Economic recession and a crisis of regulation in safety–critical industries

Abstract

Some states have knowledgeable and competent regulators. Others are less fortunate. The operation and management of safety industries depends upon individuals who are often poorly paid compared to their colleagues in the private sector. In consequence, some regulators lack the experience, motivation and insight needed to guide safety–critical industries. Further problems are created by the increasing use of performance-based regulation. Many countries rely on teams who are specialists in the management of regulatory processes rather than the detailed engineering of complex systems. We argue that these problems have been exacerbated by the recent financial crisis in Europe and North America. Governments have been forced to make additional cuts on spending as their fiscal revenues have declined. This has further limited the scope for regulatory intervention and many of the best engineers have now left state employment. This paper describes the crisis that arises when companies cannot obtain guidance from national agencies. Resource limitations have increased regulatory lag; companies are often unsure of the legal frameworks that apply to new generations of safety–critical industries, ranging from hydraulic fracturing (‘fracking’) to the regulation of commercial space operations. In other areas, the decline in regulatory resources has only been corrected in the aftermath of major accidents, such as Fukushima Dai-ichi and Montara. We conclude that competency criteria are urgently needed to ensure regulators have the technical background necessary to protect safety across a range of different industries.