Text

Recommends Approval of Revised Enforcement Policy & Publication in Fr as 10CFR2,App C.Experience Over Past Yr W/Interim Policy Has Been Favorable in Ability to Process Cases Administratively.Comment by 811102 Requested
	ML20032B111
Person / Time
Issue date:	10/16/1981
From:	Dircks W; NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO)
To:	;
Shared Package
ML20032B112	List: ML20032B111; ML20032B113;
References
	REF-10CFR9.7, TASK-PIA, TASK-SE SECY-81-600, NUDOCS 8111040480
	Download: ML20032B111 (51)
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{{#Wiki_filter:__ g pa ntou /w A October 16, 1981 \\,,,,,*b SECY-S;-600 ~ POLICY ISSUE (Affirmation) For: The Commission From: William J. Dircks Executive Director for Operations

Subject:

REVISED GENERAL STATEMENT OF P0LICY AND PROCEDURE FOR ENFORCEMENT ACTIONS Purcose: Tc obtain Commission approval of a revised enforcement policy, based on public comments on, and one year's experience with, the Interim Enforcement Policy (IEP). Discussion: On September 4, 1980, the Commission approved publi:ation of a proposed general policy statement on enforcement actions for public comment and interim use (SECY-80-139A). The interim policy statement was published on October 7, 1980 (45 FR 66754). A series of five public meetings were held in early Decem-be'r, 1980 to explain the interim policy and to receive comments on it. These meetings, held in the vicinity of the five NRC regional effices, were announced in the Federal Register (45 FR $9077, 10/17/80) and publicized in advance in local press and were the subject of direct l sclicitati'ons mailed to licensees, professional societies, l identified intervenor groups and environmental organiza-l tions. The meetings were held in split sassions; an after-neon session to explain the policy and to receive comments, and an evening session to receive comments from individuau and groups unable to attend the afternoon session. Attendance at the meetings varied from approximately 35 people (Regions IV and V) to a little over 100 (Regions I and III). All meetings were transcribed. The transcripts were reviewed by the Task Force as part of the revision l process, and are available in the Public Document Room. In addition to cc.ments provided at the public meetings, written comments were submitted by 162 individuals and/or groups. These comments have been reviewed in detail in the course of staff revision of the policy, and wnere appro-priata, comments were adopted.

Contact:

l Oddley Thompson, IE 21909 0111040480 611028 PDR 10CFR ST9.7 ppg

V o. The Commission 2-As expected, the nature of the comments ranged from highly c.ritical to enthuriastically supportive. On balance, how-ever, the general thrust of the comments was unfavorable, with criticism most often directed at: (1) the generally perceived adversarial tone of the policy; (2) the lack of more explicit consideration of extenuating conditions as they might apply to individual cases, thus arguing fo more flexibility for the IE Director to apply judgment and disc stion in his enforcement decisions; (3) inadequate recognition of effective licensee audit programs designed to identify and correct problems internally (insufficient credit for licensee-identified violations); (4) inconsist-ency among the severity levels assigned to violations in the various activity areas; (5) lack of clarity ia the examples of violations in the supplements; and (6) inad-equate distinction between severity levels, particularly for the less serious violations. In addition, there'was considerable interest expressed in the applicability of the Regulatory Flexibility Act of 1980 (the staff has concluded it does not apply); and in the vehicle to be used for promulgation of the policy. In this latter connection, at the September 4, 1980 meeting, the Commission directed that the policy be publisned as an appendix to 10CFR Part 2 in the form of a General Statement of Policy. A number of commenters questioned whether t a policy state-ment was intended to be a regulation with binding effect or general statement of policy. An underlying basis of this policy that is reflected throughout it is that the determination of the appropriate sanction requires the exercise of discretion such that each enforcement action 's tailored to the particular factual situation. In view of the discretion required, the enforcement policy should be adopted as a statement of general policy rather than a regulation, notwithstanding that the statement has been promulgated with notice and comment procedures. A general statement of policy will permit the Commission maximum flexibility in revising the policy statement, and it is expected that the statement, especially the supplements, will be revised as necessary to reflect changes in policy and d4*ertion of the Commission. Y' s m~- R 4 - - -, - - g --~-7

da s. The Commission. Z In drafting the statement, it was expected that the specific enforcement criteria should provide adequate guidance and be applied in the majority of circumstances requiring enforcement actions The policy, as indicated above, does provide discretion to take appropriate action if after considering the policy statement, the Director,-or a reviewing authority if a hearing is held, determinas that application of the criteria is inappropriate. For example, there may oe cases where more than a 25% increase in civil penalty is. appropriate based en prior enforcement history. Finally, in its proposed revision of the policy, the staff has considered the experience gained over the past ye?r in applying.the Interim Enforcement Policy. Overall, that experience has been favorable with regard to the staff's ability to process cases administrative 1y. At the same time, the staff recognizes the need for more definitive procedural guidance for implementation of the policy as it is ultimately approved by the Commission. Preparation of 4 that guidance, in the form of an IE Manual Chapter, is planned following Commission approval of the revised policy. Threr. aspects of the Interim Enforcement Policy have been troublesome: (1) distinguishing between severity level III violations (for which civil penalties are normally imposed under the IEP) and those at severity level IV (for which 4 civil penalt'es are normally imposed only when repetitive-ness is invoived); (2) the categorization of the severity level of all violations associated with an event or problem ~ area of concern'at the same level as that assigned to the event; and (3) limited provisions in the IEP for considera-tion of extenuating circumstances associated with violations cf relatively low actual safety significance in spite of literal congruance with severity level III or higher examples. All tnree of thase problem areas have been surmounted on a temporary basis, and all three are addressed in the revised policy. The staff has rev' sed the p11 icy based on the factors discussed above. is a draft Statement of Consideration to accompany the revised policy for

o. The Commission publication in the Federal Register. A copy of the proposed revised policy is attached as Enclosure 2. is a paraphrased.and condansed compilation of written comments received and NRC disposition of them in the revision. This compilation is prc~ ed for publica-tion as a NUREG document to be issued in conjunction with Federal Register publication of the policy. A draft press release for issuance at the time of Federal Register publication is attached as Enclosure 4. The Office of Public Affairs does not concur in the pro-posed change in press release criteria set forth in Secticn V of the Policy. PA believes press releases should be issued when a civil penalty is proposed, rather than at imposttion. The press release was prepared by the Office of Public Affairs. Recommendations: I recommend the Commission: 1. APPROVE: a. the revised enforcement policy as set forth in, and b. publication in the Federal Register of the revised policy as Appendix C, 10CFR Part 2; 2. NOTE that: a. a Statement of Consideration similar to that set forth in Enciosure 1 will accompany the approved policy for publication in the Federal Register, b. the compilation of comments and disposition there-of will be published as a NUREG document, and c. a press release similar to that set forth in will be issued at the time of Federal Register publication. L-t-6 A i William J. Dircks Executive Director for Operations

Enclosures:

1. Draft Statement of Consideration 2. Revised General Statement of Enforcement Policy 3. Compilation of Ccmments on IEP 4. Draft Press Release

a. 5 Commissioners' ccmments should be provided directly to the Office of t;ir. Secretary by c.o.b. Monday, November 2,1981. Commission Staff Office comments, if any, should be submitted to the Commissioners NLT Monday, October 26, 1981, with an information copy to the Office of the Secretary. If the paper is of such a nature that it requires additional time for analytical review and comment, the Commissioners and the Secretariat should be apprised of when comments may be expected. This paper is tentatively scheduled for discussion at an open meeting during the week of October 26, 1981. Affirmation is tentatively scheduled for the week of November 9,1981. Please refer to the appropriate Weekly Commission Schedule, when published, for a specific date and time. OTSTRIBUTION Commissioners Commission Staff Offices Exec Dir for Operations Exec Legal Director ACRS ASLBP Secretariat B T i

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NUCLEAR REGULATORY COMMISSION 10 CFR Part 2 General Statement of Policy and Procedure for Enforcement Actions e AGENCY: Nuclear Regulatory Ccmmission ACTION: Revised general statement of policy

SUMMARY

The NRC is revising its enforcement policy based on experience gained over the past year in the implementation of the proposed general guidance to the staff published in October 1980, and on comments received during and fol. lowing public meetings on the policy. The policy statement is intended to inform licensees and the public of the bases for taking various enforcement actions. The policy, which provides guidance, is being codified as Appendix C to Part 2 of Title 10 of the Code of Federal Regulations. EFFECTIVE ATE: (To be inserted by Federal Register as of date of publica-tion.) t

l' c' FOR FURTHER INFORMATION CONTACT: Oudley Thompson, Director, Enforcement :.d Investigations Staff, Office of Inspection and Enforcement, US Nuclear Regulatory Commission, Washington, DC 20555 (301-492-4909) l SUPPLEMENTARY INFORMATION: The Nuclear Regulatory Commission is revising its enforcement policy to respond to comments provided on an earlier version published in October,1980, and to reflect experience gained in use of the interim policy. The revised policy describes the general bases on which various enforcement sanctions are to be used as part of the NRC': regulatory program. The statement of general policy set forth belcw (As Appendix C to Part 2) is intended to serve as Commission guidance rather than rigid requirements.

Background:

The criteria used by the Commission's staff to determine categories of non-compliance and enforcement actions arising therefrom (referred to hereafter as " Criteria") were first published on October 17, 1972 (37 FR 21962). These Criteria were subsequently modified on January 3, 1975 (40 FR 820) and on December 3, 1979 (44 FR 77135). In late 1979, the Commission directed the staff to prepare a comprehensive statement of enforcement policy. This staff effort received added urgency with the enactment of Pub. L. 96-295 (signed June 30, 1980), that, among other things, amended Section 234 of the Atomic 1

Energy 'Act to raise the maximum civil penalty the NRC can impose from $5000 to $100,000 per violation and eliminated the. provision limiting the total civil penalties for any 30-day period to'S25,000. On September 4, 1980, the Commission approved a proposed general' statement of policy on enforcement, and directed the staff: (1) to implement-the proposed policy as interim guidance; (2) to publish the proposed policy for public comment; and (3) to conduct a series of public meetings to obtain and consider public comments on the proposed policy. The proposed policy was published in the Federal Register on October 7, 1980 (45 FR 66754)..A series'of five public meetings was announced on October 17, 1980 (45 FR 69077) and copies of both those Federal Register items were mailed to all NRC licensees and to identified public interest and intervenor groups, soliciting their participation in the meetings. Results of Meetinas: Public meetings were held ir aarly December,1980, as scheduled, in Philadelphia, PA, Atlanta, GA, Chicago, IL, Dallas, TX, and Oakland, CA. Attendance at the meetings varied from about 35 (at the Dallas and Oakland meetings) to a little over 100 (at the Philadelphia and Chicago meetings). All meetings were trans-cribed, and transcripts are available in the NRC's Public Document Room at 1717 H Street NW, Washington, DC 20555. l [

In addition to comments received at the public meetings, written comments were submitted by 162 individuals and/or groups. All comments were carefully considered by the staff in its revision of the policy, and where appropriate, the policy was revised to accommodate them. The nature of both verbal and written comments ranged from highly critical to enthusiastically supportive. In general, however, the thrust of the comments was unfavorable, with crit-icism most often directed at: (1) the generally perceived adversarial tone f of the policy; (2) the lack of more explicit consideration of extenuating conditions as they might apply to individual cases, thus arguing for more flexibility for the staff to apply judgment and discretion in enforcement decisions; (3) inadequate recognition of effective licensee audit programs designed to identify and correct problems internally; (4) inconsistency among the severity levels assigned to violations in the various act vity areas; i (5) lack of clarity in the examples of violations in the supplements; and (6) inadequate distinctions between severity levels, particularly for the les, serious violations. Representative concerns (paraphrased by the staff) frequently expressed in both the public meetings and the written comments, and the NRC staff responses to them are set forth below. In addition, a compilation of all written comments, and staff responses to them, has been prepared and will be made available soon in the NRC Public Document Room and through the National Technical Information Service (NTIS), Sp-ingfield, VA, as an NRC report (NUREG-0736). Many of the oral presentations at the public meetings were reiterated in the written com-ments, and the general thrust of all the oral presentations closely paralleled the written comments.

o Comment: The Commission should be involved in any decisions deviating from the stated enforcement policy, whether that deviation results in s greater or lesser civil penalty.

Response

The Commission is notified before proposing each civil penalty. However, requiring the Commission to rule on each deviation would create an undue burden on the Commission. Currently the policy calls for-Commission review when: a. Taking the action may in itself involve public health and safety risks; b. The Commission feels it is desirable; c. The Director feels it is appropriate; or d. A civil penalty for a single violation exceeds $300,000.00. Comment: In implementing this policy NRC should follow the requirements of the Regulatory Flexibility Act of 1980. Resoonse: This policy is not subject to the Regulatory Flexibility Act. i Comment: The size of a fine should be based on hazard, not the abilit.y to f pay.

Response

The legislative history indicates that ability to pay is a factor to be considered in assessing civil penalties. The structure of Table 1 does reflect generally the nature of hazard involved in licensed activities. A civil penalty is not designed to put a licensee out of business. Where it is appropriate to terminate licensed activities, an i order, rather than a civil penalty, is used. l L

Comment: It should not be NRC policy to fine individual operators licensed under 10 CFR Part 55. Resoonse: References to operator civil penalties have been removed from the policy. Enforcement actions for licensed operators will be determined on a case-by-case basis. Comment: Inadvertent errors must be accepted as a distinct possibility and severe penalties should be reserved for willful violations only.

Response

NRC expects, and has required, a high standard of licensee compliance; this policy is designed to ensure that this high standard is maintained. Clearly, willful violations should be treated more harshly. A willful violation may be a criminal violation under the Atomic Energy Act and may be referred to the Department of Justice for appropriate action. Comment: Insufficient time was allowed to prepare for public meetings.

Response

The meetings were announced on October 17, 1980 and were held in early December, l'980; a period of at least six weeks to prepare for the meetings. Comment: Insufficient time has been allowec for written comments.

Response

All comments received before June 1981 were considered in the policy modification, although the formal closing date for receipt of comments was December 31, 1980, which provided almost three months from date of publication in the Federal Register for preparation of written comments.

Comment: The policy should ba withdrawn until' an assessment can be made as to the necessity of new regulations. Response-This policy:does not add any new raquirements. Rather,- it announces how the NRC will enforce existing requirements, d Comment: The Office Director should have 'more -discretion-Resconse: The Office Director has broad discretion. The policy allows for discretion while ensuring that sufficient guidance is present for its even application. Comment: Any civil penalties imposed on nonprofit hospitals or other nonprofit institutions would have to be paid by increasing charges to the public. Resoonse: Table 1 has been modified to address this concern. The Commission does not desire to increase consumer costs. Nevertheless, the Commission believes that civil penalties provide both ~ profit-making and nonprofit institutions with incentives for safety through compliance with its requirements. l Comment: What. criteria were used to place particular violations in their ( corresponding severity levels? 1 Resconse: The actual or potential impact on the health and safety of the public is the fundamental basis for this determination, within each activity area. It is inappropriate, however, to compare severity levels betweec. acti /ity areas. l l 1

Comment: Are the supplements for guidance only or are they mandatory? Resoonse: The supplements are for g'11 dance, as is the entire policy statement. Comment: The aggressive use of monetary civil penalties will not ensure compliance with NRC regulations. Rasconse: While not ensuring compliance, civil penalties are strong incentives to comply. Enforcement actions are almost exclusively retro-spective in nature, of course, and thus address past noncompliance rather than guaranteeing compliance. Nevertheless, the deterrent effect of enforce-ment, including civil penalties, is considered to be substantial. Comment: The language used in the introduction and purpose invites a counterproductive adversarial relationship. Resoonse: The language in the introduction and purpose has been changed to address this concern. Comment: The requirement to submit responses to Notices of Violation under oath or affirmation is unnecessary and contributes to an adversarial ^one. It should not be required for all responses. Responsa: The ac oss-the-board requirement has been eliminz. tad, but the decision to require such sworn responses remains an NRC option under Section 182 of the Atomic Energy Act. The Commission continues to expect accurate, complete and timely information from licensees. The elimination of the oath requirement will not prevent the Commission from taking enforcement action for responses that do not meet that expectation.

Comment: Civil penalties should not be imposed for the same viola- ' tion which is the basis for a_ license revocation or suspension.

Response

The Atomic Energy Act expressly provides for civil penalties to be assessed for any violation which would warrant license revocation. The decision as to whether bcth revocation (or suspension) and civil penalties should be applied for the sama violation is made on a case by case basis. Comment: The matching of Severity Levels to civil penalties may make it easier for the NRC to determine a civil penalty and/or any other sanction, but it takes away from the licensee any chance of proving the existence of mitigating circumstances. Resoonse: Prior to imposing civil penalties, licensees are given the opportunity to raise any mitigating circumstances unique to the case. These circumstances are taken into consideration when the decision is made whether or not to order the imposition of civil penalties. Mitiga-tion or remission ~of civil penalties based on such licensee responses is not uncommon when compelling arguments are presented. Comment: Provisions for escalated action set forth in Table 2 are not appropriate. Resconse: Table 2 is advisory, not mandatory. Comment: Severity levels need to ba revised to more clearly reflect health and safety concerns. Resconse: The number of severity levels has been reduced to five, with additional guidanca in expanded supplements.

] o. Comment: Immediate Action Letters should be called Confirmatory Action Letters. Resoonse: Adopted Comment: Is the Enforcement Policy _a General Statement of Policy or a regulation?

Response

An underlying basis of this policy that is reflected through-out it is that the determination of the appropriate sanction requires the exercise of discretion such that each enforcement action is tailored to the particular factual situation. In view of the discretion provided, the enforcement policy is being adopted as a statement of general policy rat.h r than a regulation, notwithstanding that tha statement has been promulgated with notice and comment procedures. A general statement of policy will permit the Commission maximum flexibility in revising the policy statement and it is expected that the statement, especially the supplements, will be revised a's necessary tb reflect changes in policy and direction of the Commission. In drafting the statement it was expected that the specific enforcement criteria shuld provide adequate guidance and be applied in the majority of -ircumstances requiring enforcement actions. The policy, as indicated above, does provide discretion to take appropriate action if after considering the policy statement, the Directur, or a reviewing authority if a hearing is held, determines that application of the criteria is inappropriate. For example, there may be cases where more than a 25% increase in civil penalty is appropriate based on prior enforcement history. M e-w e-g- w e g - -, - ~ ee-w.-- e

Principal Changes: The fundamental basis of the revised policy remains the same as that articu-lated in the interim policy. That is, violations are categorized by severity in accordance with guidance incorporated in the policy statement. Based on that severity level, the enforcement sanction to be applied is then determined. Depending on the nature of the licensed activity involved, the size of ary base civil penalty that may be called for is then determined and adjusted upward or-downward based on the circumstances of'the specific case. In spite of these basic similarities, substantial changes have been made in how the steps are accomplished and in clarifying the language used to present the policy. The most significant of these changes -include: (1) reduction in the number of severity levels from six to five; (2) provision that severity level III violations be considered for civil penalties, rather than normally assessing civil' penalties for them; (3) elimination of civil penalties for violations identified, corrected and reported by licensees under certain conditions; (4) elimination of e-plicit vulnerability of licensed operators to civil penalty action pending the outcome of further Commission study on this matter; (5) modification of the tone of presentation to avoid an unnecessarily adversarial character; (6) changes in the base civil penalty values to better differentiate among different types of licensees; (7) clarification of a number of passages and of several terms used in the policy; (8) addition of a new supplement containing guidance on violations involving material false statements and reporting failures; and (9) combination of the supplements applying to fuel cycle operation and materials activities into one supplement.

Pursuant to the Atomic Energy Act of 1954, as amended, the Energy _Reorganiza-tion Act of 1974, as amended, and Section 552 of Title 5 of the United States Code, the following statement of policy is published as Appendix C to 10 CFR Part 2 as a document subject to codification to be effective on publication in the FEDERAL REGISTER. e D I e t .we-r, -w r- - - - - - -+m

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APPENDIXC-GENERhlPOLICYANDPROCEDUREFORNRCENFORCEMENTACTIONS The following' statement of general policy and procedure explains the enforcement policy and procedures of the U.S. Nuclear Regulatory Commission and its staff in initiating enforcement actions and of presiding officers, the Atomic Safety and Licensing Appeal Boards, and the Commission in reviewing these actions. This statement is applicable to the enforcement in matters involving the public health and safety, the common defense and security, and the environment.1 I. INTRODUCTION AND PURPOSE The purpose of the NRC enforcement program is to promote and protect the radiological health and safety of the public including employees' health and safety, the common defense and security, and the environment by: Ensuring compliance with NRC regulations and license conditions; Obtaining prompt correction of noncompliance; Deterring future noncompliance; and Encouraging improvement of licensee pertormance, and by example, that of industry, including the prompt identificatio'n and reporting of potential safety problems. Consistent with the purpose of this program, prompt and vigorcus enforcement action will be taken when dealing with licensees who do not achieve the necessary meticulous attention to detail and the high standard of compliance which the NRC expects of its licensees. Each enforcement action is dependent on the circumstances of the case and requires the exercise of discretion after consideration of these policies and procedures. In no case, however, will licensees who cannot achieve and maintain adequate levels of protection be permitted to conduct licensed activities. II. STATUT0RY AUTHORITY AND PROCEDURAL FRAMEWORK A. STATUTORY AUTHORITY The NRC's enforcement jurisdiction is drawn essentially from the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974, as amended. Section 151 of the Atomic Energy Act authorizes NRC to conduct inspections and investigations cnd to issue orders as may be necessary or desirable to procote.the common defense and security or to protect health or to minimize danger to life or property. Section 186 authorizes NRC to revoke licenses under certain circumstances (e.g., for material false statements, in 9atitrust enforcement matters will be dealt with on a case-by-case basis.

resp ose to conditions that would have warranted refusal of a license on an original application, for a licensee's failure to build or operate a facility in accurdance with the terms.of the permit or license,'and for v.iolation of a NRC regulation). Section 234 authorizes NRC to impose civil penalties not to exceed 5100,000 per violation for the violation of' certain specified licensing provisions of the Act, rules, orders, and license terms implementing these provisions, and violations for which licenses can be revoked. Section 232 authorizes NRC to seek injunctive or other equitable relief for violation of regulatory requirements. Section 206 of the Energy Reorganization Act authorizes NRC to impose civil penalties for knowing and conscious failures to provide certain safety information to the NRC. Chapter 18 6f the Atomic Energy Act provides for varying levels of criminal penalties (i.e., monetary fines and imprisonment) for willful violations of the act and regulations or orders issued under Sections 65, 161(b), 161(i), or 161(c) of the Act. Section 223 provides that criminal ~ penalties may be imposed on.certain individuals employed by firms constructing or supplying basic compor.ents of any utilization facility if the individual knowingly 'and willfully. vio'ates NRC requirements such that a basic component could be significantly impaired. Section 236 provides that criminal penalties may be imposed on persons who attempt to or cause sabotage at a nuclear facility or to nuclear fuel. Alleged or suspected criminal violations of the Atomic Energy Act are referred to the Department of Justice for appropriate action. e B. PROCEDURAL FRAMEWORK 10 CFR Part 2, Subpart B, of NRC's regulations sets forth the procedures the NRC uses in exercising its enforcement authority. 10 CFR 2.201 sets forth the procedures for issuing notices of violation. The procedure to be used in assessing civil penalties is set forth in 10 CFR 2.205. This regulation provides that the appropriate NRC Office Director initiates the civil penalty process by issuing a notice of violation and 1 roposed imposition of a civil penalty. The licensee is provided an opportunity to contest in writing the proposed imposition of a civil penalty. After evaluation of the licensee's response, the Director may mitigate, remit, or impose the civil penalty. An opportunity is provided for a hearing if a civil paralty is imposed. The precedure for issuing an order to show cause why a license should not be modified, suspended, or revoked or why-such other action should not be taken is set forth in 10 CFR 2.202. The mechanism for modifying a license by order is set forth in 10 CFR 2.204. These sections of Part 2 provide an opportunity for a hearing to the affected licensee. However, the NRC is authorized to make orders immediately effective if the public health, safety or interest so requires or, in the case of an order to show cause, if the alleged violation is willful. 2

o. III. SEVERITY OF VIOLATIONS Regulatory requirements 2 have varying degrees of safety, safeguards, or environmental. significance. sTherefore, it is essential that the relative importance of each violation be identified as the first step in the enforcement process. Consequently, violations are categorized in terms of five levels of severity to show their relative importance within each of the following seven activity areas: '(1) Reactor Operations; (2) Facility Construction; (3) Safeguards; (4) Health Physics; (5) Transportation; (6) Fuel Cycle and Materials 0perations; and (7) Miscellaneous Activities. Within each activity area Severity Level I has been assigned to violations that are'the most significant and Severity Level V violations are the -least significant. Severity Level I and II violations are of very signi-ficant regulatory concern. In general, violations that'are included in these severity categories involve actual or high potential impact on the public. Severity Level III violations are cause for significant concern. Severity Level IV violations.are less serious but are of more than minor concern; i.e., if left uncorrected, they could lead to a more serious concern. Severity Level V violations are of minnt safety or environmental concern. The relative seriousness of violations at the several Severity Levels applies within each activity area, but comparisons between activity areas are inappropriate. For example, while the immediacy of any hazard to.the public associated with Severity Level I Violations in Reactor Operations is greater than that associated with Severity Level I violations in Reactor Construction, both areas have violations w',ch cover the full range of severity levels. This disparity in relative seriousness of violations in different activity areas is due to the diversity of licensed activities regulated tay NRC and the need for continuing improvement in licensee performance in certain activities, zTne term " requirement" as useo in this policy means a legally binding requirement such as _a statute, regulation, license condition, te:hnical specification, o order. 3

't _While examples are provided in Supplements I through VII for determining the appropriate severity level for violations in each of the seven activity areas, the examples are neither exhaustive nor controlling. These examples do not create new requirements. They reflect the seriousness of violations. of requirements. Enforcement action may be taken only when a violation of regulatory requirements has occurred. Each of the examples in the supple-ments is predicated on such a violation. In each case, the severity of a violation will be characterized at the level best suited to the significance of the particular violation. Licensed activities not directly covered by one of the above listed areas, e.g., export license activities, will be placed in the activ.ity area most suitable in light of the particular violation involved. The NRC expects licensees to provide full, complete, timely, and accurate information and reports. Accordingly, unless otherwise categorized in the Supplements, the severity level of a violation involving the failure to make a required report to the NRC will be based upon the significance of and the circumstances surrounding the matter. Additional guidance on reporting violations is set forth in Supplement VII. IV. ENFORCEMENT ACTIONS This section describes the enforcement sanctions available to NRC and specifies the conditions under which each may be used. The basic sanctions are notices of violation, civil penalties, and orders of various types. Additionally, related administrative aechanisms such as bulletins and confirmatory action letters are used to supplement the enforcement program. In selecting the enforcement sanctions to be applied, NRC will consider enforcement actions taken by other Federal or State regulatory- ~ bcdies having concurrent jurisdiction, such as in transportation matters. With very limited exceptions, whenever noncompliance with NRC requirements is identified, enforcement action is taken. The nature and extent of the enforcement action is intended to reflect th'e seri~ousness of the violation involved. For the vast majority of violations, action by an NRC regional office'is appropriate, in the form of a Notice of Violation requiring a formal responta-from the licensee, describing its corrective actions. The relatively small number of ca'ses involving elevated enforcement action receives substantial attention by the public, and may have significant impact on the licensee's operation. These elevated enforcement actions include civil penalties; orders modifying, suspending or revoking licenses; or orders to cease and desist from designat2d activities. A. NOTICE OF VIOLATION A notice of violation is a written notice utting forth one or more violations of a legally binding requirement. The notice normally requires the licensee to provide a written statement describing (1) corrective steps which have been taken by the licensee and the results achieved; (2) corrective steps which will be taken to prevent recurrence; (3) the date when full compliance will be achieved. 4

1 NRC uses the notice of violation as the standard method for formalizing the existence of a violation. A n6tice of violation is normally the only enforcement action taken, except in cases where the criteria for civil penalties and orders, as set.forth in Sections IV.B and IV.C, respectively, are met. In such cases, the notice 'of violation will be issued in conjunction with the elevated actions. Because the NRC wants to encourage and support licensee initiative for self-identification and correction of problems, NRC will not generally issue a notice of violation for a violation that meets all of the following tests: (1) It was identified by the licensee; (2) It fits in Severity Level IV or V; (3) It was reported, if required; (4) It was or will be corrected, including measures to prevent recrrrence, within a reasonable time; and .(5) It was not a violation that could reasonably be.expec'ted to have been prevented by the licensee's correctiva action for a previous = violation. Licensees are not ordinarily cited for violations resulting from matters not within their control. Generally, however, licensees are held responsible for the acts of their employees. Accordingly, this policy shculd not be construed to excuse personnel' errors. 1 B. CIVIL PENALTY A civil penalty is a monetary penalty that may be imposed for violation of (a) certain specified lica7 sing provisions of the Atomic Energy Act or supplementary NRC rules or orders, (b) any ' requirement for - which a license may be revoked, or (c) reporting requirements under Section 206 of the Energy Reorganization Act. Civil penalties are designed to emphasize the need for lasting remedial action and to deter future violations. Generally, civil penalties are imposed for Severity Level I and II violations, are considered for Severity Level III violations, and may be imposed for Severity Level IV violations that are similar3 to violations discussed in a previous enforcement conference, and for which the enforcement conference was ineffe~ctive in achieving the required corrective action. aihe word "similar," as used in tnis policy, refers to those violations-which could have been reasonably expected to have been prevented by the licensee's corrective action for the previous violation. 5

4 In applying this guidance, NRC normally considers civil penalties only for similar violations that occur from the date of the last inspection or within two years, whichever is greater. Enforcement conferences are normally conducted for.all Severity Level I, II, and III violatioris and for Severity Level IV violations that are considered symptomatic of program deficiencies, rather than isolated concerns. Licensees will be put on notice when a meeting is an Enforcement Conference. Civil penalties will also be considered for knowing and conscious violations of the reporting requirements of Section 206 of the Energy Reorganization Act, and for any willful violations, including those at any Severity Level involving careless disregard of requirements. In structuring the process to assess civil penalties, emphasis has been given to the gravity of the violation involved (e.g., severity level). NRC also considers the financial impact on the licensee of a given penalty, how the problem was identified, the good faith of the licensee, the licensee's prior enforcement history, whether the violation was willful, and the duration of the noncompliance. The application of these factors is described below. NRC imposes different leve'is of penalties for different severity level violations and different classes of licensees. Tables lA and 18 show the base civil penalties for various reactor, fuel cycle, and ~ materials programs. The structure of these tables generally takes into account the gravity of the violation as a primary consideration and the ability to pay as a secondary consideration. Generally, operations involving greater nuclear material inventories a'nd greater potential consequences to the public and licensee employees receive higher civil penalties. Regarding the secondary factor of ability of various classes of licensees to pay the civil penalties, it is not the NRC's intention that the economic impact of a civil penalty be such that it puts a licensee out of business (Orders, rather than civil penalties, are used when the intent is to terminate licensed activities.) or adversely affect: a licensee's ability to safely conduct licensed activities. The deterrent effect of civil penalties is best served when the amounts of such penalties take into account a licensee's " ability to p'ay." In determining the amounts of civil penalties for. licensees for whom -the tables do not reflect the ability to pay, NRC will consider as necessary an increase or decrease on a case-by-case basis. NRC attaches great importance to comprehensive licensee programs for detectior, correction and reporting of problems that may constituta, or lead to, violation of regulatory requirements. This is emphasized by giving credit for effective licensee audit programs when licensees find, correct, and report problems expeditiously and effectively. To encourage licensee self-identification and correction of violations and to avoid potential concealment of problems of safety significance, application of the adjustment factors set forth below may result in no civil penalty being assessed for violations which are identified, reported (if required) and effectively corrected by the licensee, 5

i v provided that such violations'were not disclosed as a result'of overexposures-or unplanned releases af radioactivity or other specific, self-disclosing incidents. On the' other hand, ineffective licensee programs for problem identi-fication or correction are unacceptable. In cases involving serious .NRC-identified violations or involving serious breakdown in management controls, NRC will not hesitate to apply;its full enforcement authority where such action is warranted, including issuing appropriate orders and assessing civil penalties for continuing violations on a per day basis,-up to the statutory limit of $100,000 per violation,-- per_ day. NRC reviews each proposed civil penalty case'on its own merits and adjusts the base civil penalty values upward or downward appropriately. Tables lA and'lB identify the base civil penalty values for different severity levels, activity areas, and classes of licensees. After considering all relevant circumstances, adjustments to these values may be made for the factors described below: 1. Prompt ideatification and reporting' Reduction of up to 50% of the base civil penalty' may be given when a licensee identifies the violation, and promptly reports the violat.,n to tne NRC. In weighing this factor, consider-ation will be _given to.among other things, the length of time' the violation existed prior to discovery,-the opportunity available to discover the ' violation, and the promptness and completeness of any required report. This fa,ctor will not be applied to violations which constitute or are identified as a result of overaxposures, unplanned releases of radioactivity or other specific, self-disclosing incidents. In addition, no consideration will be given to this factor if the licensee does not take it'ediate action to correct the problem upon discovery. 2. Corrective Action to Prevent Recurrence Recognizing that_ corrective action is always required to meet regulatory requirements, the promptness and extent to which the licensee takes corrective action, including actions to prevent recurrance, may be considered in modifying the civil penalty to - i be assessed. Unusually prompt and extensive corrective action a~ may result in reducing the proposed civil penalty as much as 50% of the base value shown in Table 1. On the other hand,.the civil penalty may be increased as much as 25% of the base value if initiation of corrective action is not prompt or if the cor-- rective action is only minimally acceptable. In weighing this 1 factor consideration will be given to, among other thingi, the timeliness of the corrective action, _ degree of licensee ~initia-tive, and comprehensiveness of the corrective action--such as whether the action is focused narrowly to the specific violation -or broadly to the ge1eral area of concern. 7

3. Enforcement History The base civil penalty may be increased as much as 25% depending on the enforcement history in the general area of concern. Specifically, failure to implement previous corrective action for pricr similar problems may increase the civil penalty value. 4. Prior Notice of Similar Events The base civil penalty may be increased as much as 25% for cases where the licensee had prior knowledge of a problem'as a result cf specific NRC or industry notification and failed to take effective preventive steps. 5. Multiple ~0ccurrences The base civil penalty may be increased as much as 25% where multiple examples of a particular violation are identified during the inspection period. This factor is applicable only where NRC identifies the violation, or for violaticas associa:ed with self-disclosing incidents. The above factors are additive so that the civil penalty for any severity level may range from plus or minus 100% of the base value. However, in no instance will a civil penalty for any one violation exceed $100,000. The duration of a violation.may also be considered in assessing a . civil penalty. A greater civil penalty may be imposed if a' violation continues for more than a day. Generally, if a licensee is aware of the existence of a condition which results in an ongoing violation and fails to initiate corrective action, each day the condition existed may be considered as a separats, violation and, as such, subject to a separate additional civil penalty. Generally, for situations where a licensee is unaware of a condition resulting in a continuing violation, a separate violation and attends.nt civil penalty may be considered for each day that the licensee clearly should have been' aware of the condition or had an opportunity to correct the condition, but failed to do so. For example, if such a condition exists for six months and it clearly should have been found by licensee tests or audits which are required once each month, a violation and associated civil penalty could be considered for each of the six separate occasions that the violation was not detected by the test or audiL. Civil penalties in excess of three times the maximum civil penalty for a single Severity Level I violation for each type of licensee require specific Commi'ssion approval in accordance with guidance set forth in Section VI below. 8

NRC statutory authority permits the assessment of the maximum civil " penalty-for each violation The Tables and the mitigating factors determine the. civil penalties which may be assessed for each violation. However, to emphasize the focus on the fundamental underlying causes of a oroblem for which enforcement action appears to be warrantedc the cumulative total for all violations which contributed to or %ere unavoidable consequences of tnat problem-will generally be based an the amount shown in the table, as adjusted. If an evaluation of such multiple violations shows that more than one fundamental problem,is involved, each of which if Y ewed independently, would 'ead to civil i penalty action by itself, then separate civil penalties may be-assessed for each such fundamental problem. In this regard, the failure to make a required report of an event requiring such repcrting is considered a separate problem and will normally be assessed a separate civil penalty. 4 I --e m e my A s l - h 9 s e.

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ABLE 1A BASE CIHL PEMLTIES For Severity I Violations Transoortation Low Specific Safeguards High Level Activity C ust3and

.Non . Fuel-Type A Waste Spent Plant,0pns, Limited Health Category Category Type B _ Quantity Physics ~ x 1 1 Packages Packages j. c. Power Reactors $80,000 $80,000 $40,,000, $80,000 $5,000 ' Test Reactors 10,000~ -10,000 5,000,~ 10,000 2,000 Yiesaarch Reactors &, ' '7 2 Critical Facilities 5,0C0 E,000~~ 2,500 5,000 1,000 Fuel Facilities 40,000 80,000 40,000 40,000 5,000 Industrial Users of Haterial* ' S,000-5,000 2,000 t w Non Profit ' i' Institutions"' c'4,000 \\,. 2',500 1,000 ~ T . Wasta Disposal Licensees 6,000 6,000 3,000 c %' T Other Mat'erial Licenseec- " 000 i' 2,500 1,000

Includes industriallradiographers', 04 cigar pharmacies,. industrial pro"essors and firms engaged in mani.facturi-ng and distribution of byproduct or source ir.aterials.,

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,c - s r; 2, v 8 C. ORDERS-i- An order is a written NRC directive to moaMy,. suspend, or revoke a t (" _ license; to cease and desist from a give.1 practice or activity; or to . take such other action as may be proper (~see 10 CFR 2.202 and 2.204). ~~~ \\ c Orders may be-issued as set forth'below. Urders may also be issued in lieu of, or in addition to,:ciyil-penalties, as. appropriate. 's s s (1) License Modification Orders are issued when some change in licensea equipment, pro'cedures, or management controls is - n y f, m necessary,. c 1 (2) Suspensio[fGr3rsmaybeuiedi u 1, r, =w (a) nTo r'em' vel threat to the oublic health and safety, common-b o idefense'and security, or the environment; 3.. (b) To stop facility constructi^on when (i) further work could preclude _or.significantly hinder the identification and

x correction of an impro~p ely constructed safety related

~ system er component, or,(ii),the licensee's qual.ity assurance s.' ~s. x programeimplementatiqn !s not adequate to. provide confidence that construption. activities!jre being properly carried _J out; ' ?' p x ,(c) When tile' Mcensee he's% rot yesponded adequately to other 4 .s; enforc; ment action; w_ 1; x< 2 J (d) When thehlicensee inter.feres +ith 'he co'nduct of an' inspec-A .i _/ tica pr-infestigation; or N / A s ,4 {s, , VD (e) For any reason no.t mentioned above for which license f" \\ revocition is legally authoiized. m l +j - ~ Suspensions mtTapply to a'il or part of the licensed activity. 'X' ^% 4, ~ Ordinarily, a licensed activity is not suspended (nor is a suspension prolonged) for' failure to comply with requirements f._ e i p,7 - where such failure is not willful and adequate corrective action '3 has.been taken. ij " l ^~ (3) Revocation'Ordars may be used: 'f(a) When a li.cnsee is unable or unwilling ~ to comply with NRC i. requirements, -(b)- When a liccnsee refuses to" correct a violation, m y-b- (c)~ When a lice'nsh dces not respond to a notice of violation s W ' ' ; ;3 where a response was required,, td N4'd) Wher a licensee Tefuses to pay a-fee required by 10 CFR Part 47fgoy v . ~ ~

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(e) For any other reason for revoking a license under Section 186 of the Atomic Energy Act (e.g., any condition which would warrant refusal of a license on an original application). (4) Cease and Desist Orders ar1 typically used to stop an unauthorized activity that has continued siter notification by NRC that such activity is unauthorized. Orders are made effective immediately, without prior opportunity for hearing, whenever it is determined that the public heattn, interest, or safety so requires, or when the order is responding to a violation involving willfulness. Othervise, a prior opportunity for a hearing on the Order is afforded. For cases in which the NRC believes a basis could reasonably exist for not ta'<ing the action as proposed, the licensee will ordinarily be afforded an opportunity to show cause why the Order should not be issued in the proposed manner. D. ESCALATION OF ENFORCEMENT SANCTIONS NRC considers violations of Severity Levels I, II, or III to be i serious. If serious violations occur, NRC will consider issuing orders in conjunction with civil penalties to achieve immediate corrective actions and to deter further recurrence of serious violations. NRC carefully considers the circumstances of each case in selecting and applyirg the sanction (s) appropriate to the case in accordance with the criteria described in Sections IV.B and IV.C, above. Examples of enforcement actions that could be taken for similar Severity Level I, II, or III violations are set forth in Table 2. The actual progression to be used in a particular case will depend on the circumstances. TABLE 2 EXAMPLES OF PROGRESSION OF ES'CALATED ENFORCEMENT ACTIONS FOR SIMILAR VIOLATIONS IN THE SAME ACTIVITY AREA UNDER THE SAME LICENSE Number of similar violations from the date Severity of the last inspection or within the previcus of two years (whichever is creater) Violation 1st 2nd 3rd I a+b a+b+c d II a a+b a+b+c III a(consideration of) a a-b 12

9 a. . Civil penalty b. Suspension.of affected operations until the Office Director _is satis-fied that there is reasonable assurance that the licensee can' operate in compliance with the applicable requirements; or modification of the license, as appropriate. c. Show cause for modification or revocation of the license, as appro-priate. d. Further action, as appropriate. Normally the prcgression of enforcement actions for similar violations will be based on violations under a single license. When atore than one facility is covered by a single license, the normal progression will be based on similar violations at an individual facility and not on similar violations under the same license. However, it should be noted that under some circumstances, e.g., where there is common con-trol over scme facet of facility operations, similar. violations may be charged even though the second violation cccurred at a diffe.'ent facility or under a different license. For example, a phy'sical security violation at Unit 2 of a dual unit plant that repeats an earlier violation at Unit 1 might be considered similar. E. RELATED AD:1INISTRATIVE ACTIONS In addition to the formal enforcement mechanisms of notice of viola-tion, civil penalties, and orders, NRC also uses Cdministrative mechanisms, such as enforcement conferences. bulletins, circulars, information notices, generic letters, notices of' deviation, and confirmatory action letters to supplement its enforcement program. NRC expects licensees to adhcre to any. informal obligations.and com-mitments resulting from these processes and will.not hesitate to issue' appropriate orders to make sure that written commitments are met. (1) Enforcement Conferences are meetings held by NRC with licensee management to discuss safety, safeguarcs or environmental problems, licensee compliance with regulatory requirements, a licensee's proposed corrective measures (including schedules for implementation) and enforcement options available to the NRC. (2) Bulletins, Circulars, Information Notices and Gereric Letters are written notifications to groups of licensees identifying specific problems and recommending specific actions. (3) Notices of Deviation are written notices describing a licensee's or a vendor's failure to satisfy a commitment. The commitment involved has not been made a legally bi. ding requirement..The notice of deviation requests the licensee or vendor to provide a written' explanation or statement cascribing corrective steps ta' Ken (or planned), the results achieved, and the date when corrective action will be completed. 13

(4) Confirmatory Action' Letters are letters confirming a licensae's agreement to take certain actions to remove significant concerns about health and safety,.. safeguards, or the environment. F. REFERRALS T0 DEPARTMENT ~0i' JUSTICE' Alleged or suspected criminal violations of the Atomic Energy Act (and of other relevant Federal laws) are referred to the Department of Justice for investigation. Referral to the Department of Justice dcas not preclude the NRC from taking other enforcement action under this General Statement of Policy. However, such actions _will be coordinated with the Department of Justice to the extent practicable, V. PUBLIC OISCLOSURE OF ENFORCEMENT ACTIONS In accordance with 10 CFR 2.790, all enforcement actions, inspection-reports, and licensees' responsas are publicly available for inspection. In addition, press releases are generally issued for all civil penalties and orders. In the case of orders and civil-penalties related to viola-tions at Severity Levels I or II, press releases are issued at the time of the order or the proposed imposition of the civil penalty.. Press releases are normal.ly issued for all civil penalties involving all other Severity Level' violations only if a civil penalty is imposed. 4 VI. RESPON3ISILITIES The Director, Office of Inspection and Enforcement, as the principal enforcement officer of the NRC, has been delegated the authority to issue - notices of violations, civil penalties, and ordars.4 In recognition that thel regulation of nuclear activities-in many cases does not lend itself to a mechanistic treatment, the Director must exercise judgement and discretion i in determining the severity levels of the ' violations and the appropriate enforcement sanctions, including the decision to impose a civil penalty and the amount of such penalty, after considering the general principles of this statement of policy and the technical merits of the violations and-the surrounding circumstances. The Commission will be orovided written notification of all enforcement actions involvi6g civil' penal' ties or orders. The Commission'will be consulted prior to.taking enforcement action in the following situations (unless the urgency of the situation dictates immediate action):

The Directors of the Offices of Nuclear Reactor Regulation and Nuclear Material Safety and Safeguarcs have also been delegated similar authority, but it is expected that normal use of this authority by NRR and NMSS will be confined to actions necessary in the interest of public health and safety, and not be extended to those matters involving a violation of any existing requirement.

Similarly, it is expected that IF will normally confine its exercise of auth-ority to actions based on violations of existing requirements. The Director, Office of Administration, has been delegated the authority to issue orders where iicensees violate Commission regulations by nonpayment of license fees. 14

e. (1) An action affecting a licensee's operation that requires balancing the public health and safety and common defense and security impli-cations of.not operating with the potential radiological or other. hazards associated with cuntinued operation; (2) Proposals to impose civil penalties in amounts greater than three times the Severity Level I values shown in Table 1A; (3) Any proposed enforcement action on which the Commission asks to be consulted; or (4) Any action the Office Director believes warrants Commission involve-ment. VII. ADMINISTRATIVE REVIEW 0F CIVIL PENALTY AND OTHF0 ORDERS When review of a Director's enforcement action is sought, the reviewing authority (ies), after giving due weight to the Director's judgment, shall independently apply this enforcement policy.s If the reviewing author-ity(ies) decides to assess a civil penalty different in amount from the penalty imposed by the Director, the.'easons for the changes sh,all be set forth in the decision. 'It snoula be noted that under the Commission's current regulations the review process may not result in an increased civil penalty but only in the reduction or affirmation of the penalty imposed by the Director. 15

SUPPLEMENT I - SEVERITY CATEGORIES REACTOR OPERATIONS A. Severity I - Very significant violat';ons involving: 1. A Safety Limit, as defined in 10 CFR 50.36 and the Technical Specifi-cations, being exceeded; 2. A systems designed to prevent or mitigate a serious safety event not 7 being able.to perform its intended safety function when actually called upcn to work; 3. An accidental criticality; or 4. Release of radioactivity offsite greater than ten (10) times the Technical Specification limit.s B. Severity II - Very significant violations involving: 1. A system designed to prevent or mitigate serious safety events not being able to perform its intended safety. function; or 2. Release of radioactivity offsite greater than five (S) times the Technical Specification limit. C. Severity III - Significant violations involving: 1. A Technical Specification Limiting Condition for Operation being exceeded where the appropriate Action Statement was not satisfied that resulted in: (a) Loss of a safety function; or (b) A degraded condition, and sufficient inforcation existed which should have alerted the 'iicensee that he was in an Action Statement condition,;

" System" as used in tnese supplements, includes administrative and managerial control systems, as well as physical systems.

7" Intended safety function" means the total safety functicn, and is not directed toward a loss of redundancy. For example, considering a SWR's high pressure ECCS capability, the violation must result in cocplete invalidation of both HPCI and ADS subsystems. A loss of one subsystem does not defeat the intended safety function as long as the other subsystem is operable. 3The Technical Specification limit as used in this Supplement (Items A.a, 8.2 and C.5) does not apply to the instantaneous release limit. 16

2. A system designed to prevent or mitigate a serious safety event not being able to perform its intended function under certain conditions (e.g., safety system not operable unless offsite power is available; materials or components not environmentally qualified); 3. Serious dereliction of duty on the part of licensed personnel; 4. Changes in reactor parameters which cause unanticipated reductions in margins of safety; 5. Release of radioactivity offsite greater than the Technical Specifi-cation limit; or 6. 10 t/R 50.59 such that a required license amendment was not sought. D. Severity IV - Violations involving: 1. 10 CFR 50.59 that do not result in a Severity Level I, II, or III violation; 2. Failure to meet regulatory requirements that have more than minor safety or environmental significance; or 3. Failure to make a required Licensee Event Report when the reported matter does not constitute a violation. E. Severity Level V - Violations that have minor safety or environmental significance. i a p 17

SUPPLEMENT II - SEVERITY CATEGORIES PART 50 FACILITY CONSTRUCTION A. Severity I - Very significant violations involving a structure or system that is completea9 in such a manner that it would not have satisfied its intended safety related purpose. B. Severity II - Very significant violations involving: 1. A breakdowr in the Quality Assurance program as exemplified by deficiencies in construction QA related to more than one work activity (e.g., structural, piping, electrical, foundations). Such deficiencies normally involve the licensee's failure to conduct adequate audits or to take prompt corrective action on the basis of such audits and, further, involve multiple examples of deficient construction or construction of unknown quality due to inadequate program implementation; or 2. A structure or system that is completed in such a r.:anner that it could have an. adverse affect on the safety of operations. C. Severity III - Significant violations involving: 1. A deficiency in a licensee quality program for construction related to a single work activity (e.g., structural, piping, electrical' or foundations). Such significant deficiency normally involves the licensee's failure to conduct adequate audits or to take pr'ompt corrective action on the basis of such audits, and further involves multiple examples of deficient construction or construction of unknown quality due to inadequate program implementation; 2. Failure to confir::1 the design safety requirements of a structure or system as a result of inadequate preoperational test program imple-mentation; or 3. Failure to make a required 10 CFR 50.55(e) report. D. Severity IV - Violations involving failure'to meet regulatory requirements including one or more Quality Assurance Criteria not amounting to Severity Level I, II, or III violations that have more than minor safety or environ-4 mental significance. E. Severity V - Violations that have minor safety or environmental significance.

"Completec" means completion of construction including review and acceptance by the construction QA organization indicating that the structure or system is ready for preoperational testing.

18

SUPPLEMENT III - SEVERITY CATEGORIES SAFEGUARDS A. Severity I - Vary significant violations involving: 1. An act of radiological sabotage or actual theft, loss, or diversion of a Category I quantity of strategic special nuclear material (SSNM); 2. Actual entry of an unauthorized individual into a vital area or . material access area from outside the protected area (i.e., pene-tration of both barriers) that was not detected at the time of entry; or 3. Failure to prociptly report knowledge of an actual or attempted theft or diversion of SSNM or an act of radiological sabotage. 1 B. Severity II - Very significant violations involving: 1. Actual theft, loss or diversion of a Category II quantity 'of SNM. 2. Failure to use established security systems-(including _cocpensatory measures) designed or used to prevent any unauthorized individual frcm entering a material access area from outside the protected area (i.e., entry through two barriers) so that access could have been gained without detection; 3. Failure to implement approved compensatory measures when the central (or secondary) alarm station is inoperable; 4. Failure to establish or maintain safeguards systems designcd or used 'to prevent or detect the unauthorized removal of a Category I quantity of SSNM from areas of a'uthorized use or storage; or 5. Failure to use established transportation security systems designed or used to prevent the theft, loss, or diversion of a Category I quantity. of SSNM or acts of radiological sabotage. C. Severity III - Significant violations involving: 1. Failure to control access to a vital area or material access area from inside the protected area or failure to control access to a protected area from outside the protected area; 2. Failure to control access to a transport vehicle or the SNM being transported that do not constitute Severity I or II violations; 3. Failure to establish or maintain safeguards systus designed or used to detect the unauthorized removal of a Category II quantity of SNM from areas of authorized use or storage; 19

4. Failure to properly secure or protect classified or other sensitive safeguards.information; or ~ 0. Severity IV - Violations involving: 1. Failure to establish or maintain safeguards systems designed or used to. detect the unauthorized removal of.a Category III quantity of S51 from areas of authorized use or storage; 2. Failure to implement 10 CFR Parts 25 and 95 and information addressed under Section 142 of the Act, and the NRC approved security plan relevant to those parts; or 3. Other violations, cuch as failure to follow an approved security plan, that have more than minor safeguards significance. E. Severity V - Violations that have minor safeguards significance. l e 20 I i

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SUPPLEMENT IV - SEVERITY CATEGORIES HEALTH PHYSICS 10 CFR PART 2010-t 'A Severity I - Very significant violations' involving: 1. Single exposure of a worker in excess of 25 rems of radiation to the whole body,150 rems to the skin of the whole body, or 375 rems to the feet, ankles,- hands, or-forearms; 2. Annual whole body exposure.of. a member of the public in excess of 2.5 i rems of radiation; 3. Release of radioactive material to an unrestricted area in excess of ten times the limits of 10 CFR 20.106; i 4. Disposal of licensed material in quantities or concentrations in excess of ten times the limits of 10 CFR 20.303; or 5. Expo;ure of a worker in restricted areas of ten times the. limits of 10 CFR 20.103. P B. Severit; II - Very significant violations involving: i 1. Single exposure of a worker in excess of 5 rems of radiation to-the i whole body, 30 rems to the skin of the whole bcdy, or 75 rems to the l feet, ankles, hands or forearms; i 2. Annual whole body exposure of a member of the public in excess of 0.5 rems of radiation; 3. Release of radioactive material to an unrestricted area 'in excess of five times the limits of 10 CFR 20.106; 4. Failure to make an immediate notification as required by 10 CFR 20.403(a)(1) and 10 CFR 20.403(a)(2); 5. Disposal.of licensed material in quantities or concentrations in excess of five times the limits of 10 CFR 20.303, or 5. Exposure of a worker in restricted areas in excess of five times the limits of 10 CFR.20.103. C. Severity III - Significant violation: involving: 1. Single exposure of a worker in excess of 3 rems of radiation to the l whole body, 7.5 rems to the skin of the whole body, or 18.75 rems to

he feet, ankles, hands or forearms; 1

'vPersonnel overexposures and associated violations, incurred during a life saving effort, will be treated separately from this policy. 21 ..... c

2. A radiation level in an unrestricted area that exceeds 100 millirem /lyour for.a one hour period; 3. Failure to make_a 24-hour notification as required by 10 CFR 20.403(b) or an immediate notification required by 10 CFR 20.402(a); 4. Substantial potential for an exposure or release in excess of 10 CFR 20 whether or not such exposure or release occurs (e.g., entry into high radiation areas, such as under reactor vessels or in the vicinity of exposed radiographic sources, without having performed an' adequate survey, operation of a radiation facility with a nonfunctioning interlock system); 5. Release of radivacs.ive material to an unrestricted area in excess of the limits of 10 CFR 20.106; 6. Improper disposal of licensed material not covered in Severity Levels I or II; 7. Exposure of a worker in restricted areas in excess of the limits.of 10 CFR 20.105; or 8. Release for unrestricted use of contaminated or radioactive material or equipment which poses a realistic potential for significant ~ exposure to members of the public, or which reflects a programmatic (rather than isolated) weakness-in the radiation control program; 9. Cumulative worker exposure above regulatory limits when such cumu-lative exposure reflects a programmatic, rather than an iso' lated ~ weakness in radiation protection; or 10. Conduct of licensee activities by a technically unqualified person. D. Severity IV - Violations involving: 1. Exposures in excess of the limits of 10 CFR 20.101 not constituting Severity level I, II,.or III violations; 2. A radiation level in an ' unrestricted area such that' an individual could receive. greater than 2 millirem in a one hour period or 100 millirem in any seven consecutive days; 3. Failure to make a 30-day notification required by 10 CFR 20.405; 4. Failure to make a followup written report as required by 10 CFR 20.402(b), 20.408, and 20.409; or 5. Any other matter that has more than minor safety or environmental significance. E. Severity V - Violations that have minor sdety or environmental signi-ficance. 22

SUPPLEMENT V, SEVERITY CATEGORIES TRANSPORTATION 11 A. Severity I - Very significant violations of NRC transportation require-ments involving: 1. Annual whole body radiation exposure of a member of the public in excess. of 0.5 rems of radiation; or

2..

Breach of package integrity resulting in surface contamination or external radiation levels in excess of ten times the NRC limits. B. Severity II - Very significant violations of NRC transportation require-ments involving: 1. Breach of package integrity resulting in surface contamination or external radiation levels in excess of NRC requirements; 2. Surface contamination or external.radiatica levels in excess of three times NRC limits that did not result from a breach of package integrity; or 3. Failure to make required initial notifications associated with Severity Level I or II violations. C. Severity III - Significant violations of NRC transporta, tion raquirements involving: 1. Breach of package integrity; 2. Surface contamination or external radiation levels in excess of, but less than a factor of three above NRC requirements, that did not result from a breach of package integrity; 3. Any noncomplian'ce with labelling, placarding, shipping paper, packaging, loading, or other requirements that could reasonably result in the following: a. Improper identification of the type, quantity, or form of material; or b. Failure of the carrier or recipient to exercise adequate controls; and ~ 5cce transportation requirements are applied to more than one licensee ' involved in.the same activity such as a shipper (10 CFR 73.20) and a carrier (10 CFR 70.20a). When a violation of such a requirement occurs, enforcement action will be directed against the responsible licensee which under the circumstances of the case may be one or more of the licensees involved. 23

c. Substantial potential for personnel exposure or contamination, or improper transfer of material; or 4. Failure to make required initial notification associated with Severity Level III violations. D. Severity IV - Violations of NRC transportation requirements involving: 1. Package selection or preparation. requirements which do not result in a breach of package integrity or surface contamination or external radiation levels in excess of NRC requirements; or 2. Other violations that have more than minor safety or environmental significance. E. Severity V - Violations that have minor safety or environmental signifi-cance. 24

e SUPPLEMENT VI - SEVERITY CATEGORIES FUEL CYCLE AND MATERIALS OPERATIONS A. Severity I - Very significant violations involving: 1. Radiation levels, contamination 14vels, or releases that exceed ten times the limits specified in the license; 2. A system designed to prevent or mitigate a serious safety event not being operable when actually required to perform its design function; or 3. A nuclear criticality accident. 8. Severity II - Very significant violations involving: 1. Radiation levels, contamination levels, or releases that exceed five times the limits specified in the license; or 2. A. system designed to prevent or mitigate a serious safety ' event being inoperable. C. Severity III - Significant violations involv.ing: 1. Failure to control access to licensed materials for radiation purposes as specified by NRC requirements; 2. Possession or use of unauthorized equipment or materials in the conduct of licensee activities; ~ ~ 3. Use of radioactive material on humans where such use is not authorized; s, 4. Conduct of licensed activities by a technically unqualified person; 5. Radiation levels, contamination levels, or releases that exceed the limits spe.cified in the license; or 6. Medical ther&peutic misadministrations. D. Severity IV - Violations involving: 1. Failure to maintain patients hospitalized who have cobalt-60, cesium-137, or iridium-192 implante or to conduct required leakage or contamination tests, or to use properly calibrated equipment; 2. Other violations that have more than minor safety or environmental significance; or 3. Medical diagnostic misadministrations. E. Severity V - Violations that have minor safety or environmental significance. 25

SUPPLEMENT VII - SEVERITY CATEGORIES MISCELLANEOUS ACTIVITIES A. Severity I - Ver-/ significant violations involving a Material False Statement (MFS)1 or a reporting failure,ta with management awareness, involving information which, had it been available to the NRC and accurate at the time the information should have been submitted, would clearly have resulted in regulatory action. B. Severity II - Very significant violations involving: 1. The same type violation as in A but in the absence of management awareness; 2. A MFS or a reporting failure, with management awareness, involving information which, had it been available to the NRC and accurate at the time the information_should have been submitted, probably would have resulted in regulatory action or would likely have resulted in NRC seeking further information; 3. Discrimination, which is prohibited by Section 210 of the Energy Reorganization Act (ERA), by management at any level above first-line supervision, against an employee for attempting to communicate or actually communicating with NRC; or 4. A knowing and conscious failure to provide the notice required by Part 21. C. Saverity III - Significant violations involving: 1. The same type violation as in-L 2 but in the absence of management awareness; 2. A MFS or a reporting failure, with management awareness, not con-stituting Severity Level I or II violations; 3. Discrimination, which is' prohibited by Section 210 of the ERA, by first-line supervision, against an amployee for attempting to commun-icate or actually communicating with HRC which is likely to produce an effect on the willingness of others to provide information to the NRC; or 4. Inadequate review or failure to review such that, if an appropriate review had been made as required, a Part 21 report would have been made. "In essencrCa Material False Statement is a statement that is false by ammission or commission anc is relevant to the regulatery process. 13The severity level of an untimely report may be reduced one level dspending On the circumstances surrounding the matter. 26

....e D. Severity IV - Violations involving: 1. The same type of violation as in C.2 in the absence of management awareness; 2. Discrimination, which is prohibited by Section 210 of the ERA, against a person for attempting to communicate or actually com-municating with NRC which is clearly an isolated act that is.likely to produce only a limited effect on the willingness of others to provide information to NRC; or 3. Inadequate review or failure to review under Part 21 or other proce-dural violations associated with Part 21 with more than minor safety significance. E. Severity V - Violations of Part 21 that have minor. safety significance. e i - s. ( 27

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...o. NRC ADOPTS NEW ENFORCEMENT POLICY The Nuclear Regulatory Commission is revising its policy governing enforcement actions for violations of NRC regulations and license conditions. The revised policy is based on the Commission's new authority to impose fines as high as $100,000--compared to $5,000 previously--for each violation of NRC requirements. Its purpose is to protect the public health and safety and the environment by: (1) Ensuring compliance with NRC regulations and license conditions; (2) Obtaining prompt correction of licensee noncompliance; (3) Deterring future noncompliance; and (4) Encouraging improvement of licensee performance, including prompt identification and reporting of potential safety problems. A statement describing the policy was published in the Federal Register on It recogni:es that a failure to observe certain of the NRC's regulations c'ould

...oa. lead to consequences more threatening to the health and safety of the public or of industry workers than might result from failure to observe some other NRC regulations. The. policy therefore provides a range of enforcement actions from more severe, when essential health-and safety-related regulations have been violated, to less_ severe when the violations involve procedural or record-keeping requirements that have only a remote connection to public health and . safety. + Accordingly, five levels of severity of violation have been established--designated Levels I through V. Levels I and II violations are of very significant regulatory concern and generally involve actual or high potential impact on the public. Viciations classified at the lowest level, Severity Level V, are of minor concern and have only remote safety importance. The policy statement also sets forth the types of enforcement actions available to the NRC and outlines the kinds of circumstances in which they will be used. These actions include (1) notices of violation; (2) civil penalties; (3) orders--such as modification, suspension or revocation l of authority to conduct specified activities; (4) other measures--such as enforcement conferences, written notices to groups of licensees identifying specific problems, notices of deviation and immediate action letters; and (5) referrals to the Departmen. of Justice.

.. & a.. Generally, civil penalties are imposed for Severity Level I and I violations, are considered for Severity Level III violations and may be imposed for Severity Level IV violations that are similar to violations discussed in a previous enforcement conference and for which the enforcement conference was ineffective in achieving the reouired corrective action. The actual amount of the penalty to be applied is 'largely dependent on the severity of the violation. Other factors 'to be taken into' account include the duration of the violation,-the way in which the. problem was identified, the financial impact on the licensee, the licensee's prior enforcement history and whether the violation was willful. A proposed version of the revised enforcement policy statement was published in the Federal Register on October 7, 1980, for public comment; and a series of five public meetings were held to discuss the proposed policy. Changes made as a result of the comments received include (1) a provision that Severity Level 3 violations be considered for civil penalties, rather~t.han normally assessing civil penalties at this level; (2) elimination of' civil penalties for violations identified, corrected and reported by licensees under certain conditions ; (3) removal of references to penalties for individual operators pending further Conmission study; (1) l I

r a -. ( c. 4 modification of the tone of presentation of the statement to avoid an unnecessarily adversarial character; and (5) addition of a new supplement containing guidance on violations involving material false statements and reporting failures. The new policy is contained in a new Appendix C to Part 2 of the Commission's regulations and is effective immediately. s. l l l l

I COMMISSION BRIEFING OCTOBER 28,1981 Revised Enforcement Policy i

CHRONOLOGY - SIGNIFICANT DATES l 10/17/72 First Staff Criteria Published (37 FR 21962) l 1/3/75 Criteria Revision (40 FR 820) 12/3/79 Criteria Revision (44 FR 77135) i 6/30/80 Increased Civil Penalty Authority (PL 96-295) l l 9/4/80 Commission Approval of Interim Policy (Secy 80-139A) l 10/7/80 Interim Policy Published (45 FR 66754) l 12/80 Public Meetings in Regional Cities 6/81 Last of 162 Written Comments Received l 10/16/81 Revised Policy Submitted for Commission Review l (Secy 81-600) l 1 f CONTACT: D. THOMPSON 24909

l i COMMISSION BRIEFING i OCTOBER 28,1981 l Revised Enforcement Policy i Significant Comments on Interim Policy i

Overall Tone is too Hostile and Unnecessarily Adversarial
More Flexibility is needed to Permit Consideration of j

Extenuating Circumstances on Individual Cases e Provision for Civil Penalties for Licensee-Identified Violations is Counter to NRC Emphasis on QA Programs

Seriousness of Violations is inconsistent among Various Activity Areas j

e Examples in Supplements need Clarification j e Difficult to Distinguish Among Severity Levels

Provisions of Regulatory Flexibility Act of 1980 were not Met i

e Policy should not be Promulgated as a Rule l CONTACT: D. THOMPSON j 24909 a

COMMISSION BRIEFING OCTOBER 28,1981 Revised Enforcement Policy Significant Differences from Interim Policy e Introduction and Purpose

Emphasis on Discretion e Legal Framework
Condensed Presentation on Section 223, ERA
Added Reference to Section 236, ERA e Severity Levels I
Five Severity Levels Vice Six
Supplements on Fuel Cycle and Materials Combined
New Supplement on MFS, Part 21, Section 210 and Reporting
Clarification that Supplement Examples are Neither Exhaustive nor Controlling
Enforcement Actions
Elimination of Requirement for Responses under Oath or Affirmation
Elimination of Discussion of Enforcement Actions Against Part 55 Licensees
Severity Level ill Violations Considered for Civil Penalty
More Credit for Self-identification and Reporting
Five Adjustment Factors Vice Three

COMMISSION BRIEFING OCTOBER 28, 1981 Revised Enforcement Policy i Significant Differences from Interim Policy (Continued)

Adjustments of 100% Available
Table I Changed to Eight Classes of Licensees Vice Four
Lowered Civil Penalties for Non Category I Safeguards and for Low Level Waste Shipment Violations
Different Civil Penalty Values for Severity Level I and ll Violations
Better Guidance on Continuing Violations
Table ll Specified as Guidance Only e Public Disclosure
Entire Section is New
Proposes no Press Release on Severity Level ill Civil Penalties Until imposition Order (Opposed by PA) l e Responsibilities
Increased Emphasis on Discretion
Administrative Review
Entire Section is New s

CONTACT: D. THOMPSON .c 24909 s, z n -s ,,4 .o +r

av n "i -

r 2

L \\, k y -[. v.x g x N; 2 .u x,. s, N hk' . '!.Thhificant Dj ffe.*ences-Between the A e ;. 'i ' % Reav,ned and /?nterim Enforcement Policy

s s

1

ss

,1. eg y s "\\f g ,, f 'l r. _.,'. i ' n., > 'M s i"t la-Introduc'ftn ana Piipose- , ;y. (, This'section essertially.renains' the same, but ' tone has been improved. x; .~'; The section emphasiza that 6ach enforcement action requires the exercise of discietion after corisidering the policy. 1 r,. Past Comission policy on' enforcement J erived from the PPPG and d s, e p-past Commission decisions have been plat.ed in the policy without I \\ ' attribution to their source since this' is a new policy. II. Legal Framework \\ E ~ 2' ~~ { This section es:,r,ntially remaks thef am. However,hkdiscription < m. ~ 3 x of the 1980, amr.ndment to -sectiani223 regarding basi,c componcnts has 'w f,,, - that of s been'condensedLto,makethediscushjonnomoredetailedthan~., G' the other s.tatutors set tions. t-.5'briefdescriptionof'Nenew y y ~ section 236. regaiding sabotagi has been added. ', s c. e, ( ( / s s 'III. Severity Levels j. . ~ e - The. intarim p'olicy's 'sh severity levels have been' reduced to five' s u levels. / s

y s

~ Tde-inte" rim policy's seven supplemerti describing the severity i s .., level', have been condensed into six, supplements. A seventh supplement vi .\\,. > e has tieen aoded to ad. dress material, false 'statementsi part 2i, section 210 disc'rimination, and reporting recuirements. \\

/

A number of relatively minor pen and ink changes have been noted in the margin. 1 g f e twn m-

p.,

y -

w- = N3 v s, -p.- _ -,yo c. ., j, [. i / s v.W .A ~ [- \\ The revised policy, em'phasizes'that the examples in the supplements 's a 7 4 areTneither contr9,ina%nor exhaustive but rather mere examples. 11 \\ 3. 'lY. Enforcemeht' Action [' ~ x A.> Notice of Violation X s - x The interim policy requ. ired responses to be under oath. The A ' revised policy deletes that requirement because it created t an unnecessary administrative burden. The description of' enforcement action for licensed operators ,;/' has been deleted. This matter will be handled on a case by case basis. 4 B. Civil Penalty

n
~

7 %aj' Th'e interim policy provides that generally civil penalties ,s s -m s will be'. imposed for violations at the severity III level. The revised policy states that a civil penalty may be con-sidered for'a violation at that level. The assessment process has been substantially changed. A key policy point here is that credit be given for self identifica-tion of problems to reduce the possibility that safety informa-tion might not be given NRC. The factors utilized in assessing a civil penalty have been changed from three to five (prompt identification and reporting, corrective action to prevent recurrence, operational history, pricr notice of similar events, and multiple occurrences). This will require the Staff to exer-cise greater jedgm2nt in determining the amount of a civil y pg 1 -,.. 3 r- -r u --4-.---

p e penalty..The five factors permit the base level to be varied by 1100%. Table 1 has been expanded to provide eight classes of licensees from the fonner four to better describe the different types of licensees and to reflect the varied differences in ability to pay. The revised policy lowers civil penalties for violations involving non-category 1 safeguards and low level waste transportation. The civil' penalty amounts are no longer identical for severity levels I and II violations. The treatment of continuing violations is expanded to provide more detailed policy guidance as to when a violation is appro-priate to be so treated. C. Escalation of Enforcement Sanctions The revised policy states that Table 2, which describes the progression of enforcement for repetitive violations, is not intended to be the normal progression but rather serves as guidance only. V. public Disclosure of Enforcement Action The interim policy did not address this area. This section is consistent with current policy with the exception that press releases would not be issued with proposed civil penalties for violations at the severity III level (rather a press release would be issued at the imposition stage).

I = a 4. VI. Responsib'ilities The revised policy is similar to the interim policy. However, greater emphasis is given to the exercise of discretion. VII. Administrative Review of Civil Penalty and Other Orders This is a new section and _ addresses the application of the policy in the hearing process. -It provides that the presiding officers and ' Appeal Board after giving due weight to the Ofrector's decision shall independently apply the policy and.must give specific reasons for differences in civil penalty assessments. J r i t I i 4 i I 4 4

( ((( (((( ((({(ICf( ( k k ( '( ( k k (( ( ( ( k ( ( kJ i ( ( k 3_ ( k k ( PD/ TRANSMITTAL TO: @/ Document Control. Desk, 016 Phillips h-P' ADVANCED' COPY TO: [/ The Public Document Room DATE: October 29, 1981 P Attached are the'PDR copies of a Commission meeting P transcript /s/ and related meeting document /s/. h They are being forwarded for entry on the Daily Accession: ~ p-List and placement in the Public-Document Room.

S=:

j other distribution is requested or required. No P. i Existing h DCS identification numbers are listed on the individual -p documents ~ wherever possible. AC. l.- Transcript of: Discussion of NRC Enforcemm t Policy,-. October 28, 1981. (1 copy) Vugraphs~ presented at the above meeting: Revised. ~ a. Enforcement Policy. (1 copy) _I,b. Handout: Significant Differences Between the Revised and Interim Enforcement Policy. (1 copy) p i p. SECY-81-600 -- Policy Issue paper, Subj: Revised c. e General Statement of Policy and Procedure for pP Enforcement Actions, dated Oct. 16. 81. (1 copy) . W g jak rbwn P Office of the Secretary m. / '}NJ r g e 0c18 o 1981-2 = g S$g+wi~="" @ g Q$ g %mmanammmenmanannenm&b}}

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