Not sure I agree with that. Performance and discipline is down to the immediate manager, but it sounds like they are trying to avoid responsibility.
For a safety critical job I can't believe that staff flouting the rules aren't disciplibed.
The discipline angle doesn’t fully work when the culture is to get the work done. The managers up the chain tick their boxes to cover their arses and know they won’t get disciplined because their superiors are complicit. Regulation of the culture is difficult because it tends to lead to more tick lists and paperwork.
If the individuals are held responsible by the regulator then they have a real motivation to do things properly and to refuse to cut corners, and their managers are under the same pressure.
Everybody in the chain needs to do it right or lose their industry tickets, with less hiding behind the company.