ML20127C784
| ML20127C784 | |
| Person / Time | |
|---|---|
| Issue date: | 08/26/1992 |
| From: | Cornell S NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS) |
| To: | NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS) |
| Shared Package | |
| ML20127C770 | List: |
| References | |
| REF-WM-3 NUDOCS 9209100147 | |
| Download: ML20127C784 (1) | |
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WASHINGTON, D C. 20%5 August 26, 1992 MEMORAfiDUM FOR: Division Directors , Dept.ty Directors and Branch Chiefs, NMSS FROM: Sally Cornell, PMDA/f4 MSS
SUBJECT:
f4 MSS POLICY AllD PROCEDURES LETTER l-3 The subject HMSS Policy and Procedures Letter 1-3, Procedures for Handling Requests for 10 CFR 2.206 Actions, was issued on August 24, 1992. By now, I'm sure you have received your copy of this document.
In responding to a question from the technical staff, I found, to my horror, that the entire Director's Decision portion of Enclosure 3 had been left out by mt:. Here, for your copy of NMSS Policy and Procedures Letter 1-3 is a complete replacement Enclosure 3. Please discard what was included with the August 24, 1992 memorandum from Dr. Knapp, subject as above, and replace it with the enclosed document.
My apologies for the inconvenience this oversight may have caused.
Sally Cor 11 PMDA/NMSS
Enclosure:
Replacement Enclosure 3 for NMSS P&P Letter 1-3 M 9 g y 920828 .
Ef4 CLOSURE 3 - DIRECTOR'S DECISION PACKAGE anss
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/ JUN 0 8 982 DilletNo. 40-8027 (10 C.F.R, i 2.206)
Diane Curran, Esq.
Attorney for Petitioners Harmon, Curran, Gallagher & Spielberg 2001 S Street N.W.
Suite 430 Washington, D.C. 20009-1125
Dear Hs. Curran:
This letter is in response to your Petition filed on November 27, 1991, en behalf of Native Americans for a Clean Environment and the Cherokee Nation.
The operatingPetition license requested that the for Sequoyah U.S.Corporation's Fuels Nuclear Regulatory)Comission revoke the (SFC uranium processing plant in Gore, Oklahoma.
Your request was referred to the staff for consideration pursuant to 10 C.F.R.'
i 2.206 of the Comission's regulations. For the reasons stated in the enclosed
" Director's Decision Under 10 C.F.R. I 2.206," the Petition has been denied, except insofar as a Notice of Violation will be issued citing SFC for violating 10 C.F.R. I 40.9, and granted insofar as the staff will publish in the Federal Register notice of all SFC's license amendment applications until the staff takes final action on the license renewal application.
A copy of the Decision will be filed with the Secretary of the Comission for its review in accordance with 10 C.F.R. I 2.206 of the Comission's regulations.
As provided by this regulation, the Decision will constitute the final action of the Comission 25 days af ter the date of issuance of the Decision unless the Comission, on its own motion, institutes a review of the Decision within that time.
A copy of the Notice, which is being filed with the Offica of the Federal Register for publication, is enclosed.
Sincerely, fRobert H. Bernero, Director
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Of fice of Nuclear Material Safety and Safeguards
Enclosures:
- 1. Directors Decision
- 2. Federal Register Notice cc: Sequoyah fuels Corporation James Wilcoxen, Esq. ,
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Docket No. 40 8027 (10 C.FoR. I 2.206)
Diane Curran, Esq.
Attorney for Petitioners Harmon, Curran, Gallagher & Spielberg JUN 0 8132 2001 S Street N.W.
Suite 430 Washington, D.C. 20009-1125
Dear Ms. Curran:
This letter is in response to your Petition filed on November 27, 1991, on The behalf of Native Americans for a Clean Environment and the Cherokee Nation.
Petition requested that the U.S. Nuclear Regulatory Comission revoke the operating license for Sequoyah Fuels Corporation's uranium processing plant in Gore, Oklahoma.
Your request was referred to the staff for consideration pursuant to 10 C.F.R.
I 2.206 of the Comission's regulations. For the reasons stated in the enclosed
" Director's Decision Under 10 C.F.R. I 2.206," the Petition has been denied, except insofar as a Hotice of Violation will be issued citing SFC for violating 10 C.F.R. I 40.9, and granted insofar as the staff will publish in the Federal Register r.otice of all SFC's license amendment applications until the staff takes final action on the license renewal application.
A copy of the Decision will be filed with the Secretary of the Comission for its review in accordance with 10 C.F.R. 5 2.206 of the Comission's regulations.
As provided by this regulation, the Decision will constitute the final action of the Comission 25 days after the date of issuance of the Decision unless the Comission, on its our motion, institutes a review of the Decision within that i time.
A copy of the Notice, which is being filed with the Office of the Federal Register for publication, is enclosed.
Sincerely, Original signed by Robert M. Bemero Robert M. Bernero, Director Office of Nuclear Material Safety and Safeguards
Enclosures:
- 1. Directors Decision 92-03
- 2. Federal Register Notice
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cc: Sequoyah Fuels Corporation :"p
- / k James Wilcoxen. Esq. [MH/E007253)
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84 In the Matter of ) JJ*
) I SEQUOYAH FUELS CORPORATION ) Docket No. 40-8027 l (Gore, Oklahoma, Facility) )
) (10 C.F.R. S 2.206) i OIRECTOR'S DECISION UNDER 10 C.F.R. S 2.206 I. INTRODUCTION Native Americans for a Clean Environment (NACE) and the Cherokee Nation (Petitioners) submitted to the Comission an " Emergency Petition to Revoke Operating License for Sequoyah Fuels Corporations Uranium Processing Facility" (Petition) dated November 27, 1991. The Petition requests that the Comission I imediately revoke the operating license of Sequoyah Fuels Corporation's (SFC or licensee) uranium processing plant in Gore, Oklahoma. In the alternative, Petitioners request that the Petition be considered pursuant to 10 C.F.R. 5 2.206 and that the U.S. Nuclear Regulatory Comission withhold authorization to restart the SFC plant until: (1) completion of a formal adjudicatory hearing on whether the plant can be operated safely and in compliance with its license and NRC safety and environmental regulations; (2) access is provided to the Petitioners to certain internal SFC documents; (3) SFC undertakes a "truly l
2 independent" audit of its management and operations; and (4) SFC completes and implements all changes to management and procedures that are necessary to assure safe operation of the facility. Petitioners also request Federal Register notice of all SFC license amendment applications. The Petition was submitted on an emergency basis because the Petitioners believed that restart of the facility was imminent.
The Petition alleges the following bases for its requests:
(1) SFC's license renewal application contains deliberate material omissions of fact and material false statements relating to soil and ground water contamin-ation at the site; (2) the U.S. Nuclear Regulatory Commission Order Modifying License (Effective Immediately) and Demand for Information (Order or EA 91-067) issued to SFC on October 3, 1991, constitutes the third time in 5 years that the NRC has cited SFC for a serious breakdown in management of the plant. The Order is inadequate to reasonably assure safe operation of the plant, and the experience of the past 5 years demonstrates that SFC is doomed to repeat its unsafe and poor environmentally hazardous practices until the basic causes of its poor environ-mental and safety record are resolved; and, (3) SFC has been given and wasted numerous chances to address and resolve its serious safety and environmental problems, at the expense of public safety and the environment. Moreover, onsite environmental investigations have revealed that the site is grossly contaminated with uranium and other chemicals.
3 By Memorandum dated December 9, 1991, the Commission referred the Petition to the staff for consideration pursuant to 10 C.F.R. S 2.206. The Commission also stated that, prior to any decision by the staff to permit restart of SFC's facility, an open Commission meeting would be held, at which the staff would brief the Commission, and at which Petitioners and SFC would also be given an opportunity to address the Commission.
By letter dated December 23, 1991, the NRC staff acknowledged receipt of the Petition, denied the emergency relief requested, and informed the Petition-ers that their Petition would be treated under 10 C.F.R. S 2.206 of the Commis-sion's regulations and that a decision would be issued within a reasonable amount of time. Also, by letter dated December 23, 1991, the staff requested SFC to respond to the Petition. SFC responded to the Petition on December 23, 1991. By letter dated January 24, 1992, the NRC requested clarification on SFC's response to the Petition. SFC responded by letter dated February 3, 1992.
On January 22, 1992, Ms. Curran on behalf of t!.e Petitioners filed a reply to SFC's December 23, 1991, response. SFC responded to the Petitioners' reply by letter dated February 3, 1992.
On March 17, 1992, the Commission held an open meeting at which the staff, SFC, and Petitioners briefed the Commission.1 On March 20, 1992, SFC, Petition-ers, and the staff submitted supplemental materials for consideration before a decision on restart.
1The Oklahoma Department of Wildlife Conservation filed a written statement with the Commission regarding restart but did not attend the meeting.
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On February 28, 1992, Petitioners asked the NRC to prepare an Environmental Impact Statement or an Environmental Assessment prior to restart of the SFC. ;
facility. By letter dated March 5, 1992, the staff denied the Petitioners request. Petitioners' March 5,1992, request that I reconsider my denial was denied on April 13, 1992. On March 10, 1992, Petitioners filed suit against the NRC in the United States District Court for the District of Columbia seeking a -
temporary restraining order to prevent the Commission from authorizing restart.
On April 15, 1992, the Court dismissed the Petitioners' suit for lack of jurisdiction.- On April 16, 1992, Petitioners sought review of that Order and stay of the April 16, 1992, restart authorization in the United States Court of
- Appeals for the District of Columbia Circuit. Petitioners' motion for an emergency stay was denied by the O.C. Circuit Court of Appeals on April 22, 1992.
Their Petition for review, and motion for expedited briefing, remain pending.
L I have completed my evaluation of the matters raised by the Petitioners and have' determined that, for the reasons stated below, the Petition shall be i
denied, except insofar as a Notice of Violation will tue issued citing SFC for violating 10 C.F.R. S 40.9, and granted insofar as the staff will publish in the
^
Federal Reaister notice of all SFC's. license amendment applications until the staff takes fincl action on the license renewal application.
II. BACKGROUND ,
- On August - 22, 1990, SFC reported to the NRC that uranium contaminated soil
- and water had been discovered during excavation work near the solvent extraction ,
(SX) building. .On August 27, 1990, an NRC Augmented Inspection Team (AIT) began l
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5 to investigate the event. The AIT concluded that SFC's staff did not demon-strate the necessary sensitivity to the potential for uranium contamination er understand the urgency and potential significance of such a problem. As oart of SFC's commitments to the NRC, the company agreed that an independent party would review SFC's entire response to the situation. An investigation by the NRC's Office of Investigation was initiated on September 4, 1990, to determine whether willful violations of NRC regulations had occurred.
On August 29, 1990, SFC submitted its license renewal application to the NRC. SFC was notified on September 18, 1990, that, pursuant to the provisions of 10 C.F.R. 6 40.43(b), the current license would not expire until final action on the renewal application was taken by the Commission. On September 28, 1990, NACE filed a request for hearing, pursuant to 10 C.F.R. 5 2.1205. NACE's request for hearing was granted by Order dated January 24, 1991. f6 Fed. Reg.
7422 (February 22, 1991). The Order afforded other interested persons the opportunity to file petitions for leave to intervene within 30 days of publica-tion of the Order. The Oklahoma Department of Wildlife Conservation and the Cherokee Nation of Oklahoma filed requests to participate in the hearing and were granted intervenor status on May 6, 1991.2 On September 13, 1990, af ter an AIT follow-up inspection, the NRC staf f concurred in the restart of the solvent extraction process. Subsequently, on 2 Citizen's Action for a Safe Environment (CASE) filed a " Limited Appearance Intervention and Objection to Renewal" on July 1,1991. The Atomic Safety and Licensing Board referred CASE's Petition to the staff for consideration as a petition under 10 C.F.R. 5 2.206. That Petition is being treated as a separate matter and is currently under staff review.
6 September 14, 1990, SFC reported the identification of uranium contaminated water beneatn the main process building (MPB). Because the NRC staff was concerned that SFC was not aggressively pursuing an investigation of the ground water contamination under the MPB, on September 19, 1990, the staff issued an Order Modifying License (Effective Immediately) requiring SFC to assure the integrity of the floor and sumps of the MPB, obtain information and develop characterization studies regarding seepage of uranium contaminated water from under the MPB, and develop a plan to identify and characterize other locations on SFC property where past or present operations could have resulted in environ-mental contamination. (EA 90-162), 55 Fed. Reg. 40959 (October 5, 1990). SFC inspected all sumps and floors of the MPB for defects or conditions that could compromise the integrity of the floor. Repairs were made to all identified defects and suspect areas. On December 18, 1990, SFC submitted the final report on the MPB investigation. The site characterization plan for the rest of the site was submitted on October 15, 1990. The Order was closed out in Inspection Report 90-07 dated March 1, 1991. SFC implemented the environmental investiga-tion outlined in the characterization plan and on July 31, 1991, submitted the
" Facility Environmental Investigation Findings Report." On January 10, 1992 SFC submitted its Action Plan for dealing with the site contamination.
Based on information obtained from NRC inspections, the NRC became concerned that certain aspects of the $FC safety and environmental programs were not being performed in full accord with NRC requirements. On November 5, 1990, the Staf f issued a Demand for Information (EA 90-158) that required the Licensee to describe (1) an oversight program it would put into place while management deficiencies and weaknesses in the permanent organization were
7 being remedied, and (2) plans for an independent written appraisal of site and corporate organizations and activities, that would develop recommendations for improvements in management controls and oversight to provide. assurance that personnel would comply with regulatory requirements and site procedures. SFC's November 20, 1990, response contained SFC's interpretation of the August and September events and agreement to implement the oversight program and the management assessment. SFC proposed the firm of PLG, Inc. (PLG) to implement the oversight program. The staff agreed to the use of PLG for the independent oversight. By letter dated December 18, 1990, SFC proposed the firm of Morton and Potter to conduct the independent management assessment. SFC also l indicated in this letter that following the completion of the management l
l assessment, Morton and Potter would conduct a technical appraisal of SFC's safety program. By letter dated January 14, 1991, the NRC approved the use of-Morton and Potter wi.th the understanding that Dr. Bernard Keys would be a
! primary participant in conducting the appraisal. Morton and Potter submitted the management assessment on May 15, 1991. The assessment contained recommendations for needed improvements in the areas of policy, planning, communications, organization, management controls, human resource management, training, and regulatory relations. However, the assessment did not include a discussion and analysis of the root causes of the deficiencies referenced in EA L 90-158. SFC submitted its response to the management assessment on July 15, 1991, agreeing to implement the majority of the recommendations over the next 18 months.
l l During the time period that the management assessment was being conducted, the NRC continued its investigation into the circumstances surrounding the August-
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g and September 1990 events. The NRC investigation activities concluded on June 28, 1991. The staff concluded that certain SFC managers failed to provide complete and accurate information to the NRC, willfully failed to comply with NRC regulations, and made false statements during NRC inspection and investiga-tion activities.
Based on investigation activities and increased inspection effort, the NRC staff determined that although SFC was addressing some of the staff's concerns,
-additional enforcement action was warranted. On October 3, 1991, the NRC staff issued the Order Modifying License (Effective Immediately) and Demand for Information (EA 91-067), 56 Fed. Reg. 51421 (October 11, 1991). The Order required SFC to perform an in-depth review of the administrative control and implementing procedures in the health and safety and environmental programs by qualified non-SFC personnel. The plan and schedule detailing this review was to be submitted to, and approved by, the NRC staff prior to SFC's restart from a planned plant shutdown. The Order also modified SFC's license to remove the Environmental Manager from supervisory or managerial responsibilities over NRC-regulated activities for a period of 1 year. The Demand for Information required that SFC provide information as to why the Senior Vice President, the Vice President of Regulatory Affairs, and the Health Physics Supervisor should be allowed to remain in their respective positions, and as to why the NRC should not be notified 30 days before rehiring the former Manager, Health, Safety, and Environment.
l l-l l On October 17, 1991, SFC proposed Mr. Henry Morton as the overall project manager of the health and safety and environmental programs review effort
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required by the Order; several additional reviewers were also proposed. By letter dated October 24, 1991, the NRC staff approved the proposed reviewers,.
finding them to be technically qualified to perform the programmatic reviews required by the Order. On November 4, 1991, SFC submitted the list of procedures that SFC planned to review prior to restart, those procedures that SFC plans to review after restart and the justification for the priority established, and the timeframe for reviewing the procedures. During December 2 - 6, 1991, the NRC staff conducted a team inspection to review the progress SFC had made towards addressing the Order. The team found that SFC had made appreciable progress in satisfying the requirements of the Order but that extensive work remained. The results of this inspection are documented in Inspection Report 91-16. By letter dated December 10, 1991, SFC submitted additional information on the procedure review to address concerns identified by the team inspection and to respond to questions that were posed by the staf f in a letter of November 15, 1991.
During January 27 - 31, 1992, the NRC staff conducted a second team inspection.
The team concluded that SFC had satisfied Item B of Section VI of the Order, which required SFC to submit, for NRC approval, the plan and schedule for reviewing the adequacy of health and safety and environmental programs. The results of this inspection are documented in Inspection Report 91-17.
By letter dated October 7, 1991 SFC informed the NRC that, in accordance with the Order, the Environmental Manager had been removed from supervisory or managerial responsibilities over NRC-regulated activities at the facility. By letter dated November 15, 1991, SFC informed the NRC that the Senior Vice President, the Vice President of Regulatory Affairs, and the Health Physics Supervisor (discussed in the Oemand) had been removed from their respective
- __ _ - ____ _ _. - _ _ _ ____ .________ _-__=_________ ________- ___ __ _____ _ _ _ _ ___ _ _
S 10 positions. The individuals no longer have any management or operational responsibilities related to NRC-regulated activities. By letter dated .
December 2, 1991, SFC submitted its response to the Demand. In the response, i SFC asserted that, based on the information available to SFC, SFC believed that the individuals named in the Demand neither acted in careless diarsgard of their respective responsibilities for licensed activities nor failed to be candid with the NRC. The Licensee did admit that the individuals made errors in judgment, missed opportunities to identify and correct deficiencies at an earlier stage, and could have done more to assure that the NRC was fully
- informed of SFC activities. In addition, by letter dated December 18, 1991, SFC stated that for the foreseeable future SFC does not plan to use any of these individuals in the performance or supervision of NRC-licensed activities.
SFC also stated that it will provide the NRC with 30 days notice before utilizing any of the individuals in the performance or supervision of NRC-regulated activities. On January 13, 1992, the staff modified SFC's license to confirm these commitments. Confirmatory Order Modifying License (Effective-Immediately) EA 91-196, 57 Fed. Reg. 2611 (January 22, 1992).
By letter dated January 3, 1992, SFC identified two fundamental underlying causes of the problems leading to the NRC's enforcement action. Tne first was that_a strong nuclear safety and regulatory compliance culture had not been instilled throughout the SFC organization, and the second was that a disciplined /
formal management process had not been implemented throughout the organization.
Factors contributing to these underlying causes included the particular back-ground and experience of SFC senior managers, weaknesses in organizational structure, insufficient sensitivity to radiological aspects of SFC's activities.
4
11 and inadequate connunications internally and with the NRC. Attached to the letter was SFC's "Sequoyah Fuels Corporation Plan for Achieving and Maintaini.ng High Performance Standards." The Plan contains the objectives that SFC believes are the principal elements of an effective management process and which will.
ensure that previous problems do not recur at SFC. In a letter dated January 27, 1992, SFC provided a matrix showing how the independent management assessment ,
recommendations and SFC actions in response to those recommendations had-been !
integrated into the Plan.
i As part of the January 27 - 31, 1992, team inspection, the inspection team examined those management issues associated with the November 1990 Demand for ,
-Information. The team reviewed SFC's response to the management assessment -
recommendations, which was supplemented by a program of objectives developed by the current management team. The team concluded that effective implementation of SFC's long-term corrective measures would substantially improve management oversight and controls. The team's review of the root causes >
identified.by the licensee, as well as examination of the deficiencies identified within the organization, indicates that the causal factors identified by SFC are consistent with NRC's. view. The staff concluded that the measures i
proposed and taken by SFC to correct the weaknesses' identified within its management organization satisfy the NRC staff concerns raised'in the 1990 Demand.
1 However, the team'was concerned about SFC's management controls and oversight 1during the' interim period while'the planned long-term improvement programs are--
developed and the staffing of permanent health and safety technicians takes placo.
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12 At the open Commission meeting on March 17, 1992, the staff presented its evaluation of issues related to restart of the SFC facility. The staff stated that authorization to restart depends on: (i) the outcome of a current inves-tigation by the Office of Investigations; (2) a satisfactory response to issues raisad by the inspection team and documented in Inspection Report 91-17; (3) effective SFC performance up to the time of restart authorization; and (4) any advice or direction from the Commission, resulting from the meeting.
The resolution of the items is outlined below.
The first item concerning the investigation by the Office of Investigations is no longer a restart issue. The staff concludes there were no unresolved safety issues which would be a basis for delaying restart. Regarding item 2, SFC's March 13, 1992, response describes its interim management oversight measures, plans for. increased health and safety technician staffing, and corrective actions stemming from a contamination incident. The response satisfies NRC's concerns from Inspection Report 91-17. The third item concerns effective SFC performance. SFC has demonstrated the requisite ability to manage, control, and perform its activities. This conclusion was based on
-observations made during NRC inspections since the March 17, 1992, Commission meeting. The fourth ites, a March 27, 1992, Staff Requirements Memorandum directed the staff to undertake nine actions related to SFC. The staff comple D d those actions necessary prior to a restart authorization and authorized a phased restart of SFC's facility on April 16, 1992, These x- . - .
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, . 4 13 matters are addressed in SECY 92-132, a copy of which was provided to the Petitioners and is publicly available.3 III, DISCUSSION l 1
Petitioners request revocation of the operating license for the SFC facility, or in the alternative, withholding authorization to restart the plant until: (1) completion of a formal adjudicatory hearing on whether the plant can be operated safely and in compliance with its license and NRC safety and environmental regulations; (2) Petitioners are provided access to certain internal SFC documents; (3) SFC undertakes a "truly independent" audit of its ;
management and operations; and-(4) SFC completes and implements all changes to y management and procedures that are necessary to assure safe operation of the facility. ' Petitioners also request Federal. Register notice of all SFC license amendments. The concerns which formed the bases for the Petitioners' requesto are addressed below.
A. . Request for Revocation Based on Material False Statements -;
i Petitioners ~ allege that SFC knew of-severe uranium ground water
-contamination at the site but made-three. material false statements'in the l
3The NRC also considers-the permitted phased restart of the SFC facility'to be-a denial of Diane Curran's request that an EA and EIS be performed prior to restart. That request, made in correspondence between Diane Curran and Robert
- Bernero, is considered by the NRC staffsto effectively embody a 2.206_ request
- that such review take plate.
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l 14 August 29, 1990, license renewal opplication. The statements are (1) in effect, SFC gave false assurances that it had comprehensively surveyed the plant site for uranit.,m contamination and found no serious problems because SFC characterized its ground water monitoring program as " extensive"; (2) SFC stated that ground water monitoring wells were located in the areas most susceptible to ground water contamination, when in fact there were no ground water monitoring wells around or near the main process building (MPB) and the solvent extraction (SX) building; and (3) SFC omitted monitoring data which demonstrated significant uranium contamination (data collected from sand wells around the SX building between 1976 and 1989 and from the subfloor process monitor under the HPB since 1976), and that by omitti,g such information created a false picture that its operations have had a harmless environmental impact. Petitioners also assert that SFC made similar omissions in previous renewal applications.
As alleged by Petitioners, SFC dio characterize its ground water monitoring program as "extensivo". That characterization is, however, simply an opinion describing the size of its program, not a statement of fact which could constitute a material false statement. The essence of the Petitioners' allegation is that SFC misrepresented the ground water monitoring data as so thorough, that the program would have detected any contamination of concern.
Whether the SFC program was vast or small c'oes not permit a conclusion as to whether the program was so comprehensive or inclusive such that SFC would have detected any uranium contamination of concern. SFC made no such representation.
Accordingly, the stsff cannot conclude that SFC's description of its ground water monitoring program as "extensiva" was a false statement of fact.
j 15 With respect to the second alleged material false statement, SFC did state in the renewal application that its ground water monitoring wells were located '
in areas most susceptible to ground water contamination; and it is true that seepage from operations in the SX building and MPB does constitute a significant source of contamination at the site. Petitioners, however, present no basis to conclude, and it cannot be determined at this time, that ground water near the 5X building or MPB is more susceptible to contamination than ground water in other locations, such as areas near Pond #2, the Emergency Basin, the Sanitary Laguon, the clarifier pond, or ammonium nitrate lined ponds. Moreover, if the 5X sandwells and MPB subfloor process monitor measure
" perched" ground water contamination, as argued by Petitioners, then SFC did, in fact, monitor ground water near the SX building and MPB; and there is no issue of a materisi false statement. If ground water near the SX building and MPB were most susceptible _ to contamination, and if the data collected by the SX 9
sandwells and subfloor process monitor are not ground water data, then whether SFC's statement should be treated as a material false statement would depend on whether it could be concluded that SFC willfully misstated the matter with an intent to-deceive, as explained below.
Whether the omission of the SX sandwell and MPB subfloor process monitoring data from the August 1990 renewal application constitutes a material false state-ment within the meaning of S 186 of the Atomic Energy Act and 10 C.F.R. S 40.9, l
i 16 requires consideration of two issues: (1) was the omitted information material and (2) was the omission sufficiently egregious?4 .
Information is material if it is capable of influencing the agency decisionmaker. Virginia #1ectric and Power Co. (North Anna Power Station, Units 1 & 2), CLI-76-22, 4 NRC 480, 487 (1976), aff'd sub nom. Virginia Electric and Power Co. v NRC, 571 F.2d 1289, 1291 (4th Cir. 1978); U.S. v. Weinstock, 231 F. 2d 699, 701 (D.C.Cir. 1956); United States v. Diaz, 690 F. 2d 1352, 1357-58 (11th Cir. 1982). In this case, the omitted SX sandwell and subfloor process monitoring data constitute information relevant to an issue of importance in the license renewal proceeding, potential environmental contamination. The staff concludes that the omitted information is capable of influencing a decision on the renewal of SFC's operating license. Because the staff would consider the omitted information before reaching a decision on renewal, the omitted information is material to the renewal application.
The NRC has construed Section 186 of the Atomic Energy Act and.the regulations implementing that statutory provision such that the term " material false statement" will only be applied to misstatements or omissions of material fact which are egregious because they are made with an intent to mislead the NRC.
- Not only false statements of material fact, but also omissions of material informaticn from a license application, may constitute violations of Section 186 of the Atomic Energy Act. Virginia Electric and Power Co. (North Anna Power Station,- Units 1 & 2), CLI-76-22, 4 NRC 480 (1976), aff'd sub nom.
Virginia Electric and Power Co. v NRC, 571 F.2d 1289, 1291 (4th Cir. 1978).
"(5)ilenc, regarding issues of major importance to licensing decisions is readily reached under the statutory phrase ' material false statement' North Anna, CLI-76-22,"' supra, 4 NRC 480, 489.
17 Statement of Consideration, " Completeness and Accuracy of Information," S2 Fed.
Reg. 49362 (December 31, 1987). As explainc! below, available evidence indicates that neither the omission of the SX sandwell data and the subfloor process monitor data from the August 29, 1990, renewal application, nor SFC's failure to supplement its application with this information, was done with an intent to deceive the NRC. Accordingly, the staff cannot conclude that the omission of that information from the renewal application constitutes a material false r statement. The omitted data does demonstrate uranium contamination under or around the SX building and tiPB; however, SFC did notify the NRC of the fact of uranium contamination in the SX excavation pit on August 22, 1990, and beneath the MPB on September 14, 1990. Since SFC informed the NRC of the fact of contamination, the omission cannot be considered to have been the result of an intent to deceive the NRC about, or to conceal the fact of, contamination.
License applicants have a continuing obligation to keep their applications accurate and up to date. The Commission interprets NRC requirements concerning completeness and accuracy of information such that the f ailure to correct an unintentionally incomplete written submission, or failure to correct written information which raises questions about trustworthiness or connitment to safety, may be treated as violations. General Statement of Policy and Procedure for NRC Enforcement Actions, 10 C.F.R. Part 2, App. C., 3ection VI. Materials licensees such as SFC submit an Environmental Report (ER) with any application for a license or renewal of a license. 10 C.F.R. S S1.60(a). By letter dated September 18, 1990, SFC informed the staff of its intent to revise the environ-mental report submitted with the August 29, 1990, renewal application. Moreover,
18 4
the staff requested that SFC delay its update of the ER until the environmental characterization was complete and until the staff's initial review of the license renewal application was complete. On January 10, 1992, SFC submitted a revised environmental report that incorporates the information from the facility environmental investigation that was conducted at the site, including the SX sandwell and MPB subfloor process monitoring data. Moreover, since SFC notified the staff of uranium contamination in the SX excavation pit on August 22, 1990, -
and beneath the MPB on September la, 1990, the delay in updating the ER with the monitoring data cannot be considered the result of an intent to mislead the NRC.
Accordingly, the staff concluded that although SFC failed to supplement the SFC renewal application until January 10, 1992, there has been no intent to deceive the NRC, and thus the delay in supplementing the renewal application does not constitute a materir.1 false statement.
Petitioners contend that because SFC began collecting the SX sandwell and MPB subfloor process monitoring data in 1976 ar.d since SFC did not include that data in any SFC renewal application, including the August 1990 renewal application, SFC must have deliberately " suppressed" or withheld the data from the NRC. The staff, however, based its conclusion of a management breakdown in part upon the determination, af ter extensive inspection and investigation of the August 1990 SX excavation pit contamination, that SFC managers who were aware of the monitoring data failed to aggressively pursue the apparent contamination suggested by that data because they failed to comprehend the significance of the ,
data. (EA 91-067). Accordingly, in the absence of new evidence, it cannot be concluded the SFC withheld the 3X sandwell and MFo subfloor process monitoring
...- ~. .._ . - - - ~ - - . - -. --. ---
19
- ; data from-any SFC renewal application with an intent to deceive the NRC about
-the presence:of. contamination.
Although it cannot be concluded that SFC made any false affirmative state-ments of material fact in its renewal applications, SFC's omission of the SX sandwell and MPB subfloor process monitor data rendered the renewal applications
~ incomplete. -Information supplied by an applicant to the Commission must be complete ~in all material respects. 10 C.F.R. S 40.9(a). License renewal applicants are required'to submit an ER, which must discuss "the impact of the proposed. action on the environment." -10 C.F.R. $$ 40.31(f) and 51.60(a). The ;
ER must include not only information supporting the proposed action, but also
" adverse information". 10'C.F.R. SS 51.45(b)(1) and (e). The omitted SX-sandwell and subfloor process monitor data constitute " adverse information" regarding the impact of the proposed action on the environment. Because the staff would consider-that information before deciding whether to grant sic's
-renewal application, the license renewal applications are materially incomplete in violation of 10 C.F.R.'$_40.9(a).
l
-The NRC may. revoke materials-licenses in cases where the licensee makes a material-false statement inLthe application. See, All Chemical Isotope Enrich-
- ment, Inc., LBP-90-26, 32 NRC 30'(1990). As-explained above, however, the staff p
b cannot conclude that SFC made any material: false statement in its renewal-4 l applications. - Accordingly,-the staff concludes that license' revocation would be
=an excessively harsh and~ unwarranted remedy in this case, and denies'the Petitioners' request:to revoke SFC's operating license. A violation'of NRC requirements, l
p i
20 4
even a material false statement (which is not involved here), does not, in and of itself, warrant the extreme remedy of revocation. The choice of remedy e-ssts within the sound discretion of the Commission. See, Petition for Emergency and Remedial Action, CLI-78-6, 7 NRC 400, 405-06 (1978) and Washington Public Power Supply System (WNP Nos. 4 & 5), DD-82-6, 15 NRC 1761, 1766, n. 9 (1982), based on factors such as the significance of the underlying violations and the effectiveness of the sanction in securing lasting corrective action. Pacific Gas & Electric Company, (Diablo Canyon Nuclear Power Plant, Unit 1), 00-84-8, 19 NRC 924, 933 (1984).
Enforcement options other than revocation include a notie.e of violation, a civil penalty, or appropriate orcers. In this case, the staff has already ordered SFC-to suspend operations based in part upon SFC's failure to promptly notify the NRC-of contamination around and under the SX building and the MPB and SFC's failure to supply the SX sandwell and MPB subfloor process monitor data to the NRC. See, " Order Modifying License (Effective Immediately) and Demand for Information", EA 91-067 (October 3, 1991). Additionally, significant action has been taken regarding members of SFC management. See, " Confirmatory Order Modifying License (Effective Immediately)", EA 91-196 (January 13, 1992).
Additior. ally, the staff modified SFC's license to remove a manager from the supervision of HRC regulated activities for 1 year and to require that for 2 years thereafter, SFC Shall not reassign that person to the supervision of NRC-regulated activities without providing 30 days prior notice. See, " Order Modifying License (Effective Immediately) and Demand for Information", EA 91-067 (October 3, 1991). Those actions were taken in response to a violation which
s t
-g- , ,
21 ,
involved withholding from an NRC inspector information concerning uranium con-tamination.in-the SX excavation pit.
Even though significant enforcement action.has been taken against SFC, the staff proposes to issue a notice of violation against SFC for violating 10'C.F.R. 6 40.9.
B. [ Request-for Formal Adjudicatory Hearing and Access to SFC Internal Documents Before Permitting Restar,t
?
Petitioners request that before permitting restart, the Commission order a formal adjudicatory hearing to. determine whether .the SFC facility can be operated safely. Petitioners argue that the pending'Subpart-L renewal hearing is inadequate to address this issue because cross-examination of witnesses and discovery of SFC internal documents are necessary, but Subpart L prohibits discovery and provides only for limited oral presentations in lieu of a formal hearing. .10 C.F.R. SS 2.1231 and.2.1233. Although the Commission, in its discretion, could order such:a hearing, there is'no legal requirement in this case to. conduct a formal adjudicatory hearing before restart is permitted. SFC
= argues that the Petitioners' request ~ for. a formal adjudicatory hearing prior to P
restartiis.Lin_ essence,La legally impermissible attempt to litigate the suffi-
'ciency of.NRC; enforcement: action'in EA 91-067. There.is no right to a hearing ufor;the: purpose of challenging the sufficiency of past or contemplated enforce-
. ment actions, including orders.to suspend. Bellotti v NRC, 725 F.2d-1380, 1383 I~
.(D.C..Cir.-1983); Sequoyah Fuels Corporation, CLI-86-19, 24 NRC 508, 513-514 L
o l -.
l L
_ - - - . . _ . _ . . _ - . . ._ _ . . . _ . ~ _ .
22 '
(1986); Public Service Company of Indiana (Marble Hill Nuclear Generating Station, Units 1 and 2), CLI-80-10, 11 NRC 438, 441 (1980); and Houston Lighting and Power Company (South Texas Project, Units 1 and 2), CLI-80-32, 12 NRC 281, 289 (1980). Nor is'there a right to a hearing on the lifting of a suspension.
Three Mile Island Alert,-Inc. v NRC, 771 F.2d 720, 729-30 (3d Cir. 1985), cert. 1 den., 475 U.S. 1082 (1986); Southern California Edison Company, (San Onofre Nuclear Generating Station, Unit 1), CLI-85-10, 21 NRC 1569,1575, n. 7 (1985);
Pacific Gas and Electric Company (Diablo Canyon Nuclear Power Plant, Units 1 and 2),_CLI-84-05, 19 NRC 953, aff'd. San Luis Obispo Mothers For Peace v NRC, 751.F.-2d 1287, 1314 (D.C. Cir. 1984), aff'd on reh'a en banc, 789 F.2d 26 (D.C. Cir. 1986).5 10 C.F.R. 5 2.1209(k). Therefore,'the staff does not believe
-that the Petitioners have provided a sufficient basis for cny hearing or access to internal SFC documents.
C, Petitioners Allege-EA 91-067 is Inadequate to Reasonably Assure Safe Operation of-the SFC Plant
' Petitioners-contend that SFC has routinely violated safety procedures.
- and put workers at. significant risk over the past year despite oversight, that the ' violations are the same ones for which SFC was cited previously, Land _that this cycle will~not be-broken'because (a) the fundamental causes of 5To the extent' discovery.of SFC internal _ documents and cross-examination.might be necessary to resolve questions within the scope of the renewal hearing, the-Commission's rules l provide for such an eventuality. 10 C.F.R. S 2.1209(k).
t
- -- , - , . - - . , - ,, ~ . - , . . - - , , . -
- ,v. .,
l 23 the management breakdown have not been identified and (b) SFC has hired the same consultants who were involved in two previous unsuccessful management studies, and who, therefore, are not sufficiently independent to be objective.
- 1. Failure to identify fundamental causes of management breakdown Petitioners contend that the staff has ne/er obtainted a satisf actory f answer to its questions concerning the fundamental causes of SFC's problems.
Petitioners further contend that the staff apparently plans to allow SFC to resume operations without identifying the source of its management problems.
The November 1990 Demand stated that because the fundamental causes of SFC's failures could not be determined, the Commission required additional information to determine if there was reasonable assurance that the Licensee could properly manage its activities in accordance with the regulations and License No.
SUB-1010. Accordingly, SFC was required to state whether it was willing to have -
an independent management appraisal conducted, which would recommend necessary improvements in management controls and nyersight. The appraisal report was to include the view of the independent organization as to causes of the deficiencies.
The staff further addressed the management problems in issuing EA 91-067. Section VIII of EA 91-067 required SFC to provide further information "to determine whether the Commission can have reasonable assurance that in the future the Licensee will conduct its activities in accordance with the Commission's requirements" and information to determine if certair. managers "will carry out l
24 the responsibilities and authorities assigned to their respective key position descriptions outlined in the license."
4 The staff review of the independent management assessment and SFC's response was ongoing at the time EA 91-067 was issued; and at that time, the staff had not yet completed the analysis of SFC's November 20, 1990, response to EA 90-158. As noted in EA 91-067, neither the independent management assess-ment nor SFC's response directly addressed the root causes for the deficiencies in SFC's management. The management assessment report did identify goals for 1
strengthening management systems and supporting a high level of safety and compliance with regulatory requirements. To achieve these goals, the report made specific recommendations in the areas of communications, organization, training, policy, planning, management controls, human resources management, and regulatory relations. SFC responded to these recommendations by letters dated July 15 and November 7, 1991, agreeing to implement the majority of the recommendations. Nevertheless, the staff concluded that the independent manage-ment assessment report did not address the root cause of SFC's deficiencies and failed to clearly establish whether the recommended actions were sufficient to correct SFC's problems. (Inspection Report 91-17).
Because SFC's new President was dissatisfied with the 1991 SFC responses, in January 1992, SFC provid9d a revised program of objectives developed by the current management team to supplenent its 1991 responses to the management l
assessment. During the January 1992 team inspection, the SFC President informed the NRC staff that he believed the-corrective measures previously
25 planned by SFC failed to fully address the underlying weaknesses in the organization. In its January 3, 1992, letter, SFC identified what it believes to be the fundan. ental causes of SFC's problems. First, a strong nuclear safety and regulatory compliance culture had not been instilled throughout the SFC organization. Second, a disciplined / formal management process had not been implemented throughout the organization. To reach these conclusions, SFC relied upon an evaluation of the events that occurred during 1990 and 1991 and a review of contributing factors identified by two SFC consultants. As contributing factors, SFC identified the particular background and experience of SFC senior managers, weaknesses in organizational structure, insufficient sensitivity to radiological aspects of SFC's activities, and inadequate communications both internally and with the NRC.
, As part of the January 1992 team. inspection, the inspection team reviewed l
SFC's proposed programs for improving managerial effectiveness (as described in the January 3,1992, "Sequoyah Fuels Corporation Plan for Achieving and Maintaining High Performance Standards" or Plan) and SFC's evaluation of root causes of the deficiencies and programmatic weaknessos identified in the 1990 Demand and the 1991 Order. The Plan identifies eight objectives t;hich SFC believes are the principal elements of an effective mansgement process. Many of the recommendations from the independent management assessment are incorpor-ated into these objectives. These objectives are: (1) selection of qualified managers with demonstrated records of success; (2) establishment and communica-I tion of SFC's corporate mission, goals, and strategies; (3) establishment and communication of SFC management's policies and expectations; (4) improving 1
1
4 26 effectiveress of procedures; (5) provision of adequate staffing and effective training; (6) strengthening of programs for identification and correction of.
problems to prevent recurrence; (7) establishment and use of performance indicators to assess the effectiveness of performance; and (8) provision of feedback on performance to the SFC organization and individuals.
Although SFC el.6ned to implement some of the Plan objectives prior to any restart authorization (procedures and training requirements captured under the 1991 Order), the majority were viewed as long-term corrective measures to be implemented over the next 1 to 2 years. Some of the specific actions SFC has taken or plans to take to achieve these objectives include the following.
SFC has replaced all of the individuals specified in the Demand and has put in place a new management team. SFC has made organizational changes that will allow the Health and Safety Manager to focus on issues of industrial and radio-logical safety. SFC has also hired management consultants to assess SFC's improvements.
4 SFC is also developing a Business Plan to help institutionalize its plans
- and actions to assure strong nuclear safety and regulatory compliance. The Plan will have both annual and long-term objectives. Additionally, SFC has established a corporate policy that " employees will perform as nuclear professionals who are operating a nuclear facility." To communicate its expectations, SFC holds weekly meetings at various organization levels.
Approximately every four months, the SFC President plans to meet with all employees to communicate SFC standards and expectations. The President also
4 27 periodically issues written updates infor.ning employees of the plant status and discussing management expectations. The training prcgram now incorporates ,
references to management expectations. SFC is also implementing a Conduct of Operations Program. The objective of the program is to achieve a high level of performance and accountability throughout SFC's organization to assure that activities are conducted in a manner that protects the environment, the health and safety of workers, and the health and safety of the public. The scope of the program encompasses all aspects of operations and management systems. The program holds personnel accountable for their performance.
In September 1991, SFC implemented a Procedure Improvement Program to upgrade those operating procedures important to safe operation of the plant. The program was developed in response to NRC concerns regarding the adequacy of SFC's operating procedures. The program is a two-phase effort.
For the first phase, SFC listed 23 procedures that would be reviewed in the shnrt-term and serve as a pilot program. The second phase, a long-term project, will upgrade the remaining procedures. SFC continued the project after tt.e October 1991 Order was issued. By the time of the January 1992 team inspection, SFC had upgraded 20 of the 23 procedures in Phase I and was reviewing the other 3. The program is designed to develop consistent standards for format, style, and content; improve clarity; incorporate additional
. detailed instructions and guidance; incorporate cautions, warnings, and work .
l permit requirements; incorporate the need for special tools and equipment; correct errors; highlight important performance standards; and identify activities that should be governed by a procedure.
I i
28 In the-area of staffing, SFC has added several positions. The health physics staff has been increased to include a second health physics supervisor and a staff health physicist, as well as hiring consultants to assist with the program. SFC has added a waste management manager, a human resources manager, a QA engineer, and a licensing engineer, as well as consultants to assist with various programs. SFC also plar. to conduct an organizational functional evaluation to analyze staffing levels. Although the project is in the developmental stage, the human resources manager and the controller are to complete the evaluation of the health and safety, quality assurance, nuclear licensing, environment, and operations departments by June 1992.
SFC has provided training on contamination control to operations, maintenance, and health and safety personnel. Health and safety technicians have received 120 hours0.00139 days <br />0.0333 hours <br />1.984127e-4 weeks <br />4.566e-5 months <br /> of training on health physics principles and practices.
Training on industrial safety and hygiene is planned. Employees utilizing revised procedures have been trained on those revised procedures. SFC intends to implement a number of improvements to provide a more structured training
' program for all elements of the organization. SFC has reorganized its training department so all training activities will be conducted under the direction and supervision of the human resources department. As part of the January team l
inspection, the team reviewed the effectiveness of SFC's training for operators and health and safety technicians. The inspectors concluded that the workers appeared adequately trained on the revised procedures. The team also concluded that SFC's-training for its permanent health and safety technicians was thorough.
1 29 l
1 The staff has concluded that the responses and actions required by the 1990 Demand have'been satisfactorily addressed by SFC. Complete implementation ;
of the program would result in substantially improved management of licensed operations and satisfy the NRC's concerns. The inspection team found that although-a number of improvements had been implemented or were in the planning stages, SFC's proposed plan for improvement represents long-term corrective measures that will require future review to determine whether they are effectively implemented-and sustained. The inspection team did-identify the
- following three concerns that SFC had to address prior to a restart authorization.
First, the staff was concerned about the adequacy of the health and safety
-technician staffing. The concern was primarily focused on the number of permanent positions. -SFC has established 22 positions'of which 12 are staffed.
Contract technicians ' augment the staff and will .be phased out as permanent positions are filled by trained SFC employees. SFC has-also added a second health and safety supervisor position and hired a staff health physicist.
The second concern involves'the corrective measures taken to improve
' ~
- management's sensitivity to. regulatory concerns. -Specifically, the roaction to the identification of contaminated articles located in. unrestricted areas raised questions as to why SFC's staff failed to adhere to policies regarding
-:-internal notification to management, and failed to promptly control or
-restrict the area. SFC performed a root-cause analysis and determined that-b the root cause was_significant and-rapid changes in the work environment.
l_
Contributing-causes were inadequate job turnover and plans for surveys in ,
l s
l ii - . - -- , -
\
l .
30 unrestricted areas. SFC has since issued a new procedure on contamination control, and a temporary procedure was issued to provide guidance for actions to be take., when contamination is identified in unrestricted areas. For performing surveys in unrestricted areas, SFC has developed a plan that specifies the responsibilities of individuals, provides for prioritization, identifies applicable procedures and regulations, and establishes contamination trigger levels.
Tne third concern is the need for an additional level of oversight of licensed operations during development and implementation of long-term corrective pregrams. In its March 13, 1992, response, Src provided additional information regarding the interim management oversight measures. SFC is implementing a manager-on-shift program during restart and for at least 30 days after restart. SFC is utilizing senior experienced consultants prior to, during, and af ter restart to deal with ongoing maintenance and operations activities, root cause analysis, performance indicators, and regulatory compliance self-(
assessment. The Sequoyah Oversight Team will implement a restart program which focuses on critical procedures and activities. SFC senior management will conduct monthly inspections for at least 6 months. New procedures for deficiency reports a7d corrective action requests are being implemented so as to involve all SFC personnel. SFC has also adopted interdepartmental reviews prior to new activities, pre-startup checklists, revised procedures, frequent management visits to work areas, imorovements to the QA program, management meetings with the work force to reinforce goals and expectations, improved commitment j tracking systems annual external audits, and use of technology consultants.
i i
31 Section VI, Item 8, of EA 91-067 ordered SFC to perform an in-depth review of the administrative control and implementing procedures in the health and safety and environmental programs. Petitione infer that the submission of a plan to review procedures in the health & safety and environmental programs is all SFC must do prior to resumption of licensed activities. However, the plan required some implementation prior to resumption of licensed activities.
Implementation of the plan involves hiring outside individuals to review procedures to assure that instructions are clear, current, and technically adequate; revising the inadequate procedures; and providing training on the new and revised procedures. The plan itself just lists the procedures to be reviewed and provides justification for the timeframo for review, i.e., before or after restart. Moreover, NRC staff approval is required prior to restart, The staff concluded that SFC has satisfied the explicit requirements of Item B of Section VI of the Order. (Inspection Report 91-17).
Petitioners state that revamping procedures will not address the organi-zational and attitudinal problems discussed in EA 90-158 and EA 91-057.
It is correct that changes to procedures alone will not address these other issues. However, SFC has taken other steps, discussed above, to directly address these issues. SFC has in place new management in key positions, including the President. SFC has also hired additional staff in the areas of health physics, training, and regulatory affairs. SFC is implementing the management controls recommended in the indipendent management assessment, in the independent review of the August 1990 events, and in SFC's January 3, 1992 letter. SFC is implementing a manager-on-shift program to provide additional
e4 . - . .:
32.
t oversight to assure compliance. SFC has also-initiated a Conduct of Operations program-that is designed to' change.the cultural problems by making individual employees responsible for their actions.
The changes lbeing implemented.by.SFC appear to be effective. Workers have
-demonstrated the ability'to perform activities in accordance with the improved procedures. Additionally, workers have demonstrated sensitivity to SFC .
management expectations and standards for health physics practices and have initiated efforts to prevent and correct work practices which did not meet
-these standards. .The Petitioners have not presented any new information to ~
indicate that SFC will-not-be able to operate the-facility safely, c
- 2. Lack of independence by proposed consultants Petitioners request:that SFC be required to obtain a "truly" independent' .
audit-of itsfmanagement'and operations. Petitioners allege that SFC has Lobtainediseveral evaluations of its management-and operations by the same w
group of people, and:that'since .these . individuals 'have a:long-standing relationship with SFC.:their objectivity is compromised-because they have a
" vested interest'in affirming their previous conclusions. Petitioners' cite as examples the use of Dr. James.Buckham, PLG, Mr. Henry Morton, and Dr. B. John l
Garrick. '
~
-Petitioners object to the use of Dr. James Buckhas to conduct an' independent
- -critique of:SFC's response to the August 1990 event because of his-association-
=-=w =ve- , f - -
--r
33 4
with PLG. Dr. Buckham's conduct of the independent critique does not present reason for concern that the report might be biased. In fact, Dr. Buckham's review concluded that there were problems with SFC's response to the August 1990 avents, and he made recommendations for improvement in SFC's programs, including a recommendation for root cause analysis, changes in reporting of incidents, and improved communications. The Petitioner does not demonstrate that the report could be biased or why, but merely asserts that Dr. Buckham's association with -
PLG must severely taint the independence of his review.
Petitioners object to the use of PLG to provide the oversight required by EA 90-158 because PLG provided the oversight after the 1986 uranium hexafluoride cylinder rupture. SFC selected PLG to provide the oversight required by EA 90-158 partly because of the company's familiarity with the SFC facility. The NRC agreed to the use of PLG for the independant oversight. The oversight team was intended to provide additional assurance th t NRC regulatory requirements were being satisfied during operation of the facility while _
management deficiencies and weaknessas were being addressed. PLG only provided surveillance over SFC activities; PLG did not conduct any management studies as part of its oversight function. As part of the January 1992 team inspection, the NRC staff reviewed the oversight team's activities. The NRC staff concluded that although the oversight team may not have fully communicated its concerns in the daily and weekly reports, in general, the oversight team did fulfill the oversight role as described in the 1990 Demand.
~ _ _ . -
34 Petitioners question the use of Mr. Henry Morton to head the review of the health and safety and environmental programs.8 Petitioners assert that
-Mr. Morton participated in both PLG's 1986 post-accident revi~ew and the over-sight required by EA 90-158, and participated in the independent management assessment in 1991. Mr. Morton was a participant in the oversight provided after the 1986 accident. He was not, however, a participant in the 1991 over-sight by PLG. He was listed as a potential member for that oversicht team but in fact did not serve in that function. SFC proposed Morton and Potter to conduct the independent management appraisal required by EA 90-158. NP.C approval of Morton and Potter was contingent on Dr. Bernard Keys being a primary participant because of t,15 expertise in management and the need to include management issues in the appraisal. The management appraisal did not include a technical appraisal of the-health and safety and environmental programs.
However, in the December 18, 1990, lettar, SFC did state its int 9ntion to have Morton and Potter conduct a technical appraisal after completion of the manage-ment appraisal. Mr. Morton had already initiated the still pending technical appraisal before the October 3, 1991, Demand and Order.
Petitioners assert that Mr. Morton participated in reviews that reported approvingly of SFC's operations, and that these conclusions were later proven to be incorrect by SFC's mismanagement and environmental contamination.
6 NACE ' objected formally to the selection of Mr. Morton for the program review- Letter from Diane Curran, attorney for NACE, to Robert D. Martin, NRC (November _4, 1991). NRC concluded that Mr. Morton's participation in the PLG oversight after the 1986 accident did not disqualify him from conducting the program review. Letter from Robert D. Martin, NRC, to Diane Curran (November 27, 1991).
b- . . _ .
35 Petitioners assert that the independent management assessment, conducted by Morton and Potter, gave SFC a positive bill of health less than 5 months before the plant was ordered shut down. The May 15, 1991, management appraisal report, however, did not give SFC a clean bill of health. The report stated that SFC now has the organizational units in place that are needed to operate at a high level of compliance with NRC requirements. The report identified 15 goals for strengthening management systems and supporting a high level of safety and compliance with regulatory requirements. The report presented 47 recommendations to accomplish these goals. Areas needing improvement included policy, planning communications, organization, management controls, human resources management, training, and regulatory relations.
Petitioners object to SFC hiring Mr. Morton as the project manager ;
overseeing the program review in the health and safety and environmental 4 programs because Mr. Morton has an alleged vested interest in affirming his prior conclusions that SFC's operations are adequate. As explained above, the 1991 management appraisal did not conclude that there were no deficiencies in SFC operations or that thors deficiencies played no role in poor performance.
Petitioners-hhve not established that because of Mr. Morton's past association with SFC that Mr. Morton's review of the health and safety and environmental l programs would be biased. Moreover, Mr. Morton has a-highly qualified group of individuals working with him on the procedure review. All reviewers have been approved by the NRC staff. The NRC staff has_ evaluated the adequacy of the health and-safety and environmental reviews that were required to be completed prior to restart and concluded that those reviews satisfied EA 91-067.
i
(
-j
36 (Inspection Report 91-17). Further independent review beyond completing the proceudre review is not warranted. ,
Petitioners also disagree with the selection of Dr. B. John Garrick to head SFC's Readiness Review Committee. The Readiness Review Committee was chartered to review SFC's compliance with the Order and to advise SFC's President on the general readiness of the facility to commence operations.
The Committee was not required by EA 91-067 but represented an additional i action that SFC took to provide assurance that the facility was ready for restart.
Petitioners assert that unless SFC obtains an independent assessment of its operations and management, the company will not cure those deficiencies.
In fact. SFC obtained independent reviews of its programs as required by EA 90-158 and EA 31-067. The staff was satisfied that those reviews were adequate to allow restart, and concluded that, with the exception of continued oversight by the independent oversight team, additional independent reviews are unnecessary. Petitioners have not-provided any information which changes that conclusion. Accordingly, Petitioners' request for further independent assessments of operations and management is denied.
l 1
37 D. Petitioners Request that SFC Be Held to Its Commitment to Operate Safely by Completino All Changes to Management and Operations Before Restart Petitioners request that all changes to management and procedures necessary to assure safe operation of the facility be completed prior to restart. The staff agreed and, before authorizing restart, determined that such necessary changes had been completed. Petitioners cite SFC's quality assurance (QA) program and performance as an example of SFC's past failure to keep its commitments. Specifically, SFC was cited for failure to audit its preventive maintenance and maintenance surveillance programs. (Inspection Report 91-04).
As indicated in Inspection Reports 91-04 and 91-16, the staff is concerned about SFC's QA program, which is why QA procedures were added to the procedure review effort required by the Order. SFC's QA program previously consisted of periodic reviews of operating activities, to determine procedural adherence, that were conducted by a full-time employee assigned to complete the audits and corresponding reports. Program weaknesses included insufficient staffing and the limited scope of the program in that it did not include functional areas other than operations. Audits were compliance-oriented with respect to procedures, rather than programmatic reviews, and failed to evaluate activities not governed by procedures. SFC identified the need for program improvements, including the following:
(1) enhancement of the QA engineer's qualifications to that of an American National Institute of Standards certified Lead Auditor and increasing the QA I
l
t 38 staffing with personnel having disciplines in the areas routinely audited, SFC also~ intends to train the QA engineer and other staff members in root -
cause analysis methodology; '
i (2) evaluation of QA programs at other facilities to determine standards which may be useful at !?C and use of this experience to revise the QA program; (3) development of clear definition for QA-identified items to facilitate identification of those audit items of greatest importance; and (4) revision of the-existing QA procedures'to include programmatic audits; establish qualifications of QA auditors; define audit methodology and the issuance, tracking,' closing, and trending of audit items; and clarify the use ,
of contracted auditors in the QA program.
SFC1also intends to include the QA program in annual audit's performed by
- . General' Atomics, SFC's parent corporation.- In order.to improve the p
l identification of' operations lacking formal procedures, missed procedure L
deficiencies, and conditions not authorized in the license, SFC developed and implemented additional audit criteria and guidance for procedural audits and L; weekly..Lfacility walkthrough -inspections performed by the QA engineer.
i:
I:
The staff has-reviewed SFC's QA plans and the-interim measures to be taken while-the QA program is being revised.- The interim measures are acceptable.
lT lA final: determination on the QA program will not occur until after SFC has
-completely implemented the revised program.
~
39 Petitioners allege that SFC has repeatedly contaminated the site and put workers at unnecessary risk and that the site has become grossly polluted with uranium and other chemicals. While SFC has exhibited poor contamination control practices'in the past, which resulted in the environmental contamination problems of today, SFC is currently taking satisfactory actions to prevent further contamination. SFC has taken or has planned actions to further minimize the source of contamination (i.e. , the sump / floor inspection program and relocation of the laundry) and has initiated actions to remedy existing contamination (i.e., recovery wells and trenches, removal and consolidation of soil, and pond 2 remediation). Additionally, although some workers have been contaminated, records indicate that no overexposures have occurred. SFC has addressed the need to include contract workers in the bioassay program.
Before authorizing restart, the staff evaluated the July 1991 FEI report and other-data and concluded that' existing contamination was not so extensive or so great that it should prevent restart. Nonetheless, environmental contamination associated with SFC operations is an issue related to license renewal. The staff's authorization of restart was made without prejudice to resolution of environmental issues in the pending license renewal proceeding.
Petitioners are a party to that proceeding and have set forth areas of concern regarding environmental contamination-to be addressed in that proceeding.
In summary, SFC completed all pre-restart reviews-and is continuing the reviews designated for after restart, as required by EA 91-067, and has.put an acceptable management in place, as well as the necessary management controls to assure safe operation. SFC not only satisfied EA 91-067 but went
40 beyond what was required. SFC removed certain individuals, hired additional staff, implemented a readiness review committee, implemented the conduct of operations, and continued the procedure performance improvement program.
The staff concludes that SFC identified the fundamental cause of its previous management weaknesses. SFC is implementing its plan to correct the problems at the facility. Upon completion, SFC should have in place the programs necessary to assure that high performance standards are achieved and maintained.
The staff has determined that there is reasonable assurance that SFC can operate tne plant in accordance with regulations and its license. The Petitioners have not-presented any new information that was not considered before authorizing SFC's restart or which demonstrates that SFC cannot operate the facility safely.
Accordingly, the staff concluded that all char.ges necessary before SFC could resume operations had in fact been made, and thus restart was authorized by letter dated April 16, 1992.
E. Request for Federal Register Notice The Petitioners have also requestad that if and when restart is permitted, the Commission direct the staff to provide notice in the Federal Register of all proposed amendments to the SFC license. Their request is based on the absence of ready means by which petitioners and members of the public may be informed of such matters. There is no legal requirement to give notice of a materials licensing action. Kerr-McGee Corp. (West Chicago Pare Earths Facility), CLI-82-2, 15 NRC 232, 245 (1982), aff'd sub nom. City of West Chicago v NRC, 701 F.2d 632 (7th Cir. 1983). Moreover, as a matter of
i
.41 l I
l long-standing practice, the NRC does not notice by publication in the Federal Register the approximately 5,000~ materials licensing actions it considers each year,-unless the subject of the amendment is considered significant. See, Statement of Consideration, " Informal Hearing Procedures for Materials Licensing Adjudications." 54 Fed. Reg. 8269 (February 28, 1989). Petitioners have presented no reason to change.this long-standing practice with respect to any future.SFC license amendment applications. Should the staff conclude that any SFC license amendment application is significant, a notice will be i
j published in the Federal Register. See,'10 C.F.R. S 2.105(a)(9). In any event, the NRC places all amendment requests, as well as other correspondence, in-both the.Public Document Room and the Local Public Document Room (LPOR).
The LPOR is11ocated at the Stanley Tubbs Memorial Library, 101 E. Cherokee Street, Sallisaw, Oklahoma. Interested members of the public, therefore, have a ready means of learning about license amendments. In light of the ongoing l
i proceeding in connection with the license renewal, however, the staff does agree to notice all license amensnent applications, regardless of significance, inethe' Federal Register until the staff takes final action on SFC's license renewal application.
IV. CONCLUSION The institution of proceedings-pursuant to 10 C.F.R. S 2.202 is appropriate only where substantial health and safety issues have been raised. See, Consolidated Edison Company of New York (Indian-Point Units 1, 2, and 3),
= CLI-75-8, 2 NRC-173, 175-176 (1975); Washington Public Power Supply System
42 (WPPSS Nuclear Project No. 2), DD-84-7, 19 NRC 89L, 923 (1984). This is the standard that I have applied to determine whethe the action requested by Petitioners, or additional enforcement action, is warranted..
For the reasons discussed above, there is no basis for taking the actions requested by the Petitioners. The staff carefully reviewed its enforcement actions and concluded that they were adequate to address SFC's deficiencies. -
The health and safety concerns regarding contamination at the SFC site raised by the Petitioners have either been resolved through prior enforcement actions or will be addressed in the pending license renewal proceeding. No substantial health and safety concern warranting action has been raised by the Petitioners.
Accordingly, the Petitioners' specific requests pursuant to 10 C.F.R. S 2.206 for license revocation, for a formal adjudicatory hearing before restart of SFC operations, and for. additional independent management and program reviews are denied. Although the Petitioners' request for revocation because of alleged material false :tatements in the August 29, 1990, renewal application
'is denied, a Notice of Violation will be issued citing SFC for providing inaccurate and incomplete information in violation of 10 C.F.R. S 40.9. In addition, the Petition is granted insofar as the staff agrees to publish in the Federal Register notice of all SFC license amendment applications until the staff takes final action on the renewal application. As provided by 10 C.F.R. 5 2.206 (c), a copy of this Decision will be filed with the Secretary of the Commission for the Commission's review. The Decision will become the final
43 action of the Commission twenty-five (25) days after issuance unless the Comission.on its own motion institutes review of the Decision within that time.
Dated at Rockville, Maryland, this T day of 1992. -
FOR THE NUCLEAR REGULATORY COMMISSION A .-
Robert M. Bernero, Director Office of Nuclear Material Safety and Safeguards
43 action of the Commission twenty-five (25) days after issuane.o unless the Commission on its own motion institutes review of the Decision within that time.
Dated at Rockville, Maryland, this 8 b day of ,)u ~ 1992. -
s FOR THE NUCLEAR REGULATORY COMIS$10N I l
Originalsigned by Roberi M. Bernero Robert H. Bertsero, Director !
Office of Nuclear Material Safety .
and Safeguards t
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. DATE:5/14/92r 5/ 8/92: :5/15/92: 5/)d/92:
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NAME: JGr ves: RCunningham:- tYo: RBernero:
DATEiS/19/92: 5/ /9 :- 5 /2//92: S A M S2: g/4'/92:
OFFICIAL RECORD C0h
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7590-01 00-92-03 U.S. NUCLEAR REGl'LATORY COMMISSION 00Ct,ET NO. 40-8027 SEQUOYAH FUELS CORPORATI0h' CORE, OKLAHOMA, FACILITY 1
ISSUANCE OF_ DIRECTOR'S DECISION UtlDER 10 C.F.R. 9 P.206 Notice is hereby given that the Director, Office of Nuclear Material Safety and Safeguards, has issued a decision concerning a Petition dated November 27, 1991, submit,ted by Native Ame. ;ans for a Clean Environment and the Cherokee Nation regarding Sequoyah Fuels Corporation's (SFC's) Gore, Oklahoma, f acility.
. By Memorandum dated December 9,1991, the Comission referred the Petition to the staff for consideration pursuant to 10 C.F.R. I 2.206. The Petition requested that the U.S. Nuclear Regulatory Comission revoke Sequoyah Fuels Corporation's operating license for the Sequoyah facility.
The Director of the Office of Nuclear Material Safety and Safeguards has determined to deny the Petition, except insofar as a Notice of Violation will be issued citing SFC for violating 10 C.F.R i 40.9, and has decided te grant the Petition insofar as the staff will publish, in the Federal Register, notice of all SFC's license amendment applications until the staff takes final
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action on the license renewal applicatien. The reasons for this Decision are explained in a " Director's Decision Under 10 C.F.R. I 2.206' (00-92-03 ), which is available for public inspection in the Comission's Public Document Room I
located at 2120 L Street, NW, Washington, DC 20$55, and the Local Public !
Document Room, Stanley Tubbs Memorial Library,101 E. Cherokee Street, Sallisaw, Oklahoma.
A copy of this Decision will be filed with the Secretary for the Comission's review in accordance with 10 C.F.R. I 2.206. As provided by this regulation, the Decision will constitute the final action of the Comission 25 days after -
the date of issuance of the Decision unless the Comission on its own motion institutes a review of the Decision within that time.
Dated at Rockville, Maryland, this fd day of ... c 1992.
FOR THE NUCLEAR REGULATORY COMMIS$10N Robert M. Bernero, Director Office of Nuclear Material Safety and Safeguards l
. _ . - .. .-. --.