ML20008G154

Statement Outlining Concept of Character of License Applicant as Guide to Evidentiary Questions at OL Hearing. Certificate of Svc Encl

ML20008G154
Person / Time
Site:	South Texas
Issue date:	05/05/1981
From:	Coy P Citizens Concerned About Nuclear Power, INC.
To:
References
NUDOCS 8107020366
Download: ML20008G154 (7)

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, . UNITED STATES OF AMERICA & poggygg

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NUCLEAR REGULATORY COMMISSION l

- Ohme MA'rd**7193 *

~1 BEFORE THE ATOMIC SAFETY AND LICENSING BOARD 4" '

(# OMMof&egegg q Staice E G, US In the Matter of )

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HOUSTON LIGHTING AND POWER CO. ) Docket-Nos. 50-498 (South Texas Project, Units 1 & 2) ) 50-499

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CCANP BRIEF ON

" CHARACTER" As a result of numerous investigations resulting in findings of repeated violations of NRC standards and regulations, the basic competence and character of the license applicant, Houston Lighting and Power Co. has come into question as a principal issue in these

~ licensing hearings. The purpose of this brief is to provide some outline to the broad concept of " character" as a guide to evidentiary questions at trial.

1. The Atomic Energy Act provides that:

Each application for a license hereunder shall be in writing and shall specifically state such information as the Commission by rule or regulation may determine to be necessary to decide

... the character of the aaplicant ... 42 U.S.C. 52232 (emphasis added).

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The character of the applicant is an essential and one of the very few statutorily mandated criteria for receiving a license from the l

Nuclear Regulatory Commission for construction or operation of a

. nuclear power plant. The Act gces on to provide that:

Any license may be revoked for any material false statement in the application ... or because of conditions revealed by such application ... or any report, record or inspection or other means which would warrant the Commission to refuse to gra:.t a license on an original application. 42 U.S.C 2236.

Accordingly, a finding of inadequate character would be grounds for eitherdenying or revoking a license, 3)$D$ 1 O'I JB 107 0 2 0 36Dbo G

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.~ ,'2. The prominent place which the question of character takes in the license application process is integral to the.whole regulatory scheme by which the licensee is given primary responsibility for the construction and operation of a saf e :Nactor. The NRC does not itself take front line responsibility for assuring that a plant is either built or operated safely. Rather the licensee _is__ -

required to follow procedures established by the NRC, or approved in the licensing process, which are designed to assure the safe l

construc tion or operation of the reactor. The role of the NRC is essentially that of an auditor, to see that procedures are followed.

This reliance on the licensee demands as an essential elemant of the whole regulatory scheme that the licensee demonstrate responsibilit; reliability, honesty and care in executing the procedures that are the only assurance that a reactor will be built and operated safely.

l l The character of the licensee stands, in:this regulatory scheme, 1

i as the principal bulwark against the untcld health consequences of 1

i excessive emissions of radiation into the environment or the t potentially catastrophic effects of a nuclear reactor " class nine" E accident. (For an instructive comparison between the effect of a l

l seric s reactor accident and that of a one-megaton nuclect weapon see " Catastrophic Releases of Radioactivity," Scientific American, April 19 81, Vol. 244,No.4,pp.41-4 7. This article concludes that the area of land contaminated by the reactor accident is smaller (somewhat more than half at a 10 rem dose rate)"but the land stays contaminated 1

longer," id. 45.) Once the character of the licensee is brought into doubt, as it has in this proceeding, it becomes the mcst importan t question by far to te faced by the licensing authority.

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3. The Atomic Energy Act has not scught to define in detail the character required to take responsibility as ? licensee for the ._

construction and ope. ration of a nuclear reactor. Indeed the Supreme 1

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,' 'ourt C has stated that, Reputation and character are quite tangible attributes, but there can be no legislative definition of them that can automatically attach to or identify individuals possessing them, and necessarily the aid of some executive agency must be invcked. Hall v Geicer- Jones Co., 242 U.S. 539, 553 (1917)

As a general matter, where the legislature has not provided an express directive, the term character slould be given its commonly understood definition. Mester v. U.S., 70 F.Supp. 118 (E.D.N.Y. 1947) at 122. But the administrator must weigh those attributes of character most heavily that are most significant for proper discharge of a licensee's responsibilities.

4. Most broadly, character is the moral quality of a person which constitutes his intrinsic nature. Dalev v License Appeal Commission, 211 NE2d 573, 576. This is equally true of a real person or the corporation, which has a fictional personality comprised of all those who control the corporation. In the cited case the license of a sma ll corporation was challenged on rhe basis of the character of its president. For a large diffusely controlled corporation, the character of many more persons contributes to making up th6 coEporatd~~~

character. In addition to the corpor - officers and top management, there is the Board of Directors ant e , ,n irincipal shsareholders, l

who through exercise of control over cot wrate affairs lend to its I

composite corporate character. The very diffuseness of this I contrcl and inability to fix a precise locus of responsibility for determining the overall corporate character gives thecorporate character the same intrinsic nature as that of a real person.

Court of Appeals has stated that,

" Character" is a generalized description of one's dispostion in regard to a general trait such as honesty, temoerance or care. fulness... Frase v Henrv, 444 F.2d 1228 (10th Cir. 1971).

- corporation, as the composite of those who centrol the corporation, o

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Similarly displays a chcractor defined by its inherent disposition with regard to certain traits such as honesty, reliability, carefulness, regard-for regulations imposed by law and willingness to take responsibility.

This intrinsic quality of character distinguishes it from

-mere questions c# competence. Competence can be acquired through training and experience, admonition and correction of past errors.

In the corporate context competence can be bought in the form of hiring persons with the competence not alrecdy possessed by the-employees of the corporation. Character though is less mutable.

It persists in the face of admonitions and experience, much as the violations involved in this proceeding :. lasted through numerous inspections and warnings. Absent a radical change in the control of a corporation, the corporate character will remain just,as immutable as that of a real person. Any repetition of behavior that has come under continued reprimand or serious punisnment in the past should be attributed to corporate character. A lack of willingness, even anxiousness, to conform to the requirements of a license af ter such experience certainly displays a f ailure of 3

the character necessary to properly construct and operate a nuclear reactor.

5. The NRC has not yet had occasion to lend regula: Cry definition and detail to the legislative requirement that a licensee show adequate character in its application. The first serious questioning of the adequacy of an applicant's character has occurred only in the_present proceedings and those regarding the restart of Three Mile Island, Unit 1. The NRC, in its September 22,1930 Order did provide important contours to the concept of character for the proceedings by identifying two important patterns which _._

the allegations against Houston Light and Power revealed;

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- 5 i) failure to keep itself knowledgeable about the construction of the plant, and ii) . abdicat$on of responsibility for construction.

It is of course axiomatic that only the licensee bears responsibility for the construction of the facility. E.g. VEPCO(North Anna) 6 NRC 1127 (1977).

I n this same September 22,1980 Order the NRC also suggested

'that character, rathe'r than something of a lesser order, may be involved in the applicant's deficient conduct. In response to several reasons or " root causes" offered by the applicant for its conduct the NRC queried whether these problems were "themselves ore basic deficiencies."(Slip Op. 5,n.2).

symptoms'of some other and m

-The NRC also indicated that history and the repetitious nature of the conduct 1would also be relevant to the issue of character,id. 17. .

It is clearly past conduct and not promises or future projections

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thtt. constitutes character.

6. A number of cases from the analogous context of Federal Com-munications Commission licensing have helped define the term

" character" as used in the-licensing context. For akample in Barrow v FCC, 285 F.2d 666,668(D.C.Cir. 1960) it was said that, Character in respect to a radio operator obviously includes reliability in the situations in which such an operator must operate.

In another case " disregard for regulatory laws" was considered an i=portant indication of character inadequacy. Mester v. U.S., supra.

Commissioners Gilinsky and Bradford have cited two FCC cases,in their- separate views on the September 22,1980 Order,directly holding b' that abdication of responsibility or abdication .of ; licensee know-ledge about operations may be grounds for denying a license. And of course a history of repeated violations of age ncy rules is a ground r 12 NR: .

g. for. disqualification. United Broadcasting Co. v FCC cited at

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Conclusion Cnaracter is the single most important criteria for Judging whether a license should be granted for. construction or operation of a nuclear reactor. The issues of competence and character are <:learly distinguished by their respective di.ffering susceptibility to change and reform. Competence 1

can be acquired while character cannot. Character is an abiding disposition to behave in a certain way.- A decision on character is not to be confused with issues of simple non-compliance with regulato ry requiremnts. Instances of non-compliance, which to some limited extent may- normally be expected, can be corrected if regulatory procedures are routinely and willingly followed and NRC inspectors are welcomed with openness and candor while performing their function as auditots.

The issue of character arises when similar kinds of

. problems are repeated, routine procedures are subverted, numerous warnings and admonitions to not lead to change, and inspectors intended to assure compliance or employees properly concerned with- - - -

quality and safety are mec with obstruction. Remedial actions taken after non-compliace has been discovered, whfle relevant to the ultimate safety of a clant or even to a refurbished co=petence, cannot be relevant to the underivinc and more endurine cuality of character. Once past actions have esta)lished a disposition toward unreliability, lack of care, disrecard for conformance with regulatory requirements, lack of candor and abdication of responsibilities, no amount of " remedial" action can rehabilitate that character.

Respectfully submitted Robert Hager Esq. /[,

Of counsel j g;y/ r[,,.c Pat Coy for CCENP

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. CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing "CCANP Brief on

' Character'" and " Motion for Leave to File CCAMP Brief on ' Character' Out of Time" have been served by deposit in United States mail, postage' prepaid on this j[ day of May, 1981, to the following:

78 Charles Bechhoefer, Esq. Chairman Atomic Safety and Licensing Atomic Safety and Licensing Board Board Panel U.S. Nuclear Regulatory. Commission. U.S. Nuclear Regulatory Commissio-Washington, D.C. 20555, Washinton D.C. 20555 Dr. James C. Lamb III Docketing ~and Service Section 313 Woodhaven Road Office of the Secretary Chapel Hill, N.C. 27514 U.S. Nuclear Regulatory Commissio

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Mr. Ernest E. Hill Lawrence Livermore Laboratory o r he w a , Reis, P O. So 808 2 e.xelrad & toll Livermore CA 94550 1025 Connecticut Ave. N.W.

Washington D.C. 20036 Edwir. J. Reis .

Of fice of the Executive Lecal Director

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U.S. Nuclear Regulatory Cobmission Washington D.C. 20555 3, erffco One Shell Plaza Houston TX 77002 Brian _eerwick _tsq.

Assistant Attorney General Environmental Protection Division F.O. sox 12548, Capitol Station - - --

Austin TX 76711 Mrs. Pegy Buchora i Executive Director Citizens for Equitable Utilities,Inc.

Route 1, Box 1684 Brazaria TX 77422 l A/

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