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The OceanGate Submersible & Our Murky Regulatory Underworld [1]
['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']
Date: 2023-06-20
You have probably seen the headlines by now: OceanGate, a company in the league of Blue Origin selling extreme tourism for the wealthy, has lost a submersible ocean craft filled with two billionaires, a 19-year-old kid, and two OceanGate employees.
You may have also seen the jokes: the craft was a shoddily-constructed metal and fiberglass tube steered by a $30 aftermarket X-Box controller, boasting no seats, a bucket toilet, and tickets that ran $250,000 a pop.
The intrepid “reporters” at Forbes point out that The Marine Technology Society already knew these crafts were dangerous and [horrified gasp here] unregulated! How could we, many on the internet are asking without defining the nebulous ‘we,’ allow a company to jettison billionaires to the bottom of the ocean in a metal coffin and not regulate that activity? To someone all-too familiar with our tangled regulatory landscape, these questions exemplify a widespread naivety about who is making sure our goods and services are safe and how well they’re doing it.
Spoiler alert: the news ain’t great. We have allowed our regulatory structures to become complex and privatized to the point of opacity, to the point that the people they are supposed to protect cannot reasonably be expected to understand them. Still, if you stick with me, I will try to explain.
Let’s start with what most people think they’re talking about when they talk about regulation: government regulatory approval. This means a government regulator has to give their OK before a product or service can go to market. Agencies rarely directly test products or services (the Nuclear Regulatory Commission comes to mind as an exception). More often, they review tests performed externally. The FDA doesn’t do their own testing on food; they scrutinize data provided to them by food manufacturers. This can extend to what is called “self-certification,” which is what got Boeing and the FAA in hot water when Max 737 jets started dropping out of the sky in 2019. I imagine this process involves the FAA sending paperwork to Boeing asking, “Are you in compliance?” and Boeing sending them back saying, “Yes!” with a little heart to dot the exclamation point.
(Oil rigs also self-certify — something to keep you up at night. You’re welcome.)
Things that are not government approved may still be government regulated. Cosmetics, for instance, don’t need approval before they go to market, but if they are found to violate regulations after the fact, the FDA is responsible for investigation and enforcement. No one is checking if there’s poison in your lotion before you buy it, but if you figure out that the lotion is what poisoned you, you can complain to the FDA. They can issue a recall, and you can use their evidence to sue the company for whatever horrible malady they’ve given you. For perspective on the efficacy of this process, Johnson & Johnson knew about asbestos in their baby powder as far back as the 1950s and lawsuits only started in the late 2000s.
However, our OceanGate deep sea death tube is neither government approved nor government regulated, nor is there any US government agency that OceanGate could have sought regulation from. No, they are in what we call a self-regulating industry. In self-regulating industries, various industry stakeholders define baselines or best practices for things like quality, ethics, and safety. These standards are overseen by independent nongovernmental authorities. This is what experts mean when they say OceanGate’s submersible did not “meet industry standards”: it was not approved by a third party regulatory agency in its industry.
A simple example is the American Medical Association (AMA), a not-for-profit professional organization which is authorized by state governments to issue and revoke medical licenses. It’s not a government entity, but it participates in lobbying on behalf of its members to support or discourage new regulations regarding the practice of medicine.
For products, standards are normally controlled by nonprofit accreditors such as the American National Standards Institute (ANSI), but they don’t directly test their standards. They accredit, through regular audits, third-party regulatory agencies like NSF, CSA, and UL. They’re the ones whose logos you’ll see on the backs of appliances and power strips, because they do the actual testing. There may or may not be laws requiring certification. Rather than a government agency dictating requirements for smoke detectors, laws instead point to existing regulations from the National Fire Protection Association and require their third-party certification.
I concede, there are benefits to this structure. Industry standards are consistently created by experts in the field who know what’s possible and meaningful, so you don’t end up requiring a product contain 0% of something - which is impossible to prove. (Take note, California legislators.)
But I promised bad news, and here it is: the regulatory agencies I named are legally non-profit or not-for-profit, but they need to keep the lights on and they charge big money for certification. They have sales teams. They have competitors. Their boards are made up of industry execs who don’t understand how to run an organization without a profit motive. It’s not that they’re being bribed but that they don’t have to be. If a company brings in 10% of their annual revenue in a certain sector, how effectively can an organization actually regulate them?
The advantage of a government regulator over an industry regulator is that when the FDA pulls 33,000 bottles of baby powder off the shelves, they don’t have to worry about Johnson & Johnson pulling up stakes and going to their competitor. The FAA didn’t go out of business over the Max 737 debacle. These third-party regulators, though? They’re terrified of those situations.
Now, look at the agency the Marine Technology Society recommended to certify OceanGate: DNV, formerly DNV-GL. They are by far the largest maritime classification organization in the world, but not the only one. They are, to my horror, a privately-owned for-profit corporation, and they wholly own the DNV classifications. That means other classification organizations have their own privately held standards, meaning not only could a manufacturer shop around for a friendly regulator but they could actually shop around for the standards that will treat them best. Their approval comes directly from multiple governmental administrations around the world, which means that, while they are able to control and write their own standards, they have no centralized oversight from an accreditation body.
OceanGate described their submersible as experimental, and participants signed a disclaimer acknowledging that it was not regulated or certified by any agency. Their website explained that it takes years to establish regulations for new technologies. They’re correct. New technologies often don’t fit into existing regulations and go unregulated not because they don’t want a certification but because no certification exists. If OceanGate wanted to be certified by DNV, they probably would have been asked to pay exorbitantly for standards development research, which is a huge, time-consuming, unprofitable pain that no regulator likes to deal with. It would have been years before they could go to market.
And, you know what? That’s probably what should have happened.
But this is the danger that lurks our regulatory mire: the existence of third-party industry regulators meant no government agency was directly involved in oversight — because the industry has it handled, right? And the profit motives of the regulatory agencies meant they weren’t interested in a startup that probably didn’t have enough money to fund the years of standards development it would take to get them through the door. Even if they had the money, OceanGate could have shopped around to dozens of agencies to find one that would write a standard their submersible could pass. And the incomprehensible, disorganized, decentralized nightmare that is our regulatory world meant that, even if OceanGate’s vessel was certified, it would have meant nothing to its passengers. They would not recognize the name of the regulatory agency or know if the certification implied governmental approval or understand what the certification meant.
There were plenty of balk-worthy elements that should have made them walk away from that tin can to hell, but the lack of regulation? No, I can’t blame them for that.
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