Tuesday, June 25, 2013

Regulatory Creep

The NRC's assessment of safety culture (SC) is an example of regulatory creep.  It began with the requirement that licensees determine whether specific safety-related performance problems or cross-cutting issues were caused, in whole or in part, by SC deficiencies.  Then the 2011 SC Policy Statement attempted to put a benign face on NRC intrusiveness because a policy statement is not a regulation.  However, licensees are “expected” to comply with the policy statement's goals and guidance; the NRC “expectations” become de facto regulations.

We have griped about this many times.*  But why does regulatory creep occur?  Is it inevitable?  We'll start with some background then look at some causes.

In the U.S., Congress passes and the President approves major legislative acts.  These are top-level policy statements characterized by lofty goals and guiding principles.  Establishing the detailed rules (which have the force of law) for implementing these policies falls to government bureaucrats in regulatory agencies.  There are upwards of 50 such agencies in the federal government, some part of executive branch departments (headed by a Cabinet level officer), others functioning independently, i.e., reporting to Congress with the President appointing, subject to Congressional approval, their governing boards (commissioners).  The NRC is one of the independent federal regulatory agencies.

Regulatory rules are proposed and approved following a specified, public process.  But once they are in place, multiple forces can lead to the promulgation of new rules or an expanded interpretation or application of existing rules (creep).  The forces for change can arise internal or external to the agency.  Internal forces include the perceived need to address new real or imagined issues, a fear of losing control as the regulated entities adapt and evolve, or a generalized drive to expand regulatory authority.  Even bureaucrats can have a need for more power or a larger budget.

External sources include interest groups (and their lobbyists), members of Congress who serve on oversight committees, highly motivated members of the public or the agency's own commissioners.  We classify commissioners as external because they are not really part of an agency; they are political appointees of the President, who has a policy agenda.  In addition, a commissioner may owe a debt or allegiance to a Congressional sponsor who promoted the commissioner's appointment.

Given all the internal and external forces, it appears that new rules and  regulatory creep are inevitable absent the complete capture of the agency by its nominally regulated entities.  Creep means a shifting boundary of what is required, what is allowed, what is tolerated and what will be punished—without a formal rule making.  The impact of creep on the regulated entities is clear: increased uncertainty and cost.  They may not care for increased regulatory intrusiveness but they know the penalty may be high if they fail to comply.  When regulated entities perceive creep, they must make a business decision: comply or fight.  They often choose to comply simply because if they fight and lose, they risk even more punitive formal regulation and higher costs.  If they fight and win, they risk alienating career bureaucrats who will then wait for an opportunity to exact retribution.  A classic lose-lose situation.  

Our perspective

Years ago I took a poli-sci seminar where the professor said public policy forces could be boiled down to: Who's mad?  How mad?  And who's glad?  How glad?  I sometimes refer to that simple mental model when I watch the ongoing Kabuki between the regulator, its regulated entities and many, many political actors.  Regulatory creep is one of the outcomes of such dynamics.

*  For related posts, click the "Regulation of Safety Culture" label.

Regulatory creep is not confined to the NRC.  The motivation for this post was an item forwarded by a reader on reported Consumer Product Safety Commission (CPSC) activity.  Commenting on a recent settlement, a CPSC Commissioner “expressed concern that . . . the CPSC had insisted on a comprehensive compliance program absent evidence of widespread noncompliance and that “the compliance program language in [the] settlement is another step toward just such a de facto rule.””  C.G. Thompson, “Mandated Compliance Programs as the New Normal?” American Conference Institute blog.  Retrieved June 6, 2013.

1 comment:

  1. Regulatory expansion of its own activity does not appear to be entirely universal. In the UK with its Duty of Care and Work-Centric Safety Case (i.e. performance-based) Health and Safety regulation framework it seems that implementation of a Trust but Verify oversight stratagem works.

    Certainly standards rise in the UK just as they do in the US and overall the price of adequate protection increases more or less inexorably - but not I suspect at the "increasing returns" pace we observe in the US.

    I'm unclear whether it is necessary to understand Why we seem committed to the Chronic Mistrust school of oversight. It might simply be better to explore what would it take to destabilize the existing system such that it "tunneled" to some thing more like what the Brits have.

    Legislation created NRC with its now fully evolved Duty of Prevention - it could undo it. It is unlikely to happen as a gross failure to deliver what the agency currently promises - it is after all one of the best places in the Federal Government to work.

    There has to be some other way to illustrate what is awry. A prize to the one who discovers what that is.


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