Saturday, April 7, 2018

Why would a PADI dive shop in the Hawaii NOT accept referrals from any other agency?

What is it in business today that people just lose the desire to connect to others? Scuba is an adventure and exciting and while to some it is their chosen vocation, I feel extraordinarily fortunate to be able to teach people to dive as the way I make a living. There are lot of things that most people don't understand about being a small business owner, and those that do, will get it.

I still can't figure this out! I got a call from a prospective student last week that wanted to complete her education and pool work here (the PNW) with me and then do her cert dives in Hawaii. This is not unusual as many don't want to do cold water dives in the Puget Sound...

When she first called, it sounded like she was going to sign up but she messaged me back saying that this particular shop can't accept a referrals outside of the PADI system. Then, when I gave her PADI's corporate phone number and after she spoke to PADI headquarters, this shop changed their response to, "they choose not to accept referrals outside their system." With as many shops in Hawaii as there are, not losing business is important, but lying or manipulating the customer will eventually backfire.

While I understand that any business can choose to accept or decline business from anyone, it seems particularly unusual that a dive shop would not accept NAUI, SDI, or SSI referral students. While I haven't seen the work that has come from SDI, I have seen the work that came out of SSI. I was an SSI instructor for five years. I never had a student turned away before.

So, if we look at reasons that a shop does not want a non-PADI referral, maybe one of these would be the reason.

(1) Attempting to remain consistent amongst all students. 

Well... Maybe, but every instructor is not a mirror of those from which they learned -- their instructor. So if that's not the case, could consistency of standards be the issue? I don't think so... I teach my students to understand what they've learned so that they can be flexible wherever they go, with whatever equipment they use, and to understand what's required of them even if it's a skill they've never done before.

(2) Afraid that referral students would not ready. 

If anything, my students would be at an advantage as I always do more, teach more, and never cut corners. If a PADI shop wanted to cut corners, eventually they would come across another PADI shop that would catch them. Politics aside and differences between competing agencies is one thing, but keeping skills, techniques, or procedures hidden are pointless as the foundation of every agency's standards are guided by the WRSTC's guidelines.

(3) To make the transition between instructors as easy as possible. 

I'd think that this would be a precarious position to be in. If every instructor performed similarly, it would leave no room for students that needed more work or guidance that was beyond the norm. It would increase the number of drop-outs as well. The industry has about an 80% drop-out rate already, and if PADI issues more certifications, statistically the number of their students dropping out or failing to continue with additional education would also increase.

(4) A credit, bonus, or financial compensation from PADI headquarters for issuing referrals to only other PADI dive shops. 

I'm not sure what the legal ramifications of this kind of practice would be, but I knew when I was a banker, I had to always provide three separate and distinctly independent business referrals (especially when those businesses provided the same services), as to not present those choices to appear to offer favoritism. 

See definitions below:

Collusion is a non-competitive agreement, usually secretive, between two or more persons or businesses to limit open competition, typically by defrauding or gaining an unfair advantage. It can involve an agreement among companies to divide the market, to set prices, to limit production or to share private information. It may also involve bid rigging. The aim of collusion is to increase individual members' profits.

Competition and Antitrust Law:
Competition/antitrust law regulates the conduct and organization of businesses to promote fair competition for the benefit of consumers and in the economic interests of society. Competition laws are strongly enforced in most countries, but a robust compliance program will mitigate a company’s risks. In interactions with competitors, companies should never discuss markets, prices or strategies, and companies should be able to identify red flags.

Conflict of Interest:
A conflict of interest exists when an individual has competing professional obligations or personal or financial interests that have the potential to influence the exercise of her/his duties. Private or personal interests include family and other relatives, personal friends, the clubs and societies to which an individual belongs, private business interests, investments and shareholdings, and any person to whom a favor is owed.

Kickbacks are a form of bribery where one party obtains an undue advantage, and a portion of the undue advantage is “kicked back” to the individual who gave or will give the undue advantage. It differs from other forms of bribery in that it implies a form of collusion between the two parties.

While these concepts ring clearly in a crime novella or in news of a corrupt politician, it seems and awkward pair -- scuba and corruption. This might not be too far from the truth in some capacity as PADI was purchased by a hedge fund in 2015, then again in 2017 for 700 million dollars. They originally had wanted one billion dollars. These numbers represent an incredible investment into a money making enterprise that the hedge fund must feel will continue to produce a return on their investment. Did you know that PADI was thought to be a billion dollar corporation? I never did.

One of the most interesting aspects of the PADI culture are the people that love them without question or those that hate them without mercy. Sadly, while many of the instructors are just trying to put a few extra dollars in their pockets, PADI has been known to throw their instructors under the bus. While there's often three sides to any story, some are incredulous!

An Open Letter of Personal Perspective to the Diving Industry

There is currently a lawsuit underway in federal court in Utah (Tuvell v. Boy Scouts of America, et al., Case 1:12-cv-00128-DB), where a boy lost his life in a PADI Discover Scuba Diving program. Normally, PADI supports its members and vigorously defends litigation. But not this time…
PADI did something strange after the Utah incident: less than two weeks after the accident, without conducting any investigation, without interviewing witnesses or waiting for the authorities to complete their investigation, PADI expelled the instructor, a veteran of the Iraq war, from PADI membership. The agency gave no reason other than that the instructor’s continued membership “was no longer in the best interests of PADI”. When the instructor asked PADI to explain its reasoning or identify which PADI standards he had violated, PADI never even gave him the courtesy of a response.
When the boy’s parents filed litigation, PADI chose to settle the plaintiffs’ case against their organization secretly and attempted to cloak the settlement in confidential agreements. PADI then illegally colluded with the plaintiffs’ attorney to file false pleadings so PADI could remain a party to the case and secretly work against its own member. This was after already settling themselves out of the litigation. When this conduct came to light, PADI was sanctioned by a Federal Judge for its misbehavior. You can access and review this “Document 182” in the case file, which is available to the public at
PADI also took other harmful action in the case. They paid a considerable sum of money to settle the case (the exact amount is noted in the transcript of the April 23, 2014 court hearing where PADI was sanctioned and is also available in the case file on But incredibly, the settlement agreement (that PADI prepared) contains a clause where the parties agreed that PADI’s member was 100% at fault. Then, after the settlement, PADI turned over its instructor member’s incident reports to the plaintiffs without a request or ever informing the member that it was doing so.
You can read the rest of the letter by following the link above.

Lastly, lets take a look at three instructor standards and procedures manuals and any reference they make to referrals. PADI, NAUI, and SDI's are below. I couldn't find SSI's. 

Referral is the process of providing training documentation to another PADI Instructor when a student diver is part-way through a course and wants to finish the course at another location. Referrals expire 12 months from the date of the last training segment. Exception: Advanced Open Water Diver course and Specialty Diver courses have no time limit. Do not withhold a referral as a means of settling personal disputes. Issue a referral if the student diver has met course requirements and any agreed-upon financial arrangements.
General Referral Procedures When referring a student diver: 
1. Complete appropriate documentation as outlined in the course instructor guide and attach a copy of the student diver’s Medical Statement (physician’s clearance), if applicable. 
2. Inform the student diver of the referral expiration (if appropriate) and clearly explain what to expect from the receiving instructor – fees for instruction, pre-assessment, etc. 
When receiving a referred student diver: 
1. Verify the referral documentation. 
2. Before in-water activities, have referred students review, complete and sign a new:
• Release of Liability/Assumption of Risk/Non-agency Acknowledgment Form – General Training • PADI Standard Safe Diving Practices Statement of Understanding • PADI Medical Statement (RSTC Medical form). If a “yes” response in the Divers Medical Questionnaire section is different from the original form provided by the student diver, written clearance to dive from a physician is prerequisite to in-water activities.
3. In preparation for the dive and before beginning open water dive skills, assess the diver’s skills and comfort level in-water and generally assess dive knowledge. If the diver exhibits lack of dive readiness, remediate before training progresses. 
4. If you complete the final open water training session, ensure that all course requirements are met (including watermanship) and submit a PIC (envelope or online) or appropriate application to your PADI Office.

[PADI to Non-PADI]
Referrals from Other Organizations 
When receiving a referred diver from another training organization for course completion, follow the Referral Procedures in the General Standards and Procedures Guide. 
To assess the referred diver’s knowledge and skills, administer the Open Water Diver Online Quick Review, ReActivate Quick Review or Open Water Diver Course final exam, and conduct a confined water dive that reviews Open Water Diver course skills in preparation for open water training dives.

• Dive Verifications. The NAUI Instructor who registers a student for certification is to ensure that the diver has had the supervised open water training and experience as required for the particular course. The certifying instructor who cannot conduct any required open water dive is obliged to ensure another active-status NAUI Instructor conducts the dive or utilize the Universal Referral Program requirements.
• Evaluations. An active-status NAUI Instructor, or other agency instructor in accordance with the Universal Referral Program requirements, must directly supervise the evaluation of students for the record in open water training (directly supervised qualified assistants can conduct skill evaluations to gain experience).

Open Water Global Referral Procedures SDI Instructor to any Active SDI Instructor Procedure:
1. A SDI Instructor sends a student that has completed the academic and confined water portion of the SDI Open Water Scuba Diver course to a second SDI Instructor to complete the open water requirements with a Global Referral Form.
2. Once the student has completed the open water requirements, the SDI Open Water Scuba Diver Instructor signs off that the skills listed on the back of the referral form have been completed.
3. The student takes the signed form back to the original SDI Confined Water Instructor to have their card issued.
4. The SDI Open Water Scuba Diver Instructor completes the SDI Student Registration Form with the names of both instructors and sends it to SDI Headquarters to have the certification card issued with both instructor names on the card. The SDI Instructor may also use the online registration system, or in-store card printing system if available.
SDI Instructor to any Active Instructor Procedure:
1. A SDI Open Water Scuba Diver Instructor sends a student that has completed the academic and confined water portion of the open water course to any other active instructor from any dive training agency to complete the open water requirements with Global Referral Form.
2. The open water instructor signs off that the skills listed on the back of the referral form have been completed.
3. The student takes the signed form back to the original SDI Confined Water Instructor to have their card issued.
4. The SDI Confined Water instructor completes the SDI student registration form with the names of both instructors and sends it to SDI Headquarters to have the certification card issued with both instructor names on the card.
5. The SDI Instructor may also use the online registration system, or in-store card printing system if available.
Any Instructor to an Active SDI Instructor Procedure:
1. The SDI Instructor must teach the student how a personal dive computer works and have them wear a personal dive computer during the open water dives.
2. The SDI Instructor MUST make sure the student completes all the skills required in the SDI Open Water Scuba Diver standards; a short list is found on the back of the Global Referral Form.
3. Upon successful completion of the skills, the SDI Open Water Scuba Diver Instructor completes and sends the SDI Student Registration form to SDI Headquarters to process the certification card where both the confined and open water instructor name will appear on the card.
4. The SDI Instructor may also use the online registration system, or in-store card printing system if available.
5. SDI also requires the SDI Open Water Scuba Diver Instructor to make a copy of the referral letter that accompanied the student and file it with the student training record. 
6. SDI recommends that if a student comes with a Universal Referral Form, they not only issue a SDI certification card but also sign the Universal Referral Form and give it back to the student so they may go back to their original instructor. 

NAUI AND SDI'S PROGRAMS BASICALLY SAY, "WE TRAINED THE DIVER WELL; HAVE A GREAT TIME ON YOUR VACATION; SEE YOU WHEN YOU GET BACK!" Do you see anything wrong with the way one of these agency's treats students coming to them from another agency?

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