passage of this bill. However, the bill initially retains
the original language from last year, allowing for an unlimited number
of projects up to $2 million each, to be negotiated directly by DOT-Harbors,
and up to $5 million per project to be accomplished with legislative
approval. Discretion would be left up to DOT-Harbors to put an annual
limit on the use of this tool.
SB 756 Public Service Company taxes for passenger cruise facilities
Senator Kawamoto chose to reintroduce this bill that passed, but
was vetoed by Governor Cayetano last year on the grounds that it reduced
his flexibility over funds destined for the general fund. The senator
wants to see how the maritime and visitor industry communities view
this initiative this year.
SB 757 Transfer DOBOR back to DOT Harbors
Senator Kawamoto and the Ocean Tourism Coalition support this bill
to recombine these two state agencies, first separated in 1991, due
to the increasing commercial activities of the small boat harbors
today. The intent of this consolidation is to achieve economies of
scale through the elimination of duplicative functions. Opponents
are concerned that DOBOR will drain DOT-Harbors of dollar resources
and critical planning and engineering staff time necessary to expedite
priority commercial harbor projects.
Two bills introduced as part of the Governor's package are not supported
by the maritime industry:
SB 1170/HB 695 Designating a portion of Kapalma Military Reservation
as an industrial park
These companion bills go counter to the Oahu Commercial Harbors 2020
Master Plan which earmarks Kapalama as the principal container yard
expansion area for Hawaii. The maritime industry requires all of this
approximately 75-acre area to remain in the DOT-Harbors portfolio
and to be developed as a container yard as soon as possible.
Hawaii cannot afford to have 12.6 acres re-designated as a DLNR industrial
park relocation site for state lessees being displaced by HCDA development
in the Kakaako waterfront area. While the industry sympathizes with
the need to designate state land for relocation of displaced lessees,
Kapalama is prime maritime land and is not the place for such relocation.
The maritime industry and the broader maritime community look forward
to the 2001 legislative session and to the continued excellent legislative
support of initiatives upon which we come to a consensus.
Clint Taylor, HMC IV coordinator and president of Taylor Consultants,
is a management consultant specializing in public affairs and business
development in both maritime and non-maritime sectors.
For Your Information
For online access to texts of bills and resolutions, hearing notices,
legislative timetable and links to lawmakers, visit the State Capitol
Web site at www.capitol.hawaii.gov/
Information also is available at the Public Access Room at the Capitol,
Matson Launches $31.5 Million Facility Upgrade
by Mele Pochereva
Matson Navigation Company's recent addition of 500 new 45-foot chassis
and 500 new 45-foot high-cube dry containers is the latest step in a
multi-million- dollar capital investment program at the company's Sand
Island terminal. Last year, Matson invested $22 million in new container
equipment. The equipment acquisitions are part of a $31.5 million conversion
from a straddle carrier operation to a partial-wheel operation.
With container storage space on Sand Island at capacity, and the state's
planned container facilities at Kapalama Military Reservation still
10 years away, Matson has embarked upon its own plan to expand capacity
and efficiency at its 110.5-acre facility.
The project, called Team 2000, is scheduled for completion in late 2001.
Matson expects the upgrades to increase the terminal's capacity by 30
percent and result in a more efficient operation. The project also will
help the company accommodate expected increases in container volume
until additional terminal space is available at Sand Island.
Explains Brad Mulholland, Matson president and CEO, "Our goals
are threefold: To provide world class service to our customers and the
trucking community that uses the terminal, to have the most efficient
terminal operation for any similar sized terminal in the United States,
and to accommodate projected growth through the year 2020."
Matson's operations in Oakland, Seattle and Terminal Island are all
partial wheeled facilities. Unlike a straddle carrier operation, which
requires containers to be transported to and from vessels and trucks
by straddle carriers, a partial wheeled operation allows truckers to
pick up and drop off containers unassisted.
"Instead of making truckers wait to be serviced by a straddle carrier,
a partial wheeled facility will allow truckers to merely connect or
disconnect with the container/chassis combination at a designated location
in the container yard, which should save a lot of time," says Gary
North, president of Matson Terminals, Inc.
One of the challenges Matson faces is how to convert the terminal without
any disruption to its operations. The first phase of the project will
begin the partial wheeled operation by keeping all loaded containers
on wheels and stacking autos and empty containers in block-stow areas
to be handled by top or side picks.
Phase two will include reinforcing 30 acres or pavement to accommodate
the use of top picks, which have heavier wheel loads for stacking loaded
containers. This second phase should increase the terminal's capacity
by 30 percent, allowing the company to accommodate container volume
increases at least to the year 2010, when the state expects to have
a new Kapalama facility available for CSX Lines. At that time, Matson
would expand into the existing
Saving Pago Pago
by Eric Hedaa
Dec. 10, 1991, was a very bad day for American Samoa. The U.S. territory
lay directly in the path of Hurricane Val. Val attacked Tutuila Island
with devastating force, killing four people, injuring 200 and leaving
4,000 people homeless.
Pago Pago Harbor, the island's only major port, was left in complete
chaos. Val broke nine longliner fishing vessels from their moorings
and tossed the 170-foot, 300-ton vessels along the northeastern reefs
of the harbor like plastic toys.
Val's initial destruction of Pago Pago would have far reaching effects.
After grounding, the nine vessels began leaking diesel fuel and oil
into the sensitive coral reef ecosystem.
U.S. Coast Guard marine safety inspectors stationed in American Samoa
found the vessels' owners unwilling to salvage their vessels or take
responsibility for the damage they were causing, so they called for
Within 48 hours, Coast Guard pollution response teams from Marine Safety
Office Honolulu and the Pacific Strike Team stepped out of a Coast Guard
C-130 Hercules long-range rescue aircraft onto the runway of Pago Pago
International Airport with orders to save Pago Pago Harbor.
An estimated 1,500 gallons of diesel oil were already awash in the surf.
If nothing was done to contain the leakage, the vessels would spill
another 100,000 gallons of oil onto the reef.
The Coast Guard, with the help of salvage crews from Honolulu-based
Pacific Environmental Corp. (PENCO) and Harbor Refuse and Environmental
Services of American Samoa, immediately went to work. They found six
of the nine vessels were dangerously unstable. It was decided the best
strategy was to contain the oil spills around these six vessels with
booms and soak up the pollutants with absorbent pads.
Once the discharge of diesel oil from the six longliners was contained,
the crews turned their efforts to removing the oil and other pollutants
from the three remaining vessels, which were hard aground and stable
enough to work on.
By Dec. 13th, three days after Val struck, 12,000 gallons of diesel,
oil and hydraulic fluid had been transferred from three of the longliners,
and the discharge of diesel oil from the other six had dissipated. With
the immediate pollution threat diminished, the two Coast Guard teams
focused their energies on helping reestablish Pago Pago Harbor as a
"We fixed a lot of aids to navigation because almost all the aids
were blown over," said Petty Officer 2nd Class Domenic Santoro,
one of the five Coast Guardsmen flown in to respond to the hurricane's
damage. "We also helped rebuild people's roofs."
Coast Guard pollution response teams left American Samoa knowing they'd
kept more than 12,000 gallons of oil from Pago Pago's reef. However,
an undetermined amount of oil and other pollutants remained aboard the
six longliners awash in the surf. These vessels were too unstable for
surveyors to inspect thoroughly, let alone remove. It was possible that
these vessels would eventually spill oil and other pollutants onto the
reef if they weren't salvaged.
The Coast Guard investigators who began hunting for the responsible
parties faced a challenging and frustrating task. All of the vessels
were registered in foreign countries to companies that had declared
bankruptcy days before Val hit.
As the years passed and the investigators continued running into dead
ends, the Coast Guard, the Environmental Protection Agency, and the
government of American Samoa began looking for other means of removing
the longliners and their pollutants.
Pollution threat resurfaces
In February of 1997, time ran out. An oily sheen appeared on the water
surrounding one of the longliners. With the discovery of a new oil leak,
the Coast Guard stepped in again. Coast Guard Marine Safety Detach-ment
American Samoa responded to the report and found a small amount of oil
seeping from one of the longliners, the Koram No. 3.
A May 27, 1998, report from the National Oceanic and Atmospheric Administration
Damage Assessment Center and Coast Guard Marine Safety Office Honolulu
stated that an imminent pollution threat existed. Two of the vessels
were in danger of falling apart.
"The vessels were rusting; changing chemically," said Lt.
Cmdr. John Sifling, the chief of port operations at MSO Honolulu. "They
were falling apart, moving around and spreading debris all over the
Each of the vessels also held an undetermined amount of ammonia in their
refrigeration systems. Ammonia is highly soluble in water and even small
amounts are highly toxic to a wide range of organisms. And there existed
the potential for another storm to refloat the vessels and cause more
damage to the reef or to other vessels.
A plan was developed to permanently resolve the problem. It was decided
to remove all of the pollutants from the nine longliners, cut the vessels
into pieces, load them onto a barge and dump them offshore in 10,000
feet of water.
The project was huge. Just reaching the vessels, which were hundreds
of feet offshore, required a couple of major construction projects.
Salvage workers built causeways from shore that were large enough to
support the heavy machinery necessary to cut the vessels apart.
On Aug. 7, 1999, crews from PENCO began building a causeway to the first
three longliners. Salvage workers used a hydraulic sheer — monstrous,
industrial-strength tin snips — to cut into the three vessels
and access their fuel tanks. Pumps and hoses were used to pump out the
pollutants. A temporary dump was set up where pollution-containment
bladders, tanker trucks and dump trucks off-loaded the pollutants and
eventually, the cut-up pieces of seven vessels.
After the pollutants were removed, the cutting and removal of the hulls
continued until nothing of the vessels remained above the water. Oil
and other chemicals were cleaned off the huge piles of scrap metal before
the scraps were trucked to a barge, towed offshore and dumped.
The work was labor intensive, dangerous and expensive; made more so
by the lack of blueprints for any of the vessels to show where their
fuel tanks and pressurized systems were.
With so much effort going into deconstructing the vessels, expenses
were piling up faster than the scrap metal. The project was being paid
for with money from the Oil Spill Liability Trust Fund and the Comprehensive
Environmental Response Compensation and Liability Act, both established
after the Exxon Valdez disaster, but everyone involved was looking to
keep costs as low as possible.
During a discussion between Sifling, Capt. Gilbert Kanazawa, the commanding
officer at MSO Honolulu, and Lt. Cmdr. Bob Spaulding, the assistant
chief of port operations at MSO Honolulu, the idea came up to pull the
last two vessels off the reef intact, tow them to the dump site, and
sink them, Sifling said.
The vessels Yu Ti No. 1 and Amiga No. 5 had suffered significantly less
damage than the other seven longliners because of the way they'd gone
up on the reef. The idea was that refloating the vessels intact would
save a significant amount of money and cause less damage to the reef.
"Two engineers from the Marine Safety Center in Washington, D.C.
came down and ran some calculations to see if it was feasible,"
Sifling said. "They said the two vessels would float and estimated
it would take 150 tons of pulling pressure to get them off the reef."
The American Salvor, a 195-foot, deep-draft salvage vessel homeported
in Seattle and owned by Crowley Marine Services, was contracted for
the complex job.
On March 15, 2000, after months of preparation, the Salvor took a position
300 yards from the rusty, 300-ton Amiga No. 5. A pair of 2-inch steel
cables connected the two vessels. The cables extended from a hole cut
in the Amiga's stern to the Salvor's two, 150,000-pound stern winches.
Four steel anchor cables speared out from the bow of the Salvor to hold
the ship in place when the monstrous winches began pulling the Amiga.
The pull would be the culmination of weeks of dirty, dangerous and difficult
work to prepare the Amiga for floating and then sinking. It took a four-man
crew and a helicopter a full week to strip the longliner of 30 tons
of loose metals and other materials. Eight hundred gallons of diesel
oil and an assortment of other deadly chemicals were removed. Next,
the Amiga was cut, welded and reinforced to survive the forces the Salvor's
pulling would exert upon the Amiga's rusty frame.
Besides heat exhaustion and dehydration, the salvage crew also faced
dark, unfamiliar compartments with rusted-out floors, jagged, rusty
bulkheads, broken glass, tangled lines, hidden fuel tanks and high-pressure
With both vessels prepared for their 150-ton tug of war, supervisors
from each agency present, and crews manning their stations on both vessels,
the winches were engaged. The two winches slowly increased their pull
on the steel cables so that the maximum strain on the cables would be
reached just as high tide hit Pago Pago Harbor.
Aboard the Amiga, a small salvage crew nervously awaited signs of movement.
They would be needed to adjust the Amiga's ballast once it was refloated.
Finally, with the winches pulling a combined 154 tons of pressure and
the tide almost at its full height, the Amiga began to move. The Salvor
was winning, slowly at first, and then the Amiga slipped down the remaining
30 yards of reef with surprising speed and began floating.
After adjusting the ballast in the Amiga, the longliner was hooked up
to a tugboat and towed 12 miles out to sea. There, in 10,000 feet of
water, the salvage crews opened up the soft-seal plugs and, 15 minutes
later, the Amiga disappeared into the sea.
The whole operation was repeated with the Yu Ti No. 1, and on March
19, the last victim of Hurricane Val slipped into the Pacific Ocean.
"Refloating and sinking the last two vessels worked out to be quicker
and much cheaper than building trestles," Sifling said. "It
also caused much less environmental damage because both vessels came
out of the same scar, which the Yu Ti created when it first ran aground.
"None of this was possible with the other seven boats," Sifling
said. "They were stacked up against each other way too far on shore."
After sinking the last two vessels, all that remained of the longliners
were five hulls below the waterline and assorted debris scattered around
the reef. Under NOAA supervision, a crane barge was used to remove the
remaining hulls last June. The remaining debris in the outer harbor
was cleaned up by early January of this year, and the final clean-up
of the inner harbor should be completed by the end of March this year.
In total 1,900 gross tons of metal, 36,000 gallons of diesel and oil,
600 lbs. of poisonous anhydrous ammonia, and 10 pounds of freon were
removed from the nine longliner fishing vessels and disposed of at a
cost of over $12 million.
"The American Samoa Longliner Response pointed to a need for local
governments in more remote Pacific Island nations to develop plans to
respond immediately to hurricanes and other environmental disasters,"
said Lt. Cmdr. Lane Johnson, the assistant marine environmental response
officer at the Coast Guard's Fourteenth District Marine Safety Division.
"MSO Honolulu, MSO Guam and our office offer assistance to meet
those demands through the multi-national South Pacific Region Environ-mental
Program and the Oceanic Regional Response Team, which encourages local
governments and port authorities to not only prepare for emergencies,
but to prevent them."
Eric Hedaa is a public affairs specialist with the 14th Coast Guard
New Drydock is State's Largest
Pacific Shipyards International LLC has brought to Honolulu what is
now the largest commercial drydock in the state. With a lifting capacity
of 10,000 tons, overall length of nearly 400 feet, and clear width between
wing walls of 105 feet, the new dock will be capable of handling all
locally based vessels except the ocean liners ms Patriot and SS Independence.
Pacific Shipyards International (PSI), a limited liability corporation
formed in April, 2000, will own and operate the drydock. PSI member
companies include three local maritime interests: Honolulu Shipyard
Inc., Honolulu Marine and HSI Electric. Primary responsibility for marketing
the drydock will be Honolulu Shipyard and Honolulu Marine.
After acquiring the dock from a Japanese shipyard, PSI conducted a complete
refurbishment and extensive upgrade to the dock before towing it to
Hawaii in January. The dock is equipped with its own large power generation
equipment, three large cranes, and modern control and safety equipment.
Says PSI spokesman John Ball: "The dock is essentially in new condition
and should perform for decades before any major upkeep is required."
The company is currently completing final assembly of the dock at Pier
41, with a planned commissioning date in mid-February. The dock will
provide local ship and barge operators the opportunity to drydock their
vessels in Hawaii instead of sending them to the mainland. This will
reduce the time vessels are out of service and producing no revenue.
"It's a service the Hawaii maritime industry has wanted and needed
for a long time," says Ball. "It can save local vessel operators
a lot of time and money. It will also help Hawaii's economy by keeping
work in the state. It's a win-win for everyone."
PSI plans to eventually hire 20 to 30 employees, not including employees
from its three partner companies.
Pacific Shipyards names CEO
William Clifford was named CEO of Pacific Shipyards International,
effective March 1, 2001.
Prior to joining PSI, Clifford was vice president of new construction
at Atlantic Marine, a major shipbuilder/ship repair company in Jacksonville,
Fla. From 1996-1998 he was the director of new ship construction at
Bath Iron Works, where he was responsible for building and delivering
the new Arleigh Burke class destroyers.
Clifford also spent seven years with Pacific Marine in various capacities
from 1989 to 1996, including president of Honolulu Shipyard.
Sustaining the vitality of ocean tourism
by James E. Coon
I would like to take this opportunity to offer some thoughts both about
the future of the state's small boating program and how it impacts ocean
tourism and the need to look at sustainable growth and structure of
the entire maritime industry. This seems to be particularly relevant
in light of proposed legislation that offers a variety of different
bills that try to address the economic and functional challenges we
now see facing the Division of Boating and Ocean Recreation (DOBOR)
and the maritime industry.
There have been several organizations, both public and private, over
the past decade that have studied ways (quoting a working group mission
statement) "to more efficiently and cost effectively consolidate,
plan, finance, develop, market and manage statewide maritime lands,
facilities and functions to maximize the benefit to commercial and recreational
maritime users in the public interest while sustaining and improving
the natural and public trust resources of Hawaii's harbors, waterfront
and near ocean waters."
These studies offer very insightful suggestions on what is currently
dysfunctional and what should be done to make it better: Lack of strategic
planning, outdated management regimes for ocean and coastal management,
inadequate management capabilities and lack of administrative efficiency,
inadequate administrative flexibility for resource managers, a $140
million deferred maintenance shortfall, to name a few. Most of this
valuable advice has yet to be implemented.
We have some very substantial economic challenges ahead of us. The private
business sector has been forced to change or modify the way it does
business this past decade. The pace of change will continue to increase
as we integrate into the global economy. For the private sector this
has meant adopting policies that cut waste and increase productivity.
Government must do the same. Albert Einstein observed, "The significant
problems we face cannot be solved at the same level of thinking we were
at when we created them."
Senator Cal Kawamoto has introduced six very worthy maritime bills,
SB 752-757, which if all passed, would provide a comprehensive long-term
solution to our maritime infrastructure and management needs. Representative
Joe Souki has also introduced some companion legislation (HB 138) and
has a long history of supporting our industry. SB 757 and HB 138 would
return the small boat harbors out of DLNR and back to DOT where the
program was originally housed. SB 753 and HB 137 create the Hawaii Port
Serious consideration should be given to combining all designated state
harbor management efforts into one department (or port authority) that
has the long-term mandate and technical support--as well as the financial
strength--to sustain and develop harbor support programs. There could
be substantial cost savings to the state with this increased efficiency,
especially if duplicate management functions, personnel, and associated
infrastructure costs were eliminated.
Long-term planning for harbor infrastructure needs, alternative funding
mechanisms, (SB 755, SB 752, SB 754, SB 756, SB 550), as well as a long-term
management strategy must be implemented. For the recreational small
boat harbors with little or no commercial activity, privatization, community-based
management, or inclusion in the state park system with some general
funds support, should be considered (SB 663, SB 664, SB 689, SB 801).
The ocean tourism industry has organized on a statewide level as the
Ocean Tourism Coalition. (www.oceantourismcoalition.org). This is an
industry in which sustainable growth should be encouraged and nurtured.
A more accessible and business-friendly environment is hoped for by
a majority of the ocean tourism industry.
A dynamic industry The industry is highly segmented and dynamic. The
kinds of marine activities generating expenditures include tour boats
and inter-island cruise ships, submarines, dive shops, ocean activity
product manufacture and sales, charter boat fishing, recreational fishing,
personal boating, major yacht races, wind, board, and body surfing events,
jet skiing, parasailing and ocean kayaking. Total direct revenues were
$560 million and total employment was about 5,850 in 1992. This had
grown to an estimated $797 million in 1998 with total employment at
The OCEAN TOURISM INDUSTRY is one of the fastest growing economy. Overall,
Hawaii's maritime industries generated an estimated $3.8 billion in
1998 and employed 20,000. By comparison, revenues for all agricultural
production (farm-gate values) over this same period have varied little,
ranging between about $500-600 million annually.
If this trend continues, which appears likely, ocean recreation and
marine tourism revenues will continue to exceed agricultural production
revenues in the future. This likelihood reflects a major restructuring
of Hawaii's economy away from traditional mainstays such as agriculture
to more service-oriented industries, especially related to tourism.
Hawaii's ocean tourism industry is a "clean non-consumptive"
industry and is world famous for its conservation efforts and high quality
ocean experience. It understands that a pristine environment is good
Ocean tourism is not only an important player in the overall tourist
industry, but serves a vital role in attracting new visitors. It contributes
very significantly to the high level of visitor satisfaction resulting
in the large percentage of repeat visitors to our state.
Most ocean tourism businesses are small, capital and labor intensive,
locally owned and operated. They depend almost entirely on other small
business to support and supply virtually every aspect of their particular
enterprise. They are also very vulnerable to government regulation and
As form follows function, the ocean tourism industry (small passenger
vessels) would be better administrated by DOT-Harbors, or a port authority,
with the rest of ocean commerce (large passenger vessels) and not be
included with the recreational boating program. The current permit structure
that relates to ocean access is multi-jurisdictional. The associated
complexity makes it difficult for the commercial operators, who are
required to obtain these permits, to comprehend and comply. This situation
has resulted in confusion in the marketplace and has caused the public,
the commercial ocean tourism business, and the regulatory agencies considerable
The vitality of the ocean tourism industry depends on a state government
that is responsive and sensitive to the needs of commercial boaters.
What the state lacks in adequate rules and legislation must be made
up with sensible leadership and a partnership with the ocean tourism
There are small boat harbors in which a majority of the activity and
revenues generated are coming from the commercial sector. These harbors
function more like commercial harbors than recreational. The lines of
distinction will continue to blur as the large cruise ship industry
and inter-island ferries utilize these harbors and as the ocean tourism
small passenger vessels are built to meet this increasing demand.
Search for sustainable growth
This comment is not intended to promote an increase in the number of
commercial permits, which has already been fixed at a specific number
for each harbor, but is an attempt to look at sustainable growth and
recognize that some harbors are more commercial than recreational. The
public might be better served to have these harbors re-classified as
commercial harbors. This would allow the state to take advantage of
more favorable bonds and lending sources for harbor facilities improvement,
while simultaneously protecting the interests and improving the infrastructure
needs of the recreational boater that may be berthed there.
In any event, commercial boating should be treated the same statewide
regardless of which harbor the activity is generated from. The department
regulating the harbors should be given much more flexibility in generating
revenue from the lands surrounding the harbors while insuring that state
lands near harbors are available to meet our vital shipping needs. Slip
fees and boat ramp fees should be raised to levels equivalent to their
West Coast counterparts. However, this increase should not single out
specific harbors; the same percentage increase should apply for all
It is time to look at the ocean tourism industry separately from the
recreational boating program. It is not fair or feasible for the ocean
tourism industry, operating out of the small boat harbors, to subsidize
the state's recreational boating program.
Finally, it is time for the maritime industry to put aside its parochial
bias and come together to support these changes. It is also time for
the leadership of our great state to reject the dysfunctional status
quo and make the proactive and innovative decisions necessary to serve
the sustainable growth needs of our maritime industry into the foreseeable
James E. Coon is CEO of Coon Brothers Inc., which operates Trilogy Excursions,
Maui's oldest sailboat company. He is also active in a variety of marine
conservation efforts and serves on the Small Business Regulatory Review
Hawaii Ocean Industry provides this space as a forum to express veiwpoints
in Hawaii's ocean industry.