The best government rests on the people and not on the few, on persons and not on property, on the free development of public opinion and not on authority. - George Bancroft

1. THE HAWAII PUBLIC UTILITIES COMMISSION (PUC)
NAVIGATING HAWAII'S TERRITORIAL WATERS
WATER TRANSPORTATION - INTRA-STATE & INTRA-ISLAND TRANSSHIPMENT
SELECTIVE ENFORCEMENT AND EXERCISE OF REGULATORY AUTHORITY
FREE MARKET AND GOVERNMENT REGULATION
SALVAGING AND RESTORING PUBLIC TRUST AND CONFIDENCE
It's a fairy tale to believe the public utilities commissions's processes are fair and equitable. -
Thomas D. Elias
____________________
Selective enforcement violates the legitimate expectations of the public, who generally
understand the law, its content and application by viewing the administrative behavior and not
by reading the statutes themselves. Moreover, selectivity in law enforcement severely
contradicts the fundamental principle of equality before the law in its basic meaning, since
similar cases are not dealt with comparably. If a number of citizens violate the law with no
interference by those in charge of its enforcement, it is not just to treat another citizen
differently – at least when the breach of the law has no materially different attributes.
Beyond the injustice, deep resentment and danger to the legal system, which are the potential
results of any severe infringement upon equality, there can be economic implications of
selective enforcement, such as damaging or inhibiting free competition and causing damage to
the reputation and income of those against whom the law is enforced. Furthermore, the results
of selective enforcement are destructive not only to individuals but to society as a whole, since
it jeopardizes the rule of law, obedience to the law and public faith in the legal system.
“Public Law as a Whole: The Case of Selective Enforcement and Racial Profiling”
By Michal Tamir, Professor of Law at The Academic Center of Law and Science, Hod Ha
Sharon, Israel; Adjunct Professor at the Bar Ilan University Faculty of Law, Ramat-Gan,
Israel <https://www.law.nyu.edu/sites/default/files/upload_documents/tamirarticle.pdf>
_____________________
The U.S. economy is essentially a free market economy – an economic market that is run by
supply and demand – with some government regulation. In a truly free market, buyers and
sellers conduct their business without any government regulation, but there is a continuing
debate among politicians and economists about how much government regulation is necessary
for the U.S. economy.
Those who want less regulation argue that if you remove government restrictions, the free
market will force businesses to protect consumers, provide superior products or services, and
create affordable prices for everyone. They believe that the government is inefficient and creates
nothing but a big bureaucracy that increases the cost of doing business for everyone.
Those who argue that government regulations are necessary to protect consumers, the
environment and the general public claim that corporations are not looking out for the public's
interest and that it is precisely for this reason that regulations are required.

2. Free market economics aren't perfect, but neither are completely regulated economies.
The key is to strike a balance between free markets and the amount of government
regulation needed to protect people and the environment. When this balance is reached,
the public interest is protected and private business flourishes. [Emphasis Supplied]
“The Cost of Free Markets” By Chris Seabury, Investopedia, February 8, 2020
<https://www.investopedia.com/articles/economics/08/free-market-regulation.asp>
________________________________________________
The State of Hawaii Public Utilities Commission (PUC) has jurisdiction over movements
in interisland, intrastate, intra-island commerce not within the jurisdiction of the Federal
Maritime Commission (FMC) and the Surface Transportation Board (STB)
SURFACE TRANSPORTATION BOARD (STB)
CHAPTER 135 JURISDICTION - SUBCHAPTER II WATER CARRIER TRANSPORTATION
SECTION 13521 GENERAL JURISDICTION.
(a) General Rules.—The Secretary and the Board have jurisdiction over transportation insofar
as water carriers are concerned -
(1) by water carrier between a place in a State and a place in another State, even if part
of the transportation is outside the United States;
(2) by water carrier and motor carrier from a place in a State to a place in another State;
except that if part of the transportation is outside the United States, the Secretary only
has jurisdiction over that part of the transportation provided -
(A) by motor carrier that is in the United States; and
(B) by water carrier that is from a place in the United States to another place in
the United States; and
(3) by water carrier or by water carrier and motor carrier between a place in the United
States and a place outside the United States, to the extent that -
(A) when the transportation is by motor carrier, the transportation is provided in
the United States;
(B) when the transportation is by water carrier to a place outside the United
States, the transportation is provided by water carrier from a place in the United
States to another place in the United States before transshipment from a place in
the United States to a place outside the United States; and
(C) when the transportation is by water carrier from a place outside the United
States, the transportation is provided by water carrier from a place in the United
States to another place in the United States after transshipment to a place in the
United States from a place outside the United States.

3. (b) Definitions.—In this section, the terms “State” and “United States” include the territories
and possessions of the United States.
(Added Pub. L. 104–88, title I, §103, Dec. 29, 1995, 109 Stat. 865.)
Source: United States Code, 2011 Edition, Title 49 – TRANSPORTATION
<https://www.govinfo.gov/content/pkg/USCODE-2011-title49/html/USCODE-2011-
title49.htm>
FEDERAL MARITIME COMMISSION (FMC)
The Commission regulates common carriers by water and other persons involved in the
oceanborne foreign commerce of the United States under provisions of the Shipping Act of
1984 (46 U.S.C. 40101-41309); section 19 of the Merchant Marine Act, 1920 (46 U.S.C.
42101-42109); the Foreign Shipping Practices Act of 1988 (46 U.S.C. 42301-42307); sections 2
and 3, Public Law 89-777, Financial Responsibility for Death or Injury to Passengers and for
Non-Performance of Voyages (46 U.S.C. 44101-44106); and other applicable statutes.
Source: United States Code Title 46 SHIPPING Chapter IV Subchapter A Part 501 Section
501.2 <https://www.ecfr.gov/cgi-bin/retrieveECFR?
gp=&SID=cdfcfffc743345e0b06a4978ea191874&mc=true&n=pt46.9.501&r=PART&ty=HTML>
____________________
FMC Bureau of Trade Analysis, Office of Service Contracts and Tariffs, May 21, 2014
The Matson tariff which applies for waterborne cargo moving from the U.S. to/from foreign is
Matson-088. The tariff location is www.matson.com.
Matson's Tariff 088 has been referred to the Office of General Counsel. Matson publishes Tariff
088, which covers its compensated service for ocean transportation between the United States
and China.
The Federal Maritime Commission has jurisdiction over international oceanborne shipping and
regulates Matson regarding this service.
The other service you describe involves intrastate or interstate commerce over the high seas in
the U.S. domestic trade.
The State of Hawaii has jurisdiction over movements in intrastate commerce. For example, the
State of Hawaii has jurisdiction over the services in Tariff 60-A which is a domestic commodity
tariff for interisland freight published by Matson.
The Surface Transportation Board created in the ICC Termination Act of 1995 and the
successor agency to the Interstate Commerce Commission has authority over continuous
movements in interstate commerce.
The State of Hawaii has jurisdiction over the services in Tariff 60-A which is a domestic
commodity tariff for interisland freight published by Matson.

4. Surface Transportation Board, Deputy Director - Public Assistance and Compliance,
DOT/Surface Transportation Board (STB), Office of Public Assistance, Governmental
Affairs, and Compliance (OPAGAC). Supervising - Household Moving Tariffs, Non-
contiguous US Domestic Marine Tariffs, Railroad Agricultural Contract Summaries, and
the Rail Customer and Public Assistance Program, January 17, 2014
STB would only have tariff authority over carriers involved in US noncontiguous domestic
marine traffic. For example, STB would have authority over carriers operating between Hawaii
and the US 48 states; but would not have authority over Hawaiian inter-island carriers, traffic
between the noncontiguous states or territories themselves (ex: Alaska to Hawaii, or Guam to
Hawaii), or international traffic (ex: Canada to Hawaii)
[Original Documents submitted to PUC under separate cover]
____________________
INTERISLAND, INTRASTATE, INTRA-ISLAND SHIPMENTS
The Hawaii Public Utilities Commission (PUC) may regulate those interisland, intrastate, intra-island
shipments not within the jurisdiction of the Federal Maritime Commission (FMC) and the Surface
Transportation Board (STB). The State of Hawaii has jurisdiction over movements in interisland,
intrastate, intra-island commerce.
“Inter-island cargo” or “intra-island cargo” means passengers or cargoes handled between
wharves of the islands of Niihau, Kauai, Oahu, Molokai, Lanai, Maui, Kahoolawe, and
Hawaii. It does not include passengers or cargoes in transit from an overseas port traveling
between these islands without intermediate off-loading to a wharf of one of these islands. It
does include passengers or cargoes from an overseas port which were off-loaded at a
wharf on one of these islands and is being transshipped to another wharf on one of these
islands. [Emphasis Supplied]
“Transshipment cargo” means cargo arriving and unloaded at a wharf in this State for further
shipment to its ultimate destination on, and by terms of, a through bill of lading.
Transshipment cargo is of the following types:
(1) Overseas: from the United States to another country through Hawaii, or from one
country to the United States or another country through Hawaii;
(2) Domestic: from the United States to one island port via another island port or to the
United States from one island port via another island port; or
(3) Inter-island: from one island port to another via one of the islands.
Source: Hawaii Administrative Rules Title 19 Chapter 41 Subtitle 3 Division Part 1
Commercial Harbors And Tariff §19-41<https://hidot.hawaii.gov/harbors/files/2013/01/19-
41-2.pdf>
See also: 46 Code of Federal Regulations (CFR) § 520.2
<https://www.law.cornell.edu/cfr/text/46/520.2>

5. HAWAII PUBLIC UTILITIES COMMISSION JURISDICTION
INTRASTATE WATERS – TERRITORIAL WATERS
The State of Hawaii shall consist of all the islands, together with their appurtenant reefs and
territorial and archipelagic waters, included in the Territory of Hawaii on the date of enactment
of the Admission Act, except the atoll known as Palmyra Island, together with its appurtenant
reefs and territorial waters; but this State shall not be deemed to include the Midway Islands,
Johnston Island, Sand Island (offshore from Johnston Island) or Kingman Reef, together with
their appurtenant reefs and territorial waters. [Am 73 Stat 4 and election June 27, 1959; ren and
am Const Con 1978 and election Nov 7, 1978] (Case Notes: Territorial waters extend only three
miles from each island. 352 F.2d 735, aff. 235 F. Supp. 990.)
Source: Hawaii State Constitution Article XV Section 1 <https://lrb.hawaii.gov/constitution#articlexv>
____________________
TERRITORIAL SEA
Each coastal State may claim a territorial sea that extends seaward up to 12 nautical miles (nm)
from its baselines. The coastal State exercises sovereignty over its territorial sea, the airspace
above it, and the seabed and subsoil beneath it. Foreign flag ships enjoy the right of innocent
passage while transiting the territorial sea subject to laws and regulations adopted by the coastal
State that are in conformity with the Law of the Sea Convention and other rules of international
law relating to such passage. The U.S. claimed a 12 nm territorial sea in 1988 (Presidential
Proclamation No. 5928, December 27, 1988). [Emphasis Supplied]
BASELINE
Generally speaking, the normal baseline is the low-water line along the coast as marked on
large-scale charts officially recognized by the coastal State. Special rules for determining the
baseline apply in a variety of circumstances, such as with bays, ports, mouths of rivers, deeply
indented coastlines, fringing reefs, and roadsteads.
Consistent with these rules, the U.S. baselines are the mean of the lower low tides as depicted
on the largest scale NOAA nautical charts. The U.S. normal baselines are ambulatory and
subject to changes as the coastline accretes and erodes.
Source: NOAA Office of General Counsel, last updated March 1, 2019
<https://www.gc.noaa.gov/gcil_maritime.html>
____________________
TERRITORIAL SEA - U.S.-AFFILIATED PACIFIC ISLANDS - PacIOOS
These boundaries represent the territorial sea for U.S.-affiliated Pacific Islands, including
Hawaii, American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI),
Guam, as well as the U.S. Minor Outlying Islands of Baker Island, Howland Island, Jarvis
Island, Johnston Atoll, Kingman Reef, Midway Atoll, Palmyra Atoll, and Wake Island.

6. Territorial waters, or a territorial sea, as defined by the 1982 United Nations Convention on
the Law of the Sea, is a belt of coastal waters extending at most twelve nautical miles (12 nmi)
from the baseline (usually the mean low-water mark) of a coastal state. The territorial sea is
regarded as the sovereign territory of the state, although foreign ships are allowed innocent
passage through it; this sovereignty also extends to the airspace over and seabed below.
<https://www.pacioos.hawaii.edu/metadata/pac_ocs_usa_territorial_sea.html>
Pacific Islands Ocean Observing System
(PacIOhttp://www.pacioos.hawaii.edu/metadata/browse/pac_ocs_usa_territorial_sea.pngOS) <>
Based within the School of Ocean and Earth Science and Technology (SOEST) at the
University of Hawaii at Mānoa (UH), PacIOOS is one of 11 regional associations within
the U.S. Integrated Ocean Observing System (IOOS®
)
<https://www.pacioos.hawaii.edu/about/>
___________
MARITIME BOUNDARIES GEODATABASE: TERRITORIAL SEAS (12NM)
HAWAII
PlaceType Territorial Sea
Latitude 22° 17' 48.5" N (22.2968°)
Longitude 161° 19' 49.3" W (-161.33035°)
Min. Lat 18° 42' 32.3" N (18.709°)
Min. Long 178° 31' 49.8" W (-178.5305°)
Max. Lat 28° 36' 8.3" N (28.6023°)
Max. Long 154° 35' 38.7" W (-154.5941°)
Source: Marine Regions, Flanders Marine Institute, Last edited on 2019-11-20
<https://www.marineregions.org/gazetteer.php?p=details&id=49168>
Matson's Dedicated Neighbor Island Fleet
“Matson's frequent, reliable schedules extend to each of the major ports of Hawaii’s
Neighbor Islands: Kahului, Maui; Nawiliwili, Kauai; and Hilo and Kawaihae on the Big
Island of Hawaii. Service is also available to the islands of Molokai and Lanai”.
Matson <https://www.matson.com/matnav/services/hawaii.html>
__________
Matson Increases Neighbor Island Barge Capacity
Matson, Inc. said its subsidiary Matson Navigation Company, Inc. has replaced one of
its three barges dedicated to serving Hawaii's neighbor island ports with a newer, larger
barge that will improve service levels.

7. The container barge Columbia, to be renamed Mauna Loa in honor of the barge it
replaces, is now Matson's largest barge. At 360 feet long, with a beam (width) of 100
feet and cargo carrying capacity of 12,600 tons or 500 TEU, it is 12 feet longer and 40
feet wider than the barge it replaces, with the capacity to carry 180 more TEU or nearly
8,000 tons more cargo.
Built in 2012 by Gunderson Marine and classified as a Deck Cargo Barge with
approximately 33,000 square feet of deck cargo space, the vessel's design enables swifter
and more fuel efficient transits. Its deck is unobstructed to allow greater flexibility in
loading containers and over-dimensional cargo and is protected by a large breakwater at
the bow and bin walls on the sides to aid in cargo securing and protection from the
marine environment.
Matson said the barge upgrade comes at a time of heavy investment in its Hawaii
service. The company recently announced the purchase of three new gantry cranes and
the upgrade of three existing cranes as part of a $60 million project to expand and
improve its Sand Island terminal in Honolulu Harbor in preparation for the arrival of the
first of four new, larger containerships starting next year. Matson has two Aloha Class
ships under construction at Philly Shipyard in Philadelphia with deliveries scheduled for
the third quarter of 2018 and first quarter of 2019, respectively. The 850-foot long,
3,600 TEU vessels will be Matson's largest ships and the largest containerships ever
built in the U.S. They will also be faster than any of Matson's current vessels, designed
to operate at speeds in excess of 23 knots, helping ensure timely delivery of goods in
Hawaii.
Matson has also ordered two Kanaloa Class vessels from General Dynamics NASSCO
in San Diego with deliveries scheduled for the fourth quarter of 2019 and second quarter
of 2020 respectively. These ships will be combination container and roll-on/roll-off
(Con-Ro) vessels built on a 3,500 TEU vessel platform 870 feet long and 114 feet wide,
with enclosed garage space for up to 800 vehicles. With delivery of the Kanaloa Class
ships, along with its two new Aloha Class ships, Matson will have completed the
renewal of its Hawaii fleet.
Matson's latest investments in terminal improvements are a cornerstone of the State of
Hawaii's Harbor Modernization Plan, which includes the reinforcement of berths in
Honolulu Harbor to support the expansion of Matson's Sand Island Terminal.
“These investments in our Hawaii infrastructure underscore Matson's long-standing
commitment to serving our communities with the most reliable, efficient and
environmentally friendly operations in the islands for the long-term,” said Matt Cox,
chairman and chief executive officer.
“Matson Increases Neighbor Island Barge Capacity”
By Eric Haun, Maritime Logistics Professional, January 3, 2018
<https://www.maritimeprofessional.com/news/matson-increases-neighbor-island-barge-312543>

8. KAIMANA HILA is a Hawaiian transliteration for “Diamond Head,” the name of Hawaii's
iconic landmark crater near Waikiki Beach.
The new vessel is the sister ship to the DANIEL K. INOUYE, which was christened in June
2018 and went into service in November 2018.
The two vessels, at 850 feet long and 50,794 DWT, are the largest containerships ever built in a
U.S. shipyard. Though bigger, THE SHIPS ARE ALSO DESIGNED TO
ACCOMMODATE FUTURE NEEDS BY BEING ABLE TO NAVIGATE SAFELY
INTO SOME OF HAWAII'S SMALLER PORTS. [Emphasis Supplied]
“Matson Takes Delivery of Kaimana Hila” Seafarers International Union, May 1, 2019
<https://www.seafarers.org/seafarerslogs/2019/05/matson-takes-delivery-of-kaimana-hila/>
MATSON VESSELS
<https://investor.matson.com/sec-filings/sec-filing/10-k/0001558370-20-001757
Name of Vessels TEUs Length Speed Knots DWT
DANIEL K. INOUYE 3,220 854' 0” 23.5 50,794
KAIMANA HILA 3,220 854' 0” 23.5 53,747
LURLINE 2,750 869' 5” 23.0 50,562
Vessel under Construction
MATSONIA 2,750 869' 5” 23.0 50,562
__________________________________________
Regulation is one of the three key levers of formal state power (together with taxing and spending). Of
critical importance in shaping the welfare of economies and society, it may also be considered as the
ultimate horizontal policy; when carried out effectively, regulatory policy complements the formulation
and implementation of all other policies. The objective of regulatory policy is to ensure that the
regulatory lever works effectively, so that regulations and regulatory frameworks are in the public
interest. Open government enables public scrutiny, gathering facts from those affected by proposals,
safeguards against corruption, and promotes citizens' trust in government, through increased
transparency and public participation. It facilitates the goal of non-discrimination, by supporting equal
access and treatment for all citizens under the law. [R]egulatory transparency reduces possibilities for
abuse of discretion and for corrupt behaviour from public officials.
OECD Council on Regulatory Policy and Governance <https://www.oecd.org/governance/regulatory-policy/49990817.pdf>