Monday, September 21, 2015

Notes on Regulatory Capture

NRC Public Meeting
A couple of recent local news items discuss a too-cozy relationship between regulators and the supposedly regulated, to the detriment of ratepayers and ordinary citizens.  Neither is nuclear-related but they may give us some ideas on how regulatory capture might (or does) manifest in the nuclear industry.

PG&E and the CPUC

First up is an article* about Pacific Gas and Electric Co. (PG&E) and the California Public Utilities Commission (CPUC).  PG&E is responsible for the deadly 2010 gas main explosion in San Bruno, CA.  It was later revealed that PG&E was involved in private, i.e., secret, lobbying to get the CPUC judge it wanted to handle the case.  An as investigation later concluded, such ex parte discussions gives the utilities an advantage over other participants in the regulatory process.

The article concentrates on remedial legislation working its way through the system.  One bill would close the loophole that allows secret meetings between the CPUC and a regulated entity under certain conditions.  Another would create an independent inspector general for the agency.

Berkeley Zoning Adjustment Board 

This editorial** focuses on a city zoning board that is stuffed with members whose background is in the development industry.  It quotes at length local resident James McFadden who has some excellent observations about the nature of regulatory capture in this situation.

“Although many people are quick to assume that capture means corruption, they really are different things.

“Capture is more of an aligning of economic world views, not necessarily to any monetary advantage, often just to make one's job easier or more pleasant in dealing with people on a day to day basis . . . .

“Captured individuals . . . don't see their behavior as incorrect.  They have forgotten that their role is to provide oversight and protection to the public . . . Their public meetings evolve into patronizing facades of democracy.

“. . . For the most part, capture is about creating a pleasant working environment with those in industry who they deal with on a daily basis.  It is a slow and insidious process that strikes at the heart of human psychology which allows us to work in groups. . . . When we-the-public show up and complain, we become the opponent to be ignored.

“. . . The [public] meeting becomes a dance of false empowerment where getting through the meeting on time is more important than focusing on important issues or input from the public.”

Our Perspective

Do you see any of the above behavior in the nuclear industry?  Here’s a clue to get you started: the mental model for all federally regulated or controlled activities, viz., the infamous “iron triangle” of special interests, Congress and federal bureaucrats.  In the nuclear space, utility lobbyists and industry organizations encourage/pressure Congress for favorable treatment in exchange for support at election time.  Congress leans on the NRC when job losses are threatened because of a lengthy plant shutdown or costly “over regulation.”  The NRC listens to or cooperates with industry “experts” when it is considering new policies, regulations or interpretations.  We believe the iron triangle is alive and well in the nuclear industry but is nowhere near as scurrilous as, say, the welfare system.

(Now the anti-nukes also lobby Congress and certain members of Congress are relentless critics of the NRC.  Do the scales balance?  And where does the clash of lobbying titans leave Joe Citizen?)

Expanding on one side of the triangle, nuclear utilities make efforts to build organizational, professional and personal relationships with the NRC because it’s in their direct economic interest to do so.  In the other direction, don’t NRC personnel try to get along with utility people they see on a regular basis?  Who wants to alienate everybody all the time?  The NRC tries to avoid being too cozy with the utilities but they can’t completely avoid it.  They are in the same business and speak the same language.  However, it’s far from scandalous, like the relationship between the former Minerals Management Service and the offshore drilling industry.  And there is no overactive revolving door between the NRC and industry.

What about outsiders who try to influence policy?  At the top, gadflies who address agency-wide issues or work with HQ personnel may eventually get a seat at the table.  But in the field, Jane Citizen making a statement at a meeting concerning the local plant probably doesn’t have as much leverage.  Consider how difficult it is for the average whistleblower to have an impact.

The Wikipedia entry on regulatory capture cites Princeton professor Frank von Hippel, Barack Obama, Joe Biden, Greenpeace, the Union of Concerned Scientists and the Associated Press to support the position that the NRC has been “captured.”  Has the NRC been too accommodating to the industry?  You be the judge.

There is an old saying: “Familiarity breeds contempt.”  That’s true in some cases.  In other situations, familiarity breeds—greater familiarity.

*  J. Van Derbeken, “CPUC reform bills on governor’s desk,” San Francisco Chronicle (Sept. 15, 2015).  Questionable conduct flowed both ways.  It also came to light that the then-President of the CPUC appeared to offer his support for PG&E’s (and other utilities’) positions on regulatory cases in return for their contributions to his favorite political causes.  That’s called influence peddling.

**  B. O'Malley, “Berkeley's Zoning Board Slouches Toward Birthing Its Monster,” Berkeley Daily Planet (Sept. 13, 2015).  The Daily Planet is an online progressive (lefty) newspaper in Berkeley, CA.

Thursday, September 10, 2015

DNFSB Hearing on Safety Culture Progress at the Waste Treatment and Immobilization Plant (WTP)

The WTP aka the Vit Plant
On August 26, 2015 the Defense Nuclear Facilities Safety Board (DNFSB) held a hearing in the Hanford area to receive testimony from senior DOE officials representing DOE Headquarters, the Office of River Protection (ORP) and the WTP project regarding the current status of DOE efforts to improve safety culture (SC) at the WTP.  A senior DNFSB staff member also testified on DOE’s SC improvement efforts.

There is a video of the meeting but no transcript is yet available.* 

The panel of DOE managers enumerated the work that has been undertaken to improve SC at the WTP.**  Based on their written submittals, it is predictable and not especially interesting material.  Selected excerpts follow:

G. Podonsky (DOE HQ) – “. . . positive turn in the safety culture.  However, much work remains . . . . As our assessments of safety culture indicate, management often has a more positive outlook on the state of the safety culture than do the workers.”

K. Smith (ORP Mgr) – This is mostly a laundry list of actions, initiatives and putative progress.  “. . . ORP’s safety culture today . . .  is improving and headed in the right direction. . . . But there are areas that still need work . . .”

W.F. Hamel Jr. (Federal Project Director WTP) – This focuses on more specific, project-level actions.  “We believe we have made significant strides. . . . sustaining a healthy safety culture requires persistence and consistency at all levels of the organization . . .”  He gave a shout out to Bechtel for progress in improving their SC and the Safety Conscious Work Environment (SCWE).

After the panel completed their presentation, the DNFSB staff member responsible for overseeing WTP (and other DOE) SC efforts had ten minutes to provide the staff perspective on DOE’s efforts.  He summarized the SC assessments that have taken place at the WTP and other facilities in the DOE complex.***  His testimony had more “howevers” than a Consumer Reports review of a mediocre automobile.  For example, DOE’s original plan was developed prior to the 2012 SC assessment and did not include the latter’s findings.  DOE modified their plan for Hanford but it was not applied to other DOE facilities.  The DOE themes did not address the root causes the DNFSB identified in their 2011 Recommendation.  He was also critical of the DOE’s extent of condition review.

He was asked one question by the meeting chair: “Is the bad (i.e., not supportive of SC) management behavior identified in 2011 still occurring?”  The answer was “It’s mixed. Some yes and some no.”  The chair was clearly not happy with that answer after four years of effort.

Our Perspective

The DOE bureaucrats identified a passel of SC-related improvement activities and claim progress is being made but there is still work to accomplish.  The testimony of the DNFSB staffer was less optimistic.  A statement contributed for the record by an anonymous “concerned engineer” includes examples that look like they came straight from the bad old days.****  We have reviewed most the DOE/WTP assessments, action plans and progress reviews on Safetymatters; click on the DOE or WTP label to see related posts.  Call us harsh, but we don’t believe there will be any substantive changes in the way business is conducted at Hanford until the bad stuff starts leaching into the Columbia River.

On a slightly brighter note, the DNFSB is back to full strength with five members, including a new chairman.  From looking at the press releases, it appears they have added folks with federal/military backgrounds and middling technical exposure.  The new chair is a career technical functionary whose last stint was at the White House.  It’s hard to get All-Stars for a toothless agency.  What they can contribute to oversight of DOE remains to be seen.  We wish them well.

*  The video is here.  Testimony and statements are available here but most are scanned copies which means quotes have to be retyped and may not totally accurate.  For an overview of the meeting see A. Cary, "National board hears safety culture is improving at Hanford vit plant," Tri-City Herald (Aug. 26, 2015).

**  Statement for the Record and Additional Information of G. Podonsky, Office of Enterprise Assessments (Aug. 26, 2015).  Testimony of K. Smith, Manager, Office of River Protection (Aug. 26, 2015).  Testimony of W.F. Hamel Jr., Federal Project Director, Waste Treatment and Immobilization Plant (Aug. 26, 2015).

***  Testimony of D.B. Bullen, Group Lead, Nuclear Programs and Analysis, DNFSB.  The question and answer are not verbatim but paraphrased from the exchange between Bullen and the chair that occurs from about 1:52 to 1:55 in the video.

****  Statement from concerned engineer (Aug. 26, 2015).