It's under General Standards and Proceedures in bold. Bold means it is a requirement and not a recommendation.
"If you advertise a diver training course as a PADI course, you must conduct it following PADI training standards and issue a PADI certification to all divers who satisfactorily meet the performance requirements."
When Steve says, "I also have one overriding standard, which is "would I dive with this person?" If they're not a good enough diver for me to go out diving with, they don't get the card," he is in violation of PADI standards when he doesn't issue a PADI certification to folks who've met PADI requirements but don't meet his "overriding standard." I applaud his overriding standard, but he's not allowed to apply it with a PADI course. To apply it without violating standards, he has to teach with an agency that allows such a standard to be added. NAUI and Y come to mind as agencies that allow such an addition.
WRONG!!!
The following is exerpted from the PADI OW instructor manual section one, course standards and overview:
Performance Based Training
The PADI Open Water Diver course builds upon the concept of performance-based
learning. This means student divers progress through the course by demonstrating
that they meet measurable learning objectives. The courses instructional design
sequences these objectives from simple to complex, so students build upon previous
learning as they progress. Attempting to learn something without mastering
prerequisite objectives can complicate and interfere with development and learning.
For this reason, students must satisfactorily demonstrate meeting
knowledge development and water skills performance requirements
(objectives) in their required sequences.
Satisfactory demonstration is called
mastery, which, along with sequence requirements, is discussed in more detail
throughout this guide.
Students are required to demonstrate "mastery" of all information and skills. While some instructors may define "mastery" of mask clearing for example as the ability to get most of the water out of a flooded mask with only a little bit of choking, and uneasiness falling short of full blown panic, I define mastery of that same skill as the ability to do so calmly, quickly, efficiently and repeatedly, on demand.
Mastery means you have it down cold! I don't argue that there are not instructors who will sign off on any yahoo who can struggle thru the required list of skills, but no where in standards does it say that a single sucess on a "problem skill" for a student demonstrates mastery.