ML20138F408

From kanterella
Jump to navigation Jump to search
Transcript of Commission 851210 Meeting in Washington,Dc Re Review of Enforcement Policy.Pp 1-92
ML20138F408
Person / Time
Issue date: 12/10/1985
From:
NRC COMMISSION (OCM)
To:
References
FRN-52FR7432, REF-10CFR9.7 AC45-1-38, NACEP, NUDOCS 8512160086
Download: ML20138F408 (96)


Text

~

ORIGINAL

, UNITED STATES OF AMERICA

( NUCLEAR REGULATORY COMMISSION In the matter of:

COMMISSION MEETING Review of Enforcement Policy ,

(Public Meeting)

Docket No.

Location Washington, D. C.

Pages 1 - 92 Date: Tuesday, December 10, 1985 AliN RILEY & ASSOCIATES Court Reporters

('- 1625 I St., N.W.

Suite 921 Washington, D.C. 20006 9512160056 851210 (202) 293-3950 PDR 10CFR PT9.7 PDR .

_ _ _ _ _ _ _ _ _ _ . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ____ _ _ _ g

4

  • 1 D 1 SCL4 1 M ER 2

3 4

5 6 Thes is an unofficial transcript of a meeting of the 7 United States Nuclear Regu l a t ory Ccom i s s i on held on 8 in the Commiesion's office at 1717 H Street, 12/10/85 .

9 N . tJ . , (Ja s h i ng t on , D.C. The meeting was open to public 10 attendance and observation. This transcript has not been 11 reviewed, corrected, or edited, and it may contain 12 inaccuracies.

13 The transcript is intended solely for general 14 informational purposes. As provided by 10 CFR 9.103, it is 15 not part of the formal or informal record of doc 6sion of the I t5 matters discussed. Expressions of cpinion in t h i .: t ran scr i p t 17 do not necessarily reflect final determination or beliefs. No le pleading or other paper may be filed with the Commission in 19 any proceeding as the result of or addressed to any statement 20 or argument contained herein, except as the Cemmission may 21 authorire.

22 23 24 25

1 1 UNITED STATES OF AMERICA 2 NUCLEAR REGULATORY COMMISSION 3 ***

4 EEVIEW OF ENFORCEMENT POLICY s www o PUBLIC MEETING 7 ***

8 Nuclear Regulatory Commission 9 Hoom 1130 to 1717 H Street, Northwest 11 Washington, D.C.

12 1 '3 Tuesday, December 10, 1985 14 13 The Commission met in open session, pursuant to lo notice, at 2:37 p,m., the Honorable NUNZIO J PALLADINO, 17 Chairman of the Commission, presiding.

16 COMMISSIONEWS PHESENT:

19 NUNZIO J. PALLADINO, Chairman of the Commission 2U THOMAS M. HOUEHTS, Member of the Commission 21 JAMES K. ASSELSTINE, Member of the Commission 22 FHEDENICK M. HEHNTHAL, Member of the Commtaston 2 'J LAfiUO W. ZECH, JH., Member of the Commission 24 25

  • e
  • 2 1 ETAFF AND PRESENTERS SEATED AT THE CCMMISSICN TA3Ld: i i

2 S. CHILK i

3 H. PLAINE 4 C. DIVER  ;

i I 5 J. HENDRIE j e H.L. eARx!S 7

V i

9 j 10 j 11 12 i

13 f 14 6

i.  ;

15 a,

16 I

I 17 I i t IO i

I i t l

i

20 i l

. 21 f L i .

22 -

I l 4

23 1 i'

t

'4 2 -

l 24 L r

4 I I J

o

  • 3 1 Y R O C E E D I N G S 2 CHAIRMAN PALLADINO. Good atternoon, ladies and 3 gentlemen.

4 Commissioner Zech has been detained, but his ottice 5 r e c omrae n d e d that we start without him. He'll be joining us o shortly.

? We meet this atternoon to receive an overview and 8 discuss the report from the advisory c c tco i t t e e for review ot 9 our enforcement policy. The committee was established by the 10 NkC in August of 1984. The purpose of the ccmmittee was to 11 obtain independent advice and r e c omrae nd a t i o n s concerning NHC 12 enforcement policy and practice.

l 'J The committee, on November 23rd, 1995, submitted its 14 report to the Commission, including a number of 15 recommendations. I understand that the report is publicly to available in the back of the room.

17 The committee was made up of the following to individuals. E.P. Wilkinson is chairman. Colin Diver, Michael 19 V. Hasten. Joe Hendrie a r.d Hal L. Parris, 20 I understand that Dennis Wilkinson could not make 21 himselt available for today's presentation, nevertheless we 22 are happy to have the other representativea here and on behalt 23 of the Commission -- what's that?

24 COMM!dSIONEH ABUELSTINE, it looks like Mike Hasten 25 didn't make it either, or hasn't yet anyway.

e

  • t 4

i 1 CHAIMMAN PALLADINO: He hasn't arrived

  • Is he l

l 2 ccmingY 3 MH. PAHHIS: The last report we had, sir, he had 4 problems with tog that had his plane grounded. He will get in S later.

6 CHAIRMAN PALLADINO. That's one of the problems we

? can't solve. But nevertheless, on behall of the Commission.

O let me welcome you today.

9 COMMISSIONEH UEHNTHAL: There aren t many, but there 10 are a low 11 CHA!HMAN PALLADINO: 't h a t

  • 4 right 1J CLaughter.J 13 CHA!HMAN PALLADINO-. We look forward to a discussion 14 of the important views and r e c onane no s t k o n a of the committee.

15 I understand that Hegions II, IV and V are listening l

l 16 in by telephone, but the arrangement is such that they can't l

17 talk to us. I don't know !! that's by plan or otroumstance.

19 Are there any other opening remarks other l

19 Commissioners would like to makeV i 20 It not, then let me turn the meeting over to l

! 21 Dr. Hendrie.

2 ;l MH. HENDHIE: Thank you, Mr, Chairman.

l 2 *J Mr. Diver and Mr. Parris and I are pleased to be J4 here to present this report to you. You may recall that you J4 tounded us a year and some months ago, at the end of August in 1

e

  • 5 1 64, in tact. It has taken somewhat longer than both you anc l

! 2 we thought it was going to take and we're sorry about that l

l 3 We do appreciate the willingness of the C onua t s s i on to extend 4 our time et operatton in order to get the reoort tinished.

I 3 !*m glad we have completed at this potnt. I notice a certain 1

6 testiness in the latest response trom the Ottice of Personnel 7 Management in extencing the advisory committee's time. And I 6 suspect we might not have been able to go around again.

9 There were some questions which were broached to us 10 in the initial charge for the committee by Mr Dircks in his 11 letters contirming the committee. And we believe inat those 12 are answered in the report, not directly but all of them are 13 covered by the items (nat the report lists.

14 We would Itke to note the great help and essential 15 assistance of Karen Cyr, of the Executive Legal Utrector's to ottice, of Jane Axelrod, the Director of Entorcement in the 17 Ottice ot inspection and Entorcement, Jim Lieberman, Jim 19 Taylor and his people have been very helptut.

19 LCommissioner Zech entered the room.)

l l 20 We've had excellent cooperation throughout from the J1 Statt and a good deal of the credit here it due to the people 22 wno worked closely with us. We've had a number of meetings.

.: 'J We puhltshed a Feder41 Hegtater not1ce asking for wr1tten 24 comments on the enforcement polioy. We've heard from 40 l

l 21 witnesses, studies the written comments, studied the i l

e

  • O t

1 conalderably larger volume of backgrounJ uaterial supplied by 2 the Statt, which haa included pubitc comment on eniorcement  ;

} <

1 3 policy matters from other -- in response to other requests at  !

T l 4 the Commission and the Statt, 5 The bulk oi the testimony that we*ve heatd and most 6 of the people we have heard from have been associated with the 7 power reactor tield, so that the bulk of our conclustons deal 4

. B with that aspect of the enforcement ponicy.

1 1

9 Let me note .. what I plan to do is to thumb briefly 10 through the report, noting itoms whioh I think are warth 11 calling to your attention trum the report, ano I need hardly i

12 invite Commissioners to ask questions and raise lasues as I go I

j l 'J along. You will anyway, so ti ! inutto you itrst, it sounds ii l 14 as though it's all right with me.

i l 15 CLaughter.3 j 10 MM. HLNDHIE; It's not, but I can't do anything l

l 17 about it, so --

I j

l 18 LLaughter,1 .

I' i l 19 As you might expect, we detected a certain dittering i 2

i I

i

20 perception among the various parties involved in the i i '

21 enforcement program. The regulators see it one way. Hy and )

i

{

j 22 1arge, they think it's protLy good atuti The regunated t l

\

i 1

J 'J aren't what I'd call very tond of it And the crities put a 24 plague on the house of both the regulatora and the regulated, t i 25 In order to provide a background of rational basis

7 I to our examination of the enforcement policy, we stopped a n .1 2 retlected on the philosophical basis of entorcement The a

3 purpose of NHC requirements is certainly to maintain and 4 enhance the safety of operations, it seems to us very much to 3 the licensees advantage to comply and that, in tact, compliance o clearly is the norm. Therefore, the area in which e n f o r c erae n t 7 operates and the use of enforcement sanctions is contemplated 6 is not a large area, in tact 9 The imposition of sanctions, we think, could be used 10 to serve any one of three purposes 11 Netribution. We think that is inappropriate for a 12 civilian endeavor of the nature of nuclear technology, l 'J Incapacitation. That*s certainly an enforcement 14 sanction which can be used, but only very selectively and to a 1,

15 limited degree in the nuclear field for a couple at pretty to good reasons.

17 . The first is that the degree at non-conformance that 18 would necessitate licensee removal -- license removal -- just 19 doesn't occur very otten. The people that the Commission 20 regulates are institutions that are, by and large, capable, 21 responsible, trying to do a good job, and so on. Utillties, J2 hospitals, and so on. They all have strong interests in JJ protecting their reputation and their professional standing 24 and quality of work.

25 Secondly, removal of a license might deny a fairly  !

. . ~- ._. _ _ - - _ - -

e 6

i signatteant conmocity trou pubite use, etootricity or medical l

' services or whatever, I,

3 So incapacitation ought to be reserved for the rare i 4 pathological case of really bad conditions.

5 The third thing that you use sanctions for, in an i

o enforcement policy, is deterrence. And that's the place that

? it becomes interesting and in which the main action is The l

j d sanctions serve a deterrent function by increasing the 9 perceived cost from the standpoint of the licensees of 1

10 non-compliance with requirements, t,

11 And the significant point that we would like to make 12 to you is that it is the threat of the sanction and not the j 13 actual imposition that achieves the deterrence. Alter all, 1

l 14 atter he*s already non-complied, you can't deter him anymore, i

)

15 It*s too late for that dut by swatting him, you can make I

to oredible your threat of sanction for the next guy, 17 That deterrent has some ettests in terms of how te seriously you take some arguments that it doesn't make any 19 sense to levy a penalty, because in practically all cases, by 20 the time you get the penalty levied, the lleensee has cleaned 21 the situation up or is well on the way to cleaning it up. So

, 22 what's the point in inning him? Well, the point is that you J3 have to maintain the credibility of your deterrent sanctions.

< 24 And in order to do that, even though he is cleaned up, you may 25 have to go ahead with the sanction, in order that the next i

o

  • 1 tellow knows that there is going to be a problem 11 he doesn't '

r 2 behave.

3 The importance of deterrents, to a degree, depends l 4 on what the other incentives in the field are for compliance.

5 And we think in the nuclear regulatory area, the other [

I o incentives to comply, to not have accidents, not have incidents <

7 ci non-compttance, prevent property damage, human etiocts, and U so on, are very pressing and powerful In fact, compared to 9 those existing, potential costs, the regulatory sanctions may 10 be viewed as having comparatively little impact.

11 Nevertheless, we think they are an important part of 12 it.

Il There are a number of implications of the deterrents 14 perspective that are of signtitcance. Among them are the tact 15 that you need to watch out that you're not fining people for to conduct which is essentially uncontrollable by the agency that 17 you're fining. It the institution that you're inning simply IB couldn*t avoided the non-compliance, then it isn't very 19 helptul, in a deterrent sense, to go ahead and penantse them.

20 Similarly, penalties for harmless violations aren't 21 very helpful in terms of the credibility.

22 There are a number of aspects which are listed in 2 'J the report, in the section on the philosophy of enforcement J4 that I think merit your attention. IJ u l I think, in order to 23 move this discussion forward, I'd like to move on to the t

10 1 conntttee's evaluation of the current NHC enforcement program, 2 which comes in two parts.

4 3 The first part has to do with performance, and the 4 second part has to do with how the program is designed, S We*ve had the present enforcement policy for going o on live years. And we made an attempt to see whether there 7 were objective measures, as to whether it had had a perceivable B deterrent ettect, obulously, in terms at reduonng the number of 9 non-compliances, of serious non-compliances.

! 10 And what we have to report is that there's blessed 11 little objective evidence that it has. There tan't any 12 evidence that it hasn't, you understand, there is just a lack 13 of evidence, of clear evidence, that it has. And what there 14 is there are some indications, but it's not very strong 15 We attempted to do some statisttos and there are l 10 some tables in the report which summarise our ottorts in that l

l 17 direotton. We tried to s u p p l e rp e n t the statistics on overall 18 enforcement activits by looking at more detailed data on l 'J ontorcement historie. of a selection of eleven plants. We l JU don't claim that this is a scientifloally random sample, but 21 it is geographically distributed, vertous kinds of machines, 1

22 various geographical areas, and various levels of perceived 2 'J compliance behavior.

I 24 And a number of things were looked at under Golin

! J1 Diver's direotton. We made whatever we could of it, and it

11 I comes out along the tollowing lines it suggests very strongly 2 that the vast majority -- well, it's quite clear that the vast 3 majority of citations are at levels 4 and 5 and that there are t

4 no civil penalties or escalated actions involved. More 3 important, it suggests that the relatively larger otvil l I

o penalties seem to have a more tavorable etlect on the target's r 1

1 7 subsequent behavior than the small penalties. It*s not an 9 unarguable situation, statistically, we hasten to tell you, but 9 that seems to be the thrust. e 10 CHAIMMAN PALLADINO: You lumped reactors and others j 11 in one common set of statistics, did you nott What I'm 12 thinking of when you say small penalties, for a university or i

13 4 hospital, the $10,000 penalty might be quite signittoant but 14 to a reactor operator that might not, l 15 MH. HENUNIE: That'a quite true, Mr. Chatrman, but ,

i 10 the latter comment that we were making, that the larger i 17 pensattes seem to -- lloonsees lined larger amounts, their 19 subsequent behavior seems to be, insofar as we can develop l 1

19 performance measures, seems to be better in a compliance sense

]

20 than lleensees -- and those are for power reactors, 21 specittoally. This is the result of the eleven reactor set, p

j 22 CHAINMAN 18ALLADINO; How did you measure the 2 'l deterrent etlect, just by not seeing so many later? I 4

24 Mit . HENUN!E. If you look at page 18, table o, is 1

c 25 the orttical table. There are several measures whtoh were L

.. . - _ - - .. _ _ . _ - . - . . - . . .. . -. - _~

12 1 looked at, which were considered to be possible measures of i

2 regulatory behavior. The number of violations in the year --

l 3 this is all measured in the year after the imposition at a j 4 penalty, either a large penalty or a small penalty. The l

l 5 number of violatkons, the weighted value of the violation --

l I

! 6 that is, weighted by the severity level of the violation. And l 7 then the weighted value of number plus the weighting. The i

e violations per inspection hour, the number of LENS, number of 9 torced outages, number of hours of torced outages and so on.

10 And to the extent that these particular measures 11 have some degree of validity at a measure of performance, then 12 indeed performance in the year after a penalty seems better it l

l 13 the penalty is a large one -- is more clearly better than it I

14 it was a small one.

15 Now as I say, let us not attach to this linding, 10 great and fundamental truth until the Statt has had a chance 17 to enlarge the sample and think about the measures, the to attributes that you*d like to study, and so on. But trom what 19 the committee *s been able to do, with its ilmited time and j

20 resources, there is an Indioatlon that the tenor and to the 1

21 extent that this is, in fact, valid it does back up your 22 deelston of a year-odd ago to de-emphasise the small civil 2 'J penalties. That seems to be supported l

l 24 COM.418 8 t ONEW ASSELWTINh; Joe, trom the people that i

i l J4 had addressed the committee, did you get a sense -- apart from l

y <

.  ?

r l '3 1 the statistical evaluation [ihat you did --

that eitnet on a 2 more qualitative basis or ev n an anecdotal basis, the sense 3 trem licensees that when particularly a [arge penalty was

~

.. J 4 imposed --

I would say gven above the 550,000 level you talk 5 about here, the (ery majpr en f o r c eme rtt action $ -- that that 6

brought about a heightened s e D 4 0[*j t . a w a r e n e s s , o c'ami t me n t trom 7 senior management that illtered down to result i t; better 9 performance, at least for a period _ot time?

9 MR. HENDRIE: I can r$ port -- I' don't know that the

,- r 10 committee's to#rmed a consensus _ judgment, but for myselt it 11 seems to me to be clear that that is the thrust of testimony, 12 that people havs siid a number of times-- that on the occasions

~

1J of tairly signit1 cant sanctions, that there is a gathering of a

14 forces at t h s' i t nes d Lnstitution and a "l o r o { tough meetings

+

15 about how did we got ourseIvoe in th8s aituation and what are to we going to do to clean at up, and so on.

. /

17 do thatels 1 think t h's answer, trom my vie / ot the 16 proceedings, is the answer is yes, ther6 is'that-teeling, ,

19 I m'ust also report to you, in a sort,ot semi-parallet 20 veln, that ii vou ask people, in general' , w ho her they think

[

the enforcement policy -- as its b e e n ' veto n t n g since.1990 21 -- i. a s 22 had any really significant safety benefit in terms at hatter ,

i ,

J 'J operation and so on, you get a lot of'maxed answers. A' tot of 24 people don't think so. There are./ some who think it p r rj b a b l y ,

as has, aithougn i naven t h..res anybody mak. i o tid -- c.rtainiy-on s .,

r i

_ . _ -= . _ - _ . . . _ .-__s-m > _ _ ._..__m-_ -_, -

14 1 the industry side --

make loud declarations in favor of it 2 But there are mixed impressions out there about the overall

! i 3 ettect of the poltoy, j 4 COMMISSIONER HOBERTS: Let me ask a question which I l I 5 --

I'm afraid I know the answer. You had a limited amount at I;

o time and virtually no resources. Did you look, at all, in any 7 way, on the enforcement policies of other regulatory bodies 4

i 8 and maybe there are no clear parallels, I mean certainly you ;

9 couldn*t look at the FCC or something like that, but what  ;

4  !

10 about the SEC' t i

11 FAA.

j COMMISSIONER ASSELSTINE:

12 COMMISSIONEW ROBEHTS: FAA.  !

{ 13 MH. HENDWIE: Yes, we talked to people from a number "

f

14 of r.egulatory agencies. EPA, FAA -- gee, help me out.

f 15 MM. DIVEM: Mine Safety. f a

J

10 MW. HENDHIE
Mine Safety -- anybody we could get t i i

} 17 our hands on. And our staff was very good about digging out '

16 folks to come and talk to us. l i

j 19 COMMISSIONEN HOWEMTS: Do you have any general 1

i j 20 impression of how we compare with other regulatory bodies in

,o 1

21 the iteld of enforcement?

j 22 MM, HENDMIE: Again, 1*11 have to speak for mysell 23 and then let me ask Colin and Jack to comment, because this is  !

1 s t l 24 not something the committee has a position on and I don't want  !

I 25 you to interpret my remarks as the committee's remarks.  !

4 i I' 1

., .,~ - _ . _

r.

I 15

[

1 My feeling is ihattafter t hearing about 't n e j I

2 enforcement programs'that s'o m e of these other semi-parallel l 1

f a t l

3 agencies and taking this look at the one that the Commission

[

4 has, I think this one is a pretty good program. 1 think there f

' i t

5 are some things in it that need fixing, and we re going to  ;

6 , talk about those in a few minutes. But I think that in, basic {

ti 7-  : structure, it held up very well on a comdarative basis. i s j l

8 But let me ask Colin and Jack to comment on that.  ;

L

. 5

.1 9 Just is a highly personal matter of impression from what -

10 you*ve heard and read.  ;

i 11 ME. DIVER: Well, my information derives not only ]

i 12 from the information gathered by the committee but also the  ;

  • $ s 4  ;

}.

/

13 fact that I have made something of a cottage industry of  !

14 studying regulatory enforcement,as san academic. '

And in the i 15 process.1 have looked pretty closely of the regulatory i

16 enforcement programs of the FAA, the Coast Guard, the Highway '

i

, 17 A'dministration, t'he Railroad Administration, OSHA, the, Surface f i

i 18 Mining Ottice, Mine Safety, FCC, ICC, EPA and now the Nuclear  ;

i 19 Regulatory Commission, and perhaps others that I haven *t c j

  • ... n 20 thought of. - ,

~,

)

21 P

Let me say,'first of all, every agency *s enforcement

[

). Y ~

j 22- program is distinct because _their mission is distinct. Making .!

l 23 comparisons between them would be very difficult. I can say 24 that probably of all t.h e agencies I*ve mention &d, the one what I

,,s t 25 comes closest to NHC*s, in terms of the nature of the mission, {

l

(

16 1

is the FAA because airline safety is another area in which you

' t .,

2 ,

want to come as close to :ero failure as you possibly can.

8 3 But even there, it seems to me, there are significant 4 d111erences.

U 5 There are things that stand out when you look at the 6 Nuclear Regulatory Commission's enforcement program. First 7 all, the intensity of surveillance. None of the agencies, 8 that I've mentioned, has such a strong presence within the 9 regulated industry, at least to the extent we're talking about 10 nuclear reactors. Mine Safety would come close, PAA might 11 come close. But in most of these other programs, as in your 12 own materials licensing program, the enforcement program is

13 characterized by episodic surveillance, inspection of a w

14 licensee or a regulated party once every year, or two or three 15 years.

16 CHAIRMAN PALLADINO: How about the Maritime 17 Commission -- or maybe it's the Coast Guard?

18 MR. DIVER: I didn't study the Maritime Commission.

19 Sorry, I can't answer that.

20 CHAIRMAN PALLADINO: How about the Coast Guard?

21 Don't they make inspections of ships?

22 MM. DIVEN: They do. They make inspections of ships 23 --

not as regularly, certainly, as you make inspections of 24 reactors.

25 So that there's a very intense, close surveillance 1

, _ - . . _ _ - _ _ - _ _ _ _ _ - - , - _ , - - ,- , . - .. - - _~, .- . - - . . ..

+

17  ;

l 1 in this program, much more so than in any of the other programs 3 that I've studies. That means, among other things, that 1 l

3 assume there is a great. deal more casual give and take between 4 the regulator and the regulated. There is a co-existence of

$ sorts. It means that perhaps a large number of potential 6 violations are headed off or minor violations are corrected

? without being formally cited.

B And therefore, an important part of your regulatory 4 9 enforcement program is what goes on at the plant level, at the i.

] 10 regional level. It*s a very ditticult part of the operation 11 for anyone, either at the center of the agency, much less an 12 ad hoc commission like us, to get a real grip on it.

13 To the extent that one looks at the formal part of 14 the enforcement process, particularly the escalated actions, 15 what you see here is a relatively small number oi civil 16 penalties compared to many of these agencies, but relatively 17 large penalties -- at the high end, at least.

18 This agency levies among the highest penalties of 19 any of the agencies that I*ve mentioned, pernaps the highest.

20 Many of these other agencies, such as Mine Safety and OSHA, 21 issue larger numbers of smaller penalties and that is partly

22 because their statutes seem to require that, and partly 23 because of the different nature of the safety problems that 24 they encounter.

25 But my feeling was, looking at the mission that the l

l

- , - - , , , , - -- -. - , - - - -e, . . ,-- , , , . . , - , . ,e. .,,..--n.-. n., , .

i .

18 1 regulatory program that this agencies tries to carry out, that 2 its enforcement program seems to be pretty well designed for i 3 that program. That is, it's a program in which there is a

4 very high level of close surveillance, a credible threat of 1

5 very severe penalties but very rarely used, or relatively 6 rarely used, and reserv,ed -- I think --

for those situations

? in which the most serious safety significant violations have 8 been detected.

9 MR. FARRIS: I think it's very important to emphasize 10 a point that Mr. Diver made, that the differences are -- to 11 scme degree -- a function of differences of missions. But one 12 thing that seems pretty self-evident is that there is less 13 negativism from these other' agencies than is associated --

14 which Dr. Hendrie will address later. That's one of our 15 recommendations, about handling the publicity releases.

16 Another issue that we address later on is the 17 deficiency, as we perceive'it, on the part of the NRC to 18 accumulate a data base from which good root cause analyses can 19 be derived. And the FAA -- and I'm sure I'm not telling you 20 something you already know --

but they have a voluntary i

4 21 reporting system that is essentially non-punitive in nature.

! 22 And the data are submitted to NASA and they, in turn hired 23 Battelle to do the analysis of it.

24 How there is one, again, difference of mission.

25 There are a lot more incidents in the FAA, because of the

.~ . . _ _ . - . . - . .. - .

s 19

-1 trequency and number of flights, versus the number of reactor 2 operators in operation.

3 But 11 I may, let me direct your attention to the 4 last paragraph, on page 36, in regard to publicity. And I 5 quote from the report, "The individual enforcement cases may 6 he publicized only when such publicity wi'.1 significantly i serve the goals of the enforcement policy, and only in a 8 manner that will reasonably protect an alleged violator's 9 right to due process and fair treatment."

10 And as I said later we will address, one of our 11 subsequent recommendations deals -- for your consideration --

12 with what we perceive as a more palatable, more acceptable 13 way, to ha'ndle the publicity releases.

14 We were also a little bit surprised, to some degree, l

15 that the FAA had not only investigated the regulatory agencies 16 within the United States, but had looked at their counterparts 17 overseas and they said, well, they didn't do that because of 18 cultural ditterences. Now obviously, there are cultural 19 ditterences, but you don"t have to adapt a program from France 20 to Japan in toto, you can adapt it to fit your needs.

21 And finally, the NHC --

to their credit -- with our 22 urging they did do a survey. They got responses from a number 23 of signatories and one thing that did come out of that, there 24 was an expression of some surprise at their perception of the 25 adversarial relationship or nature of our enforcement policy

-. .- . .-. ._ . _ _ = - - - .- . - - _ _

, - ~ . . . . .

l

+

20 l

, 1 versus theirs.  ;

2 Those countries seem to be more characterized by the 3 regulators and the regulated working together to promote a

.i 1

4 nuclear power as a common interest and a common goal 5 And those are the significant differences that I

~

6 see.

7 MR. DIVER: 11 I may, I would like to say something

, 8 in return to that. Jack Parris and I have learned to disagree 9 amiably during the last year that we have worked together. On j 10 many occasions. And I would like to amiably disagree with 11 him.

12 I don't, on the basis of my experience, I don't feel 13 comfortable saying that the relationship between the regulated 14 industry and this regulatory agency is any worse than Ln many "

15 of these other agencies that I've looked at. I would like to

] 16 say first --

17 COMMISSIONER ROBERTS: You do not think t h a t 's 18 MR. DIVER: I do not think that is true. It may be i

19 true in the case of some regulatory agencies and some of their i

20 industries,'but certainly I don't consider it accurate to say 21 that it*s considerably worse than on the average in other 22 regulatory settings. I think one has to keep in mind that the i

i 23 relationship between regulator and regulated is an inherently 1

24 conflict driven and ditticult relationship.

25 Also, it'is quite correct, I think, to say that we

i 21 i 1 should Icok at otner cultures. To the extent that stuales f

2 have been d orie of other cultures in these other regulatory i 3 settings, people have found in= 2ame thing. Tnat is, that in I 4 other countries the relationships are usually much more i, )

O ecllegial and cooperative between government regu1atory 1

4 o agencies and the regulated firms. It's not unique that tnat

]

7 is so in the nuclear industry. .,

I f 8 I know studies, for example, of occupational safety 9 and health regulation in European countries such as' Sweden and l'

j 10 Germany which say the same thing, that ours is adversarial and i

. 11 theirs is cooperative.

)

12 So there may be cultural differences, but I don't 13 think that I would subscribe to a statement that said the

14 relationship is more punitive or more adversarial in this  !

15 agency than it is in many of these other agencies. And I have 16 talked to people both in industry and in the other parts of l 17 government who will say exactly the same things about other 18 regulatory agencies as I heard time and time again as a member 19 of this committee, sitting across-the table from industry i

20 representatives.

21 COMMISSIONER ZECH: So you're saying in our country 22 they are comparable?

I

3 MR. DIVEM: I think our country tends -- in our 1 24 country, regulatory relationships tend to be more adversarial 25 than in other societies, yes.

v , p ,m ---,,e.m-w-- .~.,-.w.p ,+e - g- , - - ym-,, ,

g - n yp,~--w, mg,r mm x g--m m-,,,mu_ ,g,, ,,m-,,,

)

22 l

1 CCMMISSIONER ZECH: Hight.

2 COMMISSIONEN BERNTHAL; You don't suppose tnat's an 3 outgrowth of the unique American legal tradition that tends to 4 be more a d v i r e,a r i a l ?

4 5 MR. DIVER: I suspect it's partly that. It's partly o the greater distrust of government perhaps, and more of the 7 Strength of the public-private distinction in this society, 8 the cleavage between what government and what industry does is 9 supposedly much greater. There's less of a tradition of -

l 10 cooperation between government and industry, and I think it 11 reflects itselt in rather ditticult regulatory relationships, i

12 COMMISSIONER BERNTHAL: It I could get back, ior a 13 moment, to the question that -- it we're through on this 14 particular subject, I wanted to ask the opinion of the panel 15 and there may come a better time to discuss it, but we've 16 talked about small versus large penalties here.

17 And one of the things -- one of the ideas that I*ve 18 toyed with for the better part of two years and I can't 19 remember whether it ever found any support in the Commission 20 or any where else, for that matter, that I keep coming back to 21 and wondering about, whe*her we should not pursue it more 22 vigorousi/, is the idea of a point system on penalties and

, 23 fines.

24 Much of what, it seems to me, lies between the lines 1

l 25 of what you're writing here a r. the inettectiveness of small 1

l l

.- - - .- -- ,- h -m. -- ,%- % .m - --e.-

23 I tines versus large fines seems to point to that kind of 2 system. If you Icok at how, on a driver's license for example 3 the system works, you don't lose your driver's license when you ,

4 4 commit --

run maybe red light or committed one speeding 5 violation, but it you have a repeated record of violation, then 6 the inclination is to pull your driver's lic nse or levy a l 7 severe fine, in other words.

t 8 Is there any thought that that kind of approach 9 might be useful here, that --

I should make one other comment.

10 It strikes me that -- I guess I can't comment in detail on the 11 particular case, because it's before us right now, but I noted 12 a case recently where the Commission has had proposed a rather 13 large civil penalty. And 11 you really look carefully,

, 14 basically what we've done is what I've often wondered whother i

i l 15 we should make a matter of policy. We've accumulated a long l

16 list ot_ grievances, in a sense, a long list of violations --

i 17 they happen to be thrown all into one pile, And there is a 18 major, very large fine now beings proposed.

19 Now that*s the kind o1 actton and iine that, it 20 seems to me, will get the attention of boards of directors and 21 really does act as a deterrent. I have always telt that these 22 540,000 and 550,000 fines are simply inettective and 23 disproportionate in every sense of the word with the large 24 utility particularly. Do yoe have any comment on that? Did 25 you think about that kind of possibility?

. . . _ . .. . _ . . -. . - - . _ . . ~ . - _ _-. - .._ .__ - - . - - _ _ . - - - -- >

t 24 1 MR. HENDRIE: Aa I --

it I understand you correctly, 2 you'd say look, instead of tining people s20,000 at a partially 3 mitigated level 3, you'd say now look here, that was a bad 1

4 thing to do and you get three black stars. And if you get to a

$ seven or something like that, why it's going to cost you a 6 quarter of a million dollars and we're going to want to 1 1 7 talk to the president about why you got seven black stars, j

i l 8 That kind of process?

I  :

I' t 9 COMMISSIONER BERNTHAL: Hight.

10 MR. HENDRIE
It seems to me that that would, to i

I 11 some degree, you have a system like that now functioning  ;

q 12 implicitly. People get white stars for good performance and 3 j 13 they implicitly cancel out black stars for bad performance.

14 And somebody who has accumulated a lot of white stars and then 15 trips, you know, is more than likely to come ott either 16 without a penalty or with a considerably reduced one.

t 17 And clearly, there is some kind of implicit point 18 system, plus and minus, at work here.

i 19 On the other hand, as you say, from time to time 20 you*11 find a place where there have been several things or i

l 21 maybe this is now the third 520,000 severity level 3 being 22 contemplated for the same thing and we say confound it, what i

j 23 do we have to do - to get these people *s attention? Escalate.

24 And it's sort of an implicit point system.

25 Now I think the essence of what you're saying is why

?

. . - , . . , - _ -. - - . - _ - - _ _ . - - _ _ , ~ . - - _ , . . _ _ _ . _ ~ . . . . _ , , _ . . . . . - - . . . , _ , . .

d 25 1 don *t we make explicit and tormalize what is already largely 2 the way we do business?

3 COMMISSIONER BERNTHAL: I have to say I'm a little s

4 bit surprised and concerned at the implication that broadly 5 speaking there is an implicit point system at work here where I 6 merits cancel demerits. That would imply that we do not have l 7 an even-handed enforcement policy. That 11 your plant trips I

8 because you have screwed up somewhere in operating the plant '

i 9 and violated the regulations in operating it, because you*ve 1

10 run the plant well for two years, we don't issue a penalty.

11 And I hope that's not true.

12 It it is true --

13 MR. HENDRIE: I think without question it is true.

14 COMMISSIONER ASSELSTINE: It's explicit, j 15 MR. HENDRIE: Everything I've heard for a year and 16 some months, and everything that I know about enforcement from i

! 17 the years'before that says that --

18 COMMISSIONER ZECH: Good performance over a period 19 of time is considered, as I understand it.

1 8

20 MR. HENDRIE: --

that fact is precisely --

21 CHAIRMAN PALLADINO: That*s the basis for mitigation.

]

22 COMMISSIONER ASSELSTINE: We even modified the <

l 23 policy statement within the past year or so to make it clear 24 that 11 you have a history of good performance in that area-25 and you stumble once, then you can have 100 percent

2e l 1

1 mitigation. The whole line can be wiped out 2 COMMISSIONER BEENTHAL: You're talkang about 3 mitigation, Jim. I'm talking about --

j 4 COMMISSIONER ASSELSTINE: Yes.

l 5 CHAIRMAN PALLADINO: Well, that's --

0 COMMISSIONER BERNTHAL: Hold on a minute.

? CHAIRMAN PALLADINO: All right, go ahead.

l 8 COMMISSIONER BERNTHAL: You*re talking about I

9 mitigation. I'm talking about citiag a violation with a  !

10 possible enforcement action, c

11 MR. HENDRIE
No, I'm talking about penalty levee, 12 civil penalty levoeing when I talk about the white stars i

13 offs ** ting the black stars' implicitly in the system now.

j 14 COMMISSIONER ASSELSTINE. You still get the notice t

i 16 of violation.

10 MR. HENDRIE: You still get the notice of violation.

1 17 COMMISSIONER ASSELSTINE: But no fine.

I 18 MR. HENDRIE: And it says, you know, you done bad 19 and here's why, and that was terrible, and don't do that 20 again. But then it says, but on the other hand you've done 21 well, and we're mitigating on the following grounds. .

l l

22 COMMISSIONER ASSELSTINE
Right. j 23 MR. PARRIS: Interwoven in the fabric of the report, 24 we are talking about mitigation, and Commissioner Asselstine f

2S is ecrrect that there are official policies now that do allow

. - .- _ . - - - . .~. - - - --. . . - - - . - . _ _ . _ - _

27 1 mitigation for prompt reporting anc corrective action.

2 We alss adoress our emphasis on prevention, and 3 trying to prevent these things from happening. And to 4 contribute to that possibility we talk about better enforcement 5 policies and management conferences -- enforcement conferences a

i 6 and management conferences.

7 We also talk about the SALP report Examine the 8 SALP report even though there is an element of subjectivity in i

l 9 it, you can get some insights it used learnedly as to how a 10 plant is being run over the longer time. And as a reward for 11 that, you would inspect those plants that are doing a good job l i

12 less frequently than the plants that are not doing --

i l 13 COMMISSIONER BERNTHAL: Well, sure but --

i 14 MR. PARRIS: They're all parts of this. l l

15 COMMISSIONER BERNTHAL: Unless you mitigate to zero, i

16 11 you mitigate to a small fine instead of a large one you*re a

F 17 still back in the very same trap, it seems to me, of leveeing l

18 small fines. And I simply have never felt -- and I don't 19 think that the panel here feels, judging trom wnat you've 20 written --

that that by and large has been a worthwhile 21 enterprise, enforcement enterprise for the Commission.

22 COMMISSIONER ASSELSTINE: Except they did raise the 23 -- they did address the issue of whether we should get rid of i 24 the small lines altogether, of the level three. And they said 25 no, they think that's a mistake.

_ _ . . _ . _ _ , . . _ _ , , ~ . . . . . , , , _ _ _ _ , , _ _ _

. . .. . .. .. - - - _ _ . . __-_ - -.. - _ __ _ _ __ - - -. ~ ..-. . - . ._. -

1 28 f

1 I should say on mitigation, that doesn*t apply to 2 severity level one violations under the present policy. .

3 MR. PARRIS: We gave you some flexibility that there 4 were circumstances that were dictate where that flexibility

  • 5 would be highly advantageous.

O COMMISSIONER ASSELSTINE: And it*s a way of bringing i

7 to people *s attention violations that are s'ignificant, but l 8 before they get to the very severe situation.

i  ;

9 CHAIRMAN PALLADINO: But I think --

t 4

10 MR. HENDRIE: Colin, do you want to comment --

11 CHAIRMAN PALLADINO: But I think Commissioner l

12 Bernthal is raising a point that has more than passing 13 interest, at least in my view. And that is that you can i 14 accumulate a lot of small violations and then you get a  ;

4 15 sizable fine as a result. And that's ditterent from tine 1

l 16 mitigation. And I don *t know whother the committee looked at  !

4 17 that or not. '

18 MR. DIVER: 11 I may make a couple of statements 19 about this.

20 MR. HENDRIE: Yes, please, Colin.  !

a 21 MR. DIVER: We have talked about the mitigation for l 22 good past performance history. Of course, there*s also i

23 escalation or aggravation for bad prior performance history.

a 24 And that is a way in which you can have to pay for an 25 accumulation of smaller violations in the past, i

. , . _ _ _ _ __._ _ . .. .. _ _ . _ _ _ . . _ . _ _ . ~ _ _ _ _ _ _ _ . ,

._ _ ._ ._- _ . . - . _ _ _ _ . _ _ . . m-_. . _ _ _ _ - _ . _ _ . ~ . _ ~ . . - _ . _ _ . _ .

4 i .

i 29 i Howe"er, your proposal wouto gc beyond that in this

, i 2 sense, in order under the present system to be penali:ed at l

3 all you have to have at least a serious violation, or perhaps 4 a group of level tours that form a pattern that can be 5 aggregated together and treated as it they were one serious i s violation.

l 4 7 And what you are suggesting is perhaps to go beyond I

8 that and say, even for a long list of very small violations, l

{ 9 without any one of them rising to the level of being a level

{ t 10 one, two or three, you ought to be subject to p u n i s hr.te n t . And i

11 I must contess that we did not as a group specifically address 12 that proposal so far as I can recall, 2

13 MR. PARRIS: No, not in that exact context.

j 14 MM. DIVER: I have a couple of responses as an

)

15 individual. One, is that one of the problems with doing that 4 to now is that the existing entorcement policy permits 17 non-citation of certain minor violations that are detected and i

1 18 corrected by the licensee. '

19 What that means is that some of those minor 20 violations that occur never really, I guess, find their way 1

! 21 into the system. At least above the level perhaps of the l 22 inspector or the regional office.

f I

23 MR. HENDRIE: Just an inspection report. Or maybe  ;

r 1

24 not even that.

25 MR. DIVER: So it may be ditticult to aggregate  ;

i

-. .. . . - ~ - - -

1 30 1 those it they aren't finding their way into the s y s t e ra , unless e

2 you change that policy and teed them into the system. But it 3 you do that, of course, you're undermining the incentive that 4 that policy gives for self-detection and self-reporting.

5 So there is another consideration at work in that 6 policy wnich to some extent cuts against what you're proposing.

7 COMMISSIONER HERNTHAL: Well, set the threshold 8 wherever you like. But, you know, the principle, it seems to 9 me, is worth considering. The threshold is clearly too low 11 to you started to write down things that normally now we never 11 bother with writing down.

12 MR. DIVER: Yes, you could start with what is now 13 cited as a tour and live and give some credit or debit for 14 each one.

15 MR. HENDRIE: Or even, you could start with what is 16 now the threshold for an escalated enforcement action, and 17 i.e., a civil penalty in practically all cases, a civil 18 penalty of some kind.

19 MR. DIVER: But that's only 7 or 8 percent of the 20 violations that are even written up.

21 COMMISSIONER ASSELSTINE: That's a very small-22 number.

23 MR. DIVER: One other point. And that is, while 04 this may well be a sound idea in theory, it is ditticult --

25 and I think other agencies that have tried to establish a

31 1 parking ticket type system, or point system have found it 2 ditticult to, in fact, apply such a system.

3 [ Commissioner Zech lett the room.]

4 MM. DIVER: It may be worth looking at the experience 5 of the Occupational Safety and Health Administration and the b Mine Safety and Health Administration, both of which have gone 7 about as far as any agencies that I know of on a large basis to B establish a tormula for pricing out even out the minor 9 violations. They have -- I think both have the experience that 10 it tends to involve a very large number of highly discretionary 11 and rather arbitrary decisions as to what value to place upon 12 these minor violations.

13 And I think you'll tind that in both agencies 14 they've tended to get away from that system and to reduce the 15 number of cases in which they bring civil penalty actions, and to increase the average civil penalties that they bring precisely 17 because they have ditticulty in pricing violations.

18 It's one thing to apply this approach to say the 19 administration of a parking ordinance in a city where there's 20 only seven different types of violations and you can establish 21 a price range, it you will, for those violations. But as I 22 understand it, in this agency 11 you consider a violation of 23 each of the tech specs as an independent type of violation, 24 there may be in the vicinity of tens at thousands of different, 25 specific regulatory or tech spec requirements that could be

, . - . - . ~ . - . . _ _ . - . - _ _ - - . . - _ . - . . . . . - - . - . . . . . - . . _ - - . . _ . -

G 3

{ 32 1

j 1 violated.

L 2 COMMISSIONEN BEMNTHAL; I think you're placing too  ;

3 much emphasis though on the principle. You're placing too l 4 much emphasis on the minor violation. Make the threshold l l j 3 whatever you like.

6 In fact, the Commission could, for example, decide 4

1

7 we aren't going to issue fines any more -- pick a number --

, 9 for under 5230,000. But we are going to establish a system so l i .

9 that we will identity in a more objective way than from what  !

1 I 10 l'm hearing is currently done --

11 [ Commissioner 2ech re-entered the r o o m . 'J 1

1 l 12 COMMISSIONER BERNTHAL; I mean, the other side of

{

i l 13 this coin of discretion and leniency with good performers and 4

i j 14 what-not is that the hazard is non-uniformity. And that's the i

) 15 price you pay. It may be better that way, I don't know. But

' l to you could still run it very much like you do today, but simply I

\

17 as a matter of policy say that when the pattern shows, that i

18 given the Commission's current policy, 11 you will, we would 19 have imposed fines of whatever, whatever and whatever. But it i

20 is not our policy to fine for under a specified amount.

I

21 But when the pattern of performance shows that you l

22 simply have had a bad operation and have accumulated a large 23 checking deficit, if you will, then it*s time to do something i 24 about it.

25 Well, I think I've talked long enough.

{

33 i CHAIRMAN PALLADih0. Let me make a suggestion- 1 l

2 think you raise a very important pctnt, and I don't mean we 3 should drop it. But I think for the moment it might be better 4 11 we go on to other points and make sure we try to cover as 5 mucn of the report as we can.

6 COMMISSIONER ASSELSTINE: Sure.

7 MR. HENDRIB: Okay, let me resume then, Mr. Chaarman.

8 CHAIRMAN PALLADINO: Yes, sir.

9 MM. HENDRIE. I said, in terms of our evaluation of 10 the present enforcement program, we looked at it from two 11 standpoints, performance and design. We've talked about the l

12 performance.

1? We've also talked essentially about the design. And 14 the conclusion of the ccmmittee is that, by and large, the 1$ design of the present policy pretty well satisfies the sort of 16 criteria that we think are appropriate for the entercement i

17 program at the Commission.

la Let's turn then to some specific aspects of the i

19 program. Issues that were raised by the committee, by 20 commenters, by witnesses, or from whatever source, and what 21 the committee's view of these things is.

22 The first one of these is the material talse 23 statement. It's a well known subject at this table. It needs 24 no particular explanation. The essence of the problem, of 25 course, is that people who have made errors in information

__ -__ _.____._.__.____.,m .-_. _ .__ _. _ _ _ _ __ _.______ _ _ _ _ - - _ . . _ . . . _ _ .

34 1 that they give to the agency, for whatever reason, find it 2 very unpleasant to be called, in effect, liars. And to 3 sustain the wide perception in the public in which they have

]

1

4 to live and serve that they have deliberately committed fraud

, 5 with malicious intent, and are evil people.

O And that is the, I would say, head, shoulders ano 7 navel, the outstanding bogey in the enforcement program, and j 6 the outstanding source of serious irritation and upset in the i

l 9 regulated community.

10 COMMISSIGNER BERNTHAL: I hope you're going to tell i

11 that to the Congress at some point, Mr. Hendrie.

12 MR. HENDRIE: Well, the Commission has constructed 13 -- Commissioner, the Commission over the years has constructed i ,

14 its own material false statement cage. And it is within the '

15 Commission *s power to march smartly out of it and cure the

, 16 problem.

I 17 COMMISSIONER ROBERTS: I couldn't agree with you i

! 18 more.

}

< 19 MR. HENDRIE: As a matter of tact, I have some [

20 regret that your deliberations on this subject, apart from the 4

21 committee's presence, that you chose to, in effect, put your 22 deliberations on hold until you heard what we had to say on 23 i t .,

And then it"s taken us a long time to be ready to say 24 it. I think in some ways we, in fact, have been a delaying j 25 factor.

f ,

j

35 1 But hopefully now that we re managing to celiver our 2 report you'll be able to move forward and do something. I 3 think this is clearly the item which we feel is the central 4 one that you ought to act on. And we have some clear, definite 5 recommendations and some reasons for recommendations.

6 But as I've looked at your deliberations in the 7 various papers that have been prepared and passed back and 8 torth, it seems to me that in all of those, whatever their 9 particular thrusts and tine points, that all of them deal with 10 that central hard point. People who hadn't meant to lie to 11 you and wnc are not evil people trying to do mischief and 12 defraud the government don't like to be accused of that and 13 subjected to the train of possibility penalties and 14 prosecutions.

15 So I think that, you know, the enterprises that you 16 have underway, while I wouldn't bless what I've seen as the 17 last paper to be presented to the Commission in detail, the 18 guts of the matter you're covering. So we urge action.

19 Now what we think is that you ought to limit the 20 material false statement itation to written statements made 21 with intent to deceive. Or, of course, with you know, really 21 egregious disregard of the facts, and juct -- careless 23 disr$ gard, I believe, is the customary nomenclature.

24 For misinformation -- and God knows, there inevitably 25 is a lot of that. People just don't get things right.

. . ._.__. __. _ . . _ _ _ - _ _ _ _ _ _ . _ _ _ _ _ _ _ . _ _ _ _ _ _ _ , _ _ . _ _ _ . _ _ ._m 4

! o 1

30 1  !

j 1 I've watched among my own oltents in the power t i 2 reactor field where, you know, we found out something was i i I j 3 different than we thought it was and told the Commission it i 1  !

t

4 was. So we went back and said, gee, we're sorry about that  ;

I j $ and we've had this program and we've gone in and looked at all i

] 6 of the rest of this kind of thing, whatever it was, and we're j 7 really sure we now are reporting the correct information.  !

l J

1 8 Sure enough, three months later, why some smart guy

  • j 9 discovers that, by God, here another whole set of fire barriers 1

J 10 that we hadn't realized were tire barriers and, you know, what i

i j 11 they sent 90 days ago was incorrect.

1 j 12 Well, 11 things like that, in tact, incorrect i

13 information, in tact, rises to level where you feel it 14 necessary to crack people's' knuckles and say, confound it, be i

13 more careful, that's line. But call it incorrect information I l 16 or something like that.

17 COMMISSIONER ASSELSTINE: Failure to report.

i 18 MM. HENDRIE: Yes, don't call people liars when they i

l 19 didn't mean to lie.

l j 20 Okay, now we think it ought to be written because ,

l 21 there is a lot of oral communication at the plants, day by day 7

22 at all levels of people. Written communications from the I

'23 licensee to the Commission have a certain dignity and place in i

I

24 the hierarchy. They're drafted and they're signed by people 25 at some reasonable management level,-and are more than just I l i

. ._ - . _ ~ - _ . . ___ _ __ - .. _ _ _ . _ . _ _ _ _ _ _ _ - _ _ _ _ . _ ._. ,_

37 1 the casual and inpromptu outpourings of a single person at any 1

1 2 level j

.i l 4

3 So written communications have a place and a certain j i . ,

4 level of review to them, whereas, oral communications can be f I

$ trem anybody from the plant manager down to the folks cleaning e out the -- cleaning the floor. And to leave your licensees in t

7 a situation where they have no way of controlling that oral I 1  ;

l i

8 exchange, no way of assuring that what Joe the operator is 1 9 saying to the junior resident in the hall outside the control i

I 4

10 room is in fact something that they --

that the licensee wants

.i i

11 to represent his position, and of being liable for this I
12 citation seems to me to be putting too much of a burden.

13 And what I think happens then is, that over time I

14 licensee managements will clamp down on the information flow.

1$ And more and more the people --

your people out in the plants 16 will find plant people unwilling to talk to them and saying, 17 well, you better talk to the plant manager, or at least the 1

4 18 shift supervisor. I couldn't --

I wouldn't want to answer 19 that, you know. All he asked was, is battery bank B on the 4

20 charger. Well, I don *t want to tell you that. As the shift

[ 21 supervisor.

j 22 It seems to me that there is a limiting of i

i 23 communications which is very unfortunate for the agency's  ;

l 24 mission.

I j 25 CHAIRMAN PALLADINO: But, Joe, could I just discuss

_ _ _ _ _ _ _ . . , . _ . . _ _ _ _ . . . _ _ _ _ - . . . . _ _, _ _ _ . _ _ _ , . _ _ . _ _ . _ . _ _ _ _ ~ . _ _ , _ _ _ , _ . _ _ , _ _ _

._. - _. ._~ .. . _ ~ - . - . . . - - _ _ - - . . . .._ _.. . _ . _ - - . .- .

  • i I

38 )

1 it further?

il 2 MR. HENDRIE: Yes. .

1 3 CHAIRMAN PALLADINO: I agree there are oral j

4 situations where there may be misinformation transmitted. But i

5 we do depend oral communication in a number of circumstances, 6 some very important. And it*s not clear to me why an oral 7 statement that is made, knowing that it*s false, or with utter j 9 or careless disregard of the truth, why is that not a material l i 9 talse statement? It*s oral.

10 COMMISSIONER ASSELSTINE: Why shouldn*t it be -

11 treated the same way?

i d

i 12 CHAIRMAN PALLADINO: Yes, why shouldn*t it be ,

i q l 'J treated --

1 Just wanted to draw you out a little bit, i

I 14 Because it*s not clear to me that it a CEO comes here and 15 says, by golly, everybody in here has got a college education, i

le and it turns -- and he knows that they don *t, and persists in

! 17 saying it, and we depend on it. ,

J i 18 My example is not a very good one, but the tact that i

j 19 it was made, knowing that it was false, I think, it*s open to I i l 20 question why that shouldn't be a material talso statement.

21 MR. HEMDRIE
Find a way then to define it so that 22 the people who are --

23 CHAIRMAN PALLADINO; .Now, first to get to the 24 principle,-I agree there are questions on how you define it, i

25 COMMISSIONER ASSELSTINE A knowing oral material

-- - _ - - . -._x.-.. - . . ,,. . , - .

?

4 3

39 L i 1 talso statement. .

i' 2 MR. HENDRIE: Yes, but by whom?

3 COMMISSIONER ASSELSTINE: You tell us something --

4 MR. HENDRIE: By whom?

l 1

1 5 COMMISSIONER ASSELSTINE: By anyone in the i l

3 6 organization.  !

l' l j 7 MR. HENDRIE: Listen, you've got people out in the l e

4 i (

4 9 3,000 odd employees of the Nuclear Regulatory Commission wno I L

l 9 are saying things about the agency's work which are untrue and i

1 10 they know are untrue.

i 11 COMMISSIONER ROBERTS: And they say it all the time i i

12 in the chair you're sitting in.  ;

I

! 13 MR. HENDRIE: And you wouldn't like -- you gentlemen

{ 14 would not like --

1 15 COMh!SSIONER HOBERTS: That's a tact.

  • I 16 i i MR. HENDRIE: -- to be charged with attempting to

! I j 17 defraud whoever it is they said those things to.

i 18 COMMISSIONER ASSELSTINE: That may be true, but 11 19 we --

1 20 COMMISSIONER ROBERTS: It is true.

21 COMMISSIONER ASSELSTINE: -- go up to the Hill and l

22 we sit at the table, and we tell somebody information that i 23 isn't true, and certainly i t we do it knowing that it isn't i

i 24 true, we're going to be held accountable for that And 4

1 i

25 rightly so.

4

,m,m-,.v...a,-,m.--, ,-

,-n.. - - , ..-., .n.n, - . . - . - ~ , . ---a-~,. ,wr,,m.n ~ , - , , , . _ , , ~ , , n ,,no-,,m _ ,

i l

. 40 1 1 MR. HENURIE: Okay. But 11 you then want to anc ude 1

2 oral statements as capable of citation as material talse

)

3 statements with all of the heavy burden that that brings, then 4 please find a way to define the people who, in your licensee 5 organisations, who ought to carry the burden of being capable 6 of making material talso statements. And some indication of d

7, the circumstances in which they have to be aware that they 1

j B carry that liability.

{

{ 9 Clearly, when you go to the Hill as commissioners, 10 11 you lie to the Congress you're in deep trouble.

1

)

11 CHA!2 MAN PALLADINO: Or even it a member of our i

l 12 statt lies to --

1 4

l 13 COMMISSIONER ASSELSTINE: That's right. But you're j

1 14 right, Joe, you do have to exercise some discretion.

i 2

15 MR. HENDRIE: But just to -- but to have anybody on 16 the licensee's whole stati capable of saying something to 1

2 17 any one of your people and then finding -- and then the 18 licensee finding himself tacing material falso statement 19 citation, oh boy.

20 COMMISSIONER ASSELSTINE: But why can't that be i

21 handled by using discretion in how you apply the sanction?

l i 22 For example, it one of our inspectors goes to the individual i

i 23 within a utility's organization who is responsible for carrying 1

24 out a certain function, environmental qualitication of t

25 electrical equipment. And he asks that individual, where 1

s- ,.> ,

- r.

e

,~ ,

1 s f '~ ,, , e, g . . ,

  • 1 1

t e - . . 41

! n . . p* -

1 do you stand on environmental q u a l i 1' i c a l i c[n . And the , # 5

, e 2 incividual says, we're done. And he knows at'The time that s .

3 they*re not. That there are serious jIr o b l e m t . , That '1r' dy [r e

, , .y y -

4 not in compliance. They're not e v'a rs . c l o s e I N

4

l. 5 In that kind of instance, it seems to de, they ought ,

f f 6 to be held accountable, and the licensee ought eto be cited for [

k

~  !

7 a knowing material falso statement, even

_..,- though .the statement I 8 was oral '

4 + -

l' e >

9 That's very ditterent from going to a 'c'r 4 t t working-

]

10 who happens to be working on a piece of equipment and saying,

] ,

J ,/

f 11 you know, where do you[stan&'on environmental qualitication et

, .y' 4 4 l 12 electrical equipment. #i' hat Andividual isn't responsible for j 13 that He isn't expected io know. s And it.coesn*t matter so 14 much what that individual says.

{ , ,

15 But I thi,nk those kinds of,.,l'hings ought,to be, and

) 16 can be handled as a discretionary matter ,in hnw you apply the j f -

! 17 sanction.

18 MR. HEMDRIE: "We11, I -- *', - ,.

,, )

i ,. .

! 19 MR. DIVER: Can I try it} , '

r i 20 MR. HENDRIE: Yes, go ahead, Colin, e -

+: s i 21 MR. DIVER: Let me try f o . a,'n s we r this because this q

e f

. 22 is --

the position you're suggesting is the position I took .

t

?

  • i

/

4

  • 3

. initially when this dratt was cirqulated" --

4

, 24 COMMISSIONER ASSELSTI!jE: "See,"you were right.

i <

25 ME, DIVER: My vote was purchased at the price of i s e E d g i

,4 i .

g;

42 1 some ot my integrity perhaps. I won't tell you wnat I got in 2 return.

l

-3 [ Laughter.]

l i

4 MR. HENDRIE: Eut you had lots of integrity to -- '

i 5 MR. DIVER: That's right. I had an abundance of 6 integrity after working on this project and nothing much else.

I

? [ Laughter.J 6 COMMISSIONER ASSELSTINE: That's another flaw in the r

l 9 system.

5 10 MR. DIVEM: My feeling is that one cannot defend the 11 proposition that the person making an oral -- intentional oral i .

12 misstatement should not be severely punished. I mean, of l 13 course that person should be severely punished.

i f

14 COMMISSIONER ASSELSTINE: Certainly.

15 MR. DIVER: The question then comes down to whether "

i 16 we should use the label material talse statement as the hook i 17 to hang that person on, or this other category that we would

18 call misstatements, miscom.uunications, whatever it i s.

I

! 19 Frankly, I have been somewhat puzzled at the 11ap i

4 20 about the whole material false' statement controversy, because i

i 21 in my view it is largely --

22 COMMISSIONER ASSELSTINE: Form over substance.

1 ,

23 MR. DIVEM: Yes, a dispute about symbols and about 24 semantics.

4

! 25 i

i

_v . - - - - . - - . c .,.-.,ye p.v_ ,,s.w-. ng -..w. sm . ...,%p.8 ,--w9 4e.w... e%,mr,, -m.+-. a.

43 1 COMMISSICNER HOSERTS: But inose symbols are very 2 significant.

3 MR. DIVER: But they are. And I'm'getting around to 1

s, s.

4 why I changed my position, Commissioner Roberts. s 5 The symbols $re enormously potent, obvIbusly because i

6 of the real conviction _with which we heard that message over 7 and over and over again.

r And the reason I guess the symbol is 8 so important is because tNis is the agency *s functional 9 equivalent of calling somebody a liar.

10 And also because of certain institutional, procedural 11 factors. That is, when a violation is arguably a material V

12 talse statement it is' handled differently within t h e' agency.

13 It is investigated by OI,'I guess.

r 14 '

MM. HENDRIE: The Justice Department. .

i 15 MR. DIVER: The prospect of a r e f e r .* a l to-the s

16 Justice Department.

17 COMMISSIONER ASSELSTINE: It gets up to this table, 18 MR. DIVER: Yes, it gets up to this table. It is 19 treated wholely unlike most other garden variety violations.

20 So there are those two significant differences.

21 And so my feeling was, well, all right, as long as 4

22 it*s well understood that there will be a violation thatscan 4

'i 23 be invoked for other kinds of oral statements, omissions, and 5

24 so forth.

We do have a provision in here that sworn'testimpny 25 would also be covered by this rule )

l,. So we'r'e talking about-', ,

/ >

1

/

. _. __ .- . -4

. - _ . - .~ _. . - . . . . . . .-

1 ~n

,g 44 l

1 oral statements that are not sworn but would be deliberate 2 misstatements.

3 3 And I think the answer is that it is very ditticult 4 as a matter of proot frequently to reconstruct what exactly l

i 5 was said when it was only an oral statement. When it's 6 written at least you can see the statement. When it's oral 7 .our feeling was that very frequently there will be a dispute 8 about what precisely was said, and therefore, there will also 9 be great dispute about whether the. misstatement, 11 there was i

10 one, was intentional, accidental, negligent, reckless, 1 ,

11 And so yes, in the extreme case where you can

! s

l 12 hypothesize a deliberate lie, it's very ditticult to defend J 13 that position. But our feeling was that sorting out those 14 clear cases from all those murky, luzzy middle cases would be 4

+ )

15 not worth the candle.

,16 And therefore, all right, fine, we will reserve the e

17 category matet.ial false statement for written statements and-18 sworn testimony as long as it's clearly understood that it is 19 possible-to be penalized for an oral. And perhaps, penalized 2 0' as severely or more severely.

i\ ~

l .21 CHAIRMAN PALLADINO: But let me go back. I agree 22 with' Joe's_ statement-that there may be some level at which we

, j 23 might want to say that people's oral statements won *t be 24 material false statements. But there are levels at which we 25 do expect and.need truthtui statements. So, 11 a person comes

,s.

45 1 and knowingly tells us something wrong, or he*s carelessly 2 disregarded the truth, I think that that certainly has all the 3 impact of a material false statement and should be so called.

4 Especially when we have records, such as this meeting where f

5 people -- information is transcribed.

6 In the Alternative, we have to swear everybody in 7 and that has sort of a negative connotation in itself It 8 says, well, we don't trust you, and therefore, we're going to 9 put you under oath.

10 MR. HENDRIE: Well, you know, wnen you go --

11 CHAIRMAN PALLADINO: I agree that there are 12 ditticulties --

13 MR. HENDRIE: -- and when I used to go down to the 14 Congress there are some committees which, either on a.1 1 15 occasions, or at least on some occasions, they'll swear you 16 in. And what they're doing when they swear you in, they're 17 putting you on notice that you,are liable to a charge of 18 perjury if you don't tell the truth and they find it out.

19. And I must say, looking at all of the aspects on 20 this material false statement thing, oral, written and so on, i

21 -I think you'd be better off reserving the material false 22 statement citation for written material and sworn testimony.

23 And then swearing people in where you wanted to put them on 24 notice that, look, this is-stuff that counts, tellows.

25 COMMISSIONER ASSELSTIME: Yes, but the quid pro quo

_ . . . - - - ~ . , _ . - - - -_ _. . _ - - _ , . - _ . , _ . - . . . - _ . _ _ _ _ _ , - . . _ . _ . , . - , ~ . .-

46 1 1 is that th+re really does need to be, in essence, a tuli 2 disclosure requirement apart from material falso statement 3 Whatever authority is going to be exercised there, you need a 4 full reporting requirement for safety information so that all 5 safety information, there's an obligation to report. And a e tailure to report or to report accurately is then punishable

? under -- using a-separate label, ,

i 8 MR. HENDRIE: Yes.

9 COMMISSIONER ASSELSTINE: So that really'what you*re i

10 doing is transferring the label 11 MR. HENDRIE: Sure.

12 COMMISSIONER ASSELSTINE: You*re preserving the tul1

! 13 responsibility for reporting that now exists under our material 14 talse statement doctrine. All you*re doing is changing the 15 label for anything other.

I 16 MR. HENDRIE: Just so.

17 CHAIRMAN PALLADINO: But that*s --

18 COMMISSIONER ASSELSTINF.: That's very different, I 19 might add, then some of the proposals that have been made to 20 the Commission ior moditying the existing doetrine. ,

21 MR. DIVER: But also in that second category you 22 don't necessary elevate them to the level of OI investigations 23 and bring them before the Commission.

24 COMMISSIONER ASSELSTINE: Sure.

25 MR. HENDRIE: Send them to the Justice Department.

-y- w ._y g -rw.u_-..y..ww.-.7---..__p7 -

- - - - - ey.w- ,, ~~.aec,--r= --,mm...+...,e--* . . j -n ,, e m_ ,%w.,

t ..-  ;

h 47 1

1 COMMISSIONED BEhNTHAL: But I --

2 CHAIRMAN PALLADINO: Dr. Roberts was waiting.

3 COMMISSIONER EERNTHAL: I'm sorry, excuse me.

4 COMMISSIONER ROBERTS: Giving sworn testimony before 5 the Hill, don't you think with anybody who's got a grain a i

o sense that inhibits your exchange betore the committee?

7 MR. HENDRIE: You know, as you well know, you watch 8 your language a little more carefully.

COMMISSIONER ROBERTS:

9 You bet. And you communicate 10 less.

11 MR. HENDRIE: Well, I suspect --

12 COMMISSIONER ASSELSTINE
You at least are careful 13 about what you say, although --

14 MR. HENDRIE: I suspect there is a not l irai t a t i on --

! 15 some limitation on --

I know when I used to go up there and 16 get sworn in, why I was very aware why I was being sworn in 17 and what the sign on the wall was implicitly saying. And I 18 watched my language more carefully, I suspect, in hearings 19 where I wasn't sworn in.

, 20 COMMISSIONER ROBERTS: Well, depending on whose 21 committee, sometimes that-sign says, we don't trust you.

22 MR. HENDRIE: Yes, that's right.

23 COMMISSIONEF ROBERTS: There's no question about

- 24 that.

25 COMMISSIONER SSELSTINE: It's a practical matter --

v - . . , , - ~ . - - _ . ,.-, .,

48 1 CHAIRMAN PALLADINO; But some of the committees also 2 will consider that you*ve perjured yourself 11 you withhold 3 information that they*re after.

4 COMMISSIONER ASSELSTINE: You bet.

5 CHAIRMAN PALLADINO; And so you can't be overly 6 careful.

7 MR. FARHIS: I might can just add a short footnote, 9 going back to Chairman Palladino*s statement that the system 9 depends very heavily and importantly upon timely and ettective 10 communications. Coupling that with Mr. Diver *s statement.that 11 the collegial process did operate, and we spent, I guess, .as 12 much time on this-issue as any other because we had agreed 13 with industry that this was of paramount importance. As much 14 sensitivity on this issue of any of them. Therefore, we spent 13 a lot of time on it.

16 _ And we feel that the impreciseness of oral 17 communication -- we may think we have communicated 18 unequivocably and clearly, no question about it. But 11 those 19 words were put on paper, you*d say, hey, that could be 20 interpreted so-and-so.

21 So there is a trade-ott. But we*ve tried to handle 22 by labeling some et the problems to meet your objectives, but 23 without all the legal implications and connotations of hanging 24 that MFS on it. It*s just a scarlet letter used to be back in 25 years and years ago.

2

I r

49 1 COMMISSIONER BERNTHAL; I have to say that I tniak '

2 where ycu've come down is rather close to what the Commission 3 had proposed some time back. But I can tell you, we were [

l 4 accused of virtually letting criminals and thieves go free in i I

i 5 more than one hearing on the Hill for even suggesting a policy [

i  !

O that came close to that. I'm pleased to see that you came 7 down somewhere close to where we were. [

l 8 MR. PARRIS: Well, hopefully, you know, I was }

f 9 talking to somebody, what can the committee members bring to 10 this particular exercise. All we can bring to it is j t

11 professionalism and integrity and objectivity.  ;

y 12 Now there are elements of subjectivity all the way l i

13 throughout. But we have trieo to operate under those. And 14 we've come up with a report which hopefully will enhance or  :

15 promote your interface with the Congress. If they are so I i

16 narrow-minded that they can't see two sides of the coin here, l i

I 17 this report certainly brings out some of the other side of the L

18 coin.

?

19 COMMISSIONER BERNTHA1,: The comment I would make on  !

?

20 Mr. Diver's dilemma is that the last argument he presents, I r f

21 think, is the one that you have to stand on. I i

22 CHAIRMAN PALLADINO: Which one was that?  !

23 COMMISSIONER BERNTHAL: I*11 say so in a second 24 here. I would be inolined to agree with the position that I 25 think the Commission has taken up to this point. Namely, that

- * * - e sy'~ = = - = *w --e v-v----

- --- . - - . - . . . ~ . . . . _ . _ . - .

i

-r t

  • t 50 f t

i j i wnether it's written or spoken, if you knowingly anc. willfully i i

2 and maliciously make a material talse statement, whether it's f

1 i 3 oral or not, we should take enforcement action. l i

e 4 The only problem I see with that is the  !

t 5 enforceability. And you correctly pointed out that it's very, f

4 i*

7~

b very ditticult, and we've been through this a few times here, I t

7 to go back and find out what somebody knew, when he knew it,

{

l 0 how he came to know it, And it's a very ditticult f i L 9 investigational process to find that out. f r

i  ;

l 10 Now it's too bad perhaps, to have to tall back on {

1

  • I l 11 such crass practicality, but we can expend a great deal of [

L i i 12 time and resources, as we've already found out, in trying to [

i 13 prove or disprove what somebody knew, and that indeed he ma'de i

i. *
i 1
14 a knowing and willful material false statement. That's the [

?

I

15 one strong argument, it seems to me, in support of --  !

i 16 CHAIRMAN PALLADINO: Many of our laws are ditticult t

?

17 to implement. If you have to show intent in any kind of a )

18 crime, .it's a ditticult thing to do. But that doesn't say you f r

i

> t i 19 should not have a law on the books that says you should not I t

20 have that kind of intent. i i

21 COMMISSIONER BERNTHAL: Well, I agree, Joe. I'm  !

)

22 simply saying, I think that's the only strong argument --

I 23 CHAIRMAN PALLADINO: Oh, I see.

4

[

24 COMMISSIONER BEMNTHAL': --

that deserves careful i  ?

r 25 consideration against keeping. steady on the course that we  !

. . . . _ _ ., . - ,_ . _ . . _ - _ . _ . _ , _ - _ . - . . ~ . _ - , _ - . ~ . . _ _ -

l 51 1 were on. And apparently the C ot.un i s s i o n -- or tne panel nere

, 2 has gone somewhat beyond that and removed that category from 3 the category --

4 MR. PARRIS: Let me ask a question, r

5 MR. HENDRIE: Moved it into the incorrect and --

6 COMMISSIONER BERNTHAL: Exactly.

4 7 MR. HENDRIE: -- it's citable as incorrect 8 information.

9 COMMISSIONER BERNTHAL: Exactly.

1 j 10 MR. HENDRIE: And then you don *t have to deal with I

11 the intent question which is really very ditticult 4

12 MR. DIVER: But you can because under any cate2ory 13 of violation, it the violation i s willful, that's a ground for 14 --

15 COMMISSIONER ASSELSTINE: To make it more severe.

16 MR. DIVER: --

escalation of the penalty. And it 1

17 ought to be.

18 COMMISSIONER ASSELSTINE: That's right.

19 MR. FARRIS; We don *t address this in the report, i'

20 but in a practical manner, couldn*t some of these problems --

, 21 it seems to me there are two types of questions that are 22 asked. This. steady stream of millions of fairly small 23 technical questions, and then.there*s some questions of major 24 import. And i t seems to me that 11 you want to be sure about 25 a question of major import, and if you're concerned about

, , - -- - , , - . . 4 , ,, - - - - - g- . , , . . ...-.-_m. -~-.%, - - ,,.._,,-% 7 ,-,-p.-, ,-,,,,-.-.,--.,,,.-.,,w.. . , - - ,

s .

I

$2 I swearing them in with the implication of that, it seems to me 2 that some of the more importtul questions could be posed in 3 writing and have the response in writing.

4 CHAIRMAN PALLADINO: Well, sometimes you want l, 4 clar.tication.

6 COMMISSIONER ASSELSTINE: I think 11 you get to that 7 point you're really creating a burden on the system 11 you're 8 saying, many of the oral communications that exist now have to 9 be done in writing. I think --

10 MR. PARRIS: I'm not familiar enough with the system 11 to say what percentage of those would apply. It just seems to 12 me that there are certain types of questions that if you want 13 -- a good, clean question, because the answer is a function at

14 the cleanliness of the question itself, the understandability 15 of the question.

le So the utilities say right now that they engage in a l 17 great deal of word engineering, you know, when they come back 4

18 because sometimes they don't understand fully the intent of 19 the question. So there has to be precise, clear communication i

20 both ways.

i

, 21 So 11 it's -- all I'm suggesting is, depending 22 upon the magnitude and importance of the question that there 23 are certain things that maybe we should ask -- the question l

l l

24 which forces us as the Commission to ask very clear questions, l

25 It gives the respondent the opportunity to respond in kind.

o d '3 1 COMMISSICMER ASdELdTINE. I take it the committee is J of the view that there coes have to be a means for assuring

.3 that we are provided with accurate information, and that our 4 licensees-teel under an obligation to provide accurate 5 information. It it's not the material talse statement label o in the case of oral exchanges or omissions, then there needs 7 to be a countervailing burden on them in terms at reporting 8 and reportability, and a way to enforce that 9 MR. DIVER: Absolutely.

10 MR. HENDRIE: Yes, and I must say, I haven *t detected 11 any sort of substantial feeling in the regulated community that 12 would disagree with that.

13 COMMISSICMER ASSELSTINE: Okay.

14 CHAIRMAN PALLADINO: Joe, a r s- you going to touch on 15 omission with regard to oral statements?

10 MR. HENDRIE: Yes, sir, I'm going to --

17 CHAIRMAN PALLADINO: Okay, because that --

18 MR. HENDRIE: I'm going to --

19 .. CHAIRMAN PALLADINO: That's another -- I've got 20 three hard areas where your comments are very valuable.

21 MR. HENDRIE: Okay, the next aspect of material 22 talse statement then is with regard to omissions. And again, 23 we see great ditticulty in making that -- in carrying that 24 under the material false statement labeled.

25 The problem is that the Commission is very hard put

. - - _. . . . - _ - _ _ . . - - - . . _ - _ . _ _ - _ _ - . ~ . , . . . ~ . ._ . .

i ,

. 54 i i to deilne all of the information that the itcensee is required t

2 to supply to avoid an omission, which then would lead him to a i 3 material false statement charge. And we really think the way 4 to deal with this is to put omissions over in the incorrect 5 information category.

j O If you find somebody who omitted to tell you I

{  ? something and, you know --

let's never mind lying, cheating .

I f j 8 and stealing. We needed it and you didn't tell us, here*s a  !

1

9 level two or whatever.

i

) 10 CCMMISSIONER ASdELSTINE: Failure to report, r

l {

! 11 MR. HENDRIE: But you're not able to detine all the l i

12 information that you *need. A lot of it is ad hoc. And even q 13 when you ask questions of licensees and they answer questions, 14 how much detail is it necessary that they supply to relieve i

15 themselves adequately of the liability for material false j 16 statement?

17 You ask me a question and I give you answer. I 8

j 18 think it's a good answer. It turns out later on that you

] 19 decide that I didn't tell you about some other thing that I o

l 20 could have told you about, but it didn*t seem to me at the

21 time necessary or whatever, but you*ve decided it is. And ,

i l 22 now, through this happenstance of human, individual }udgment, i 23 I'm now looking at the Department of Justice who are running 24 down my footsteps. And you know, you've effectively smashed i

4

25 my life to small pieces, tellow, And I think that's an

, .-w. r..___ ,m_., -_r.., ,.! , , , ~ , _ , _ . , . , --_-. ._. -.-w..,_.-. .....,.,._,._.,,.m...,_...---,m.-- m.. . . . - . , , , , .

_ . . = . .. . _ _- _ . ~ - -.. - _ = - - -~ ._ . . - - _ ._

4 55 ,

l 1 unreasonable burden to put on people.

2 MR. PARRIS: That's covered pretty well on page .0 i

3 MR. HENDMIE: And you know, you can say, well, but I l j 4 the NEC is a reasonable agency. Let us deal with that kind of i

5 problem in our discretion. How about inat? I can fino people l

6 wno wouldn't care to agree that you're a reasonable agency.

7 COMMISSIONER ROBERTS
Many.

5 8 CHAIRMAN PALLADINO: I think we could help you find 1

9 them.

10 MR. HENDMIE: And I think it would be better then to 4

11 have a fair anc reasonable policy and let the agency carry 12 that out, rather than to have a bad policy and expect the 4

13 agency's good judgment always-to save the situation in instance l

i 14 alter instance after instance.

1, 2

15 So again, with regard to omissions, for a lot of the j 16 same reasons, related sorts of reasons as the oral, why we'a ,

17 put them over on the other side.

i l 18 CHAIRMAN PALLADINO: Joe, is - - -

I j' 19 MR. HENDRIE: If you just give me another minute, i

20 why I'm going to conclude my presentation.

21 CHAIRMAN PALLADINO: See, I have to } ump in quickly 22 because otherwise I have to interrupt people to get a word 23 in

- 24 MM. HENDRIE
Go ahead.
  • 25 CHAIRMAN PALLADINO: Excuse me, I didn*t mean that.

1 i 6

, , - . , , _ ,- . , -..--~.-.n,..,_,._.-, .- -. -. . . - , - - - - - . . , n...,.-~,,----

to 1 uo ahead.

2 MR. HLMDRIE: All I was going to say was that the 3 committee's recommendation then is written statements, save 4 orals and omissions for the incorrect information category.

5 You have a statt paper, it's SECY 84-421 that seems to the 6 committee to cover all of the committee's points in very 7 adequate fashion. And we recommend that paper to you as the 8 basis for your 1Jrther consideration.

9 Good. Now that's the end of my presentation on 10 material false statements.

11 CHAIRMAN PALLADINO: Again, this is a very complex 12 question, this question of omission. And it's one that, I 13 think, we've all struggled with, and I'm still struggling with 14 it. But there are circumstances where I have ditticulty in 15 saying, this is incorrect information. And let me cite and 10 example, and I hope I don't get close to the -- too close to 17 the actual case.

18 But it at a licensing proceeding we're having 19 presentations and the presentations show what a fine record of 20 performance that has existed up to this particular point.

21 COMMISSIONER ASSELSTINE. You're getting too close.

22 LLaughter.1 23 CHAIRMAN PALLADINO: Well, let me see 11 I can steer 24 just slightly.

25 COMMISSIONER BERNTHAL: You mean that's such a small

57 1 set?

2 CLaughter.)

3 MR. HENDRIE: The names of the innocent will be 4 changed, right?

5 CHAIRMAN PALLADINO: No, but there is knowledge on o the part of the presenter that, boy, this sure isn't true. At

? least, there is one strong example that denied the truth of 6 this.

9 Now that seems to me serious enough, even as an 10 omission, that somehow it ought to be treated differently trem 11 inaccurate information. And I don't know what your views 12 would be on handling that kind of a situation.

13 MR. HENDRIE: Well, it*s an omission, in order, I 14 hope -- I hope in the way that you*11 end up changing this 15 policy -- to install the provision that it can*t be a material to false statement unless there*s an intent to deceive, you're 17 gqing to have to --

18 CHAIRMAN PALLADINO: Well, yes, I assumed that.

19 Mk; HENDRIE: That seems to be a sort of agreed on 20 aspect of all of these variations. Once you do that, now 21 you*re going to have to demonstrate that it was his intent to 22 deceive, or careless disregard in the omission. And oh, boy, 23 well, you know, are you really going to be able to do that?

24 And 11 you try to do it, are you going to be satisfied that 25 you, in fact, are getting to the truth in all the cases?

i r

t k'

58 i CHAldMAN l'A L L A D I N U . Tnat s the problem.

2 MH. HENDRIE: 1s it really worth the ettort that 3 you're going to put into it, in the delays you're going to 4 throw in the process, and the statt time you're going to 5 invest?

6 CHAIRMAN PALbADINO: Well, in the example I used,

? I'd say yes, I would have done something different had I known 8 what was omitted.

9 But I recognize that these things are ditticult to 10 prove. But we set laws that are ditticult to prove in a 11 number of areas. And just because it's dttficult to prove 12 doesn't say that we shouldn*t call it whatever we think is 13 appropriate.

14 And I agree with you, you can't go too far down this 15 business of omission because, I often don't know what it is le that's wanted. And so I may suites there. But there are 17 cases that can be very strong with regard to omission that I'd 18 Just like to get your feeling about, or at least make sure 19 that you've thought about it to the extent that --

20 MR. HENDRIE: Yes, I think it's just the same 21 argument that Colin made with regard to the oral statement.

22 Indeed, you can construct a particular omission case which t

23 seems so egregious that you want to reach out for the strongest 24 sanction you can put your hands on. But you have to recogni:e 25 that that is not characteristic of the omissions you will have

. - _ . .. _. . - . __-- ._ -~ _ - _ . - - . _ . - - . _ _ _ . . .

t d

S!

i

1 to deal with day in and day out in the e n t o r o w .1 + n t program.

2 What you're going to h a **

  • to deal with are all of 1

! 3 the ambiguous situations. And you*re going to spend endless 4 statt tiue and have everybody agonizing endlessly trying to  !

1 f 5 prove these things.

T l c And I think from the standpoint of an ettective j  ? enforcement program that your deterrence does not sutter that 1

a 8 much 11 you allow those one or two per season really egregious

}

1

[ 9 omissions and orals to be inaccurate informations and get i

i l 10 their severity level one or two penalties. Your deterrence

. 11 isn't going to sutter that much and you will have saved i

4 j 12 yourself an enormous amount of ditticulty, f

i 13 COMMISSIONER BERNTHAL: Practical --

l

! 14 MR. PAHRIS: That's essentially one of our findings.

! 15 You know, it we live in an Aristotlean world et pure black and 1 i 16 white that would be one thing. And you can construct scenarios  ;

I -

I i

! 17 as you just did, Mr. Chairman, of what apparently was a pretty >

t l . i 18 black and white situation. But as Joe said, the mainstream of l (

i [

19 most of these things is going to be characterized by the shades l j -i 20 ci gray, the ones with the ambiguous, ditticult to prove type i

21 things. g i i r

22 COMMISSIONER ASSELSTINE: Aren*t there just a  !

r

'43 handful of these nistorically since -- say since the VEPCO 1

i 24 doctrine was adopted that have tended to surface? I mean, I [

t

[ 2$ remember asking the question of the Statt when we were j I

i I

i 60 1 discussing the issue.  ;

i 2 MR. HENDRIE: The numbers can't --

l 3 [ Commissioner 7- erts lett the room.'J I

4 COMMISSIONER ASSELSTINE: I thought it was less than j 5 10 or something like that. Ever since that enforcement --

6 MR. HENDEIE: I think that's right. The numbers I

g 7 can't be very large. But the awareness of the vulnerability s --

9 COMMISSIONER HOBERTS: The threat.

}

j 10 MM. HENDRIE: The threat out there in your regulated t

i j 11 community is pervasive, i

l 12 COMMISSIONER A8SELSTINE: Let me ask the relationship i

l 13 --

1 i

4 14 MR. DIVER: Yes, I would say that also, we j 15 specifically asked the utility representatives 11, in fact, i

16 they could give concrete examples of ways in which policy had 17 -attected their behavior, And I would say this is probably the f

18 one place in which they did that.

4

! 19 They said, in various ways, that it had changed the i 20 information processing routines in their organizations. That 21 now people were required in many more instances than before to l

22 put things in writing, to check things with superior otticers,

t. 23 and so forth. And so that led us to.give s otnewh a t greater

! 24 credibility to their complaints about this policy than their

! 25 complaints about other aspects.

i l

. . . . - . . . ~ - , - . . - . - , _ , , . - . - . , , , , , , . , . , . , - - . - , , . . , . . , . , . , . . . . , , , , . . , . . - , - . , . , , , , , . -.n,...

1 ol 1 COMMlSSIONc.J ZECH: You're talking acout the oral j 2 part et .t?

, 3 MR. DIVER: Well, about the material talse statement ,

}

, 4 policy generally.

J i

i 5 COMMISSIONER ZECH: I see. j 6 MR. DIVER: But they particularly mentioned the  !

't omissions, probsbly even more than the oral part, because the l B ouit s s i on s --

l  !

> COMMISSIONEH ASSELSTINE. It's a grayer area.

i l 10 MH. DIVER: -- was such a wide open potential source  !

11 of liability, that one could never know where the Commission 12 might come trom next and say, ah-ha, you knew something you J

13 didn*t tell us. Well, you didn't ask. But you should have 14 told us anyway.  ;

i 13 See, I think in your example, Mr. Chairman, it j 16 sounded to me, ii I understood your --

l 17 CHAIRMAN PALLADINO: Incidentally, the real example j 18 wasn't that black and white, or isn't.

i 19 MR. DIVER: Okay. Well, I was going to say that --

}

1 T j 20 I'm maybe the only person in this room who is unable to figure i . .

21 out what you're talking about there, but --

4 l 22 tLaughter.1 1

. 23 COMMISSIONER ASSELSTINE: You*re not alone.

I 24 MR. HENDRIE: I can't figure it out either.

I 25 CHAIRMAN PALLADINO: All right, go ahead.

,,__y. , -,. - , , , . . _ . - - . .

.4.n - #,%. , _ . , . _ _ , _ . . , . - _ , . . . . - . , , , . _ _ . . . , , _c .,-...,.-.r,,-- - , , , , , - - _ . , _ . , , .

, - - . - - - - _ . _ - _ . . . - . _ . . - . . . - - _ ~ , - . . - . - , . _ - - = .

i ,

i i O2 i 1

1 l 1 MR. DIVER: In any event, I just want you to know i ,

! 2 that you've successfully disguised it ior me. t I

1 3 [ Laughter.]  !

l 4 MR DIVER: But it sounded to me as though your case I

4 5 plaustbly involved a statement as well as an omission. That i

O is, someone was asked, what's your enforcement -- what's your 4

7 record Itke and they said, it's line. Well, 11 you say it*s i

j 8 line when you know it isn't line, that sounds like a i

I 9 misstatement to me, not an omission.

i l 10 COMMISSIONEN BERNTHAL: It was an omission.

-f

11 MR. DIVER
All right, I'll take your word for it.

f

. 12 COMMISSIONER BERNTHAL: But I agree with you. It's i

l 13 just mantiestly unfair, the policy the Commission has had up l i 14 until now on this question of omissions. And I'm pleased to i

{

15 hear the panel, and I can assure you that I for one may invite i

j 16 you to join us when we explain ourselves again on the Hill. ,

t 17 COMMISSIONER ASSELSTINE: Aren*t you lucky?

I i 18 LLaughter.]

1

19 COMMISSIONER ASSELSTINE
Joe, let me ask the

! i j 20 relationship --

i 1 ,

e 21 MR. HENDRIE: Will it be sworn testimony? It makes t i 22 a difference.

l

23 CHAIRMAN PALLADINO
Go ahead.

1 i

1 '

24 COMMISSIONER ASSELSTINE: You mentioned criminal j

c 25 sanctions. Let me go back and explore that a little bit, i

i. i i

_ . . _ . . _ , _ . , . ~ . - . . , . . - . . , , , , . . .._...~.,,m...., , _ . , _ , . . _ ,.,...,_.._..-......__....,.r. ,__.,-...,,-,-.m,-__.~.,, -m,~ .

a n '3 1 To what extent are w111tui, intentional, eitner oral 2 material false statemen'.s or omissiona punishable under the 3 criminal statutes?

4 [ Commissioner Huberts re-entered the room.J 5 MR. HENDRIE: It you declare a material talse o statement -- 11 you cite for a material talse statement, it s 7 your practice now to have done an Ottice of Investigation 3 investigation to establish that and to refer the matter to the 1

9 Justice Department.

10 COMMISSIONER ASSELdTINE: Well, I think we have an 11 obligation, it it's punishable under the criminal statutes we 12 have an obligation to refer it, regardless of what the 13 Commission does on its own regulations.

14 MR. HENDRIE: I think that's exactly right It it 15 meets 18 USC 101, why, by God, it's traud against the teds and 16 you've got to face the U.S. Attorney. There's no question 17 about that. ,

18 COMMISSIONER ASSELSTINE: What I'm wondering is 19 this, it --

20 MR. HENDRIE: But your definition broadens the stut!

21 you send to Justice beyond 18 USC 101, I think.

22 COMMISSIONEH ASSELSTINE: Okay, it may, in terms of 23 providing an independent base.

24 I guess what I'm wondering is this, it the 25 Commission's approach is perceived as a backing away, and as a

b

-f 64 i

1 weaker approach to enforcement of these matters, and it the 2 United States Attorneys are encouraged, for wnatever reason, 3 to become more active and involved in this process. And I, i .

4 for one, quite trankly, see a greater involvement and interest i

I 5 in pursuing these kinds of cases.

6 Then, have we really solved the utility's problem?

? Or have we created a worse problem? It in fact, there is a i

i 8 broader perception within the industry that they are very i

J 9 likely for material falso statements, including oral 10 statements, to face criminal investigation and prosecutions, i

t i 11 isn*t that going to make things worse than 11 the agency had i a

12 handled matters under its civil authority?

f 13 MR. HE!4DM I E : I think the regulated community's l-14 perception is that whatever their liabilities under the l 15 criminal sections of the U.S. code, there are -- those are l 16 their liabilities and their prepared to deal with them. You 1

17 know, u t,i 1 i t i e s ran power plants with the Fedora 1 Fraud j

18 Statute in place in the criminal code long before we nuclear i 19 regulators began to nuclear regulate. And people have lived 20 with that, and they're prepared to cheerfully continue to live l 21 with it.

22 It*s the broadening of this language under the 23 current NHC policy that's really got the wind up out there, 24 and I think justifiably. And I think, indeed, as you say, 25 U.S. Attorneys are showing more interest in pursuing matters i

em, r.- m 2 --


,-w,- + - . , - - - - . - * .- e . , . - , .---,-t- -- ,-m.,----~-+m--,-, ,y r-x -e--, v.~m

. . .- - ..~..-. .-_--.- -.....~.---- - - . . - ~ 1. n-. . - . . - . . -

4 I r a 05 t

1 --

these matters in the nuclear tivid. But, I still think you j 2 ought to change the policy, t

3 COMMISSIONER ASSELSTINE. Colin, do you have any 4 thoughts on that?

i f [ MR. DIVER; well, it's a possibility. I don't think i

t I l ,6 it's a very realistic possibility. I think partly because the i

I

. . ,7 utility industry, at least 11 I were representing the utility ,

i j 8 industry I'd be a good deal less worried, even under a more u

1 9 aggressive U.S. Attorney enforcement policy about the threat l

10 of criminal enforcement than civil enforcement, simply because i

11 criminal enforcement is much more ditticult to get than civil y 12 enforcement, 4

i t

13 COMMISSIONER ASSELSTINE: Right.

a 14 CHAIRMAN PALLADINO: Lando?

15 COMMISSIONER ZECH: Just going to say, you point out j to in your paper, SECY 84-421 i s recommended as a vehicle for I f

] 17 action. And I presume by that you mean that it covers your J

4

! 18 points and you would recommend approval of that SECY paper.

l 19 MR. HENDRIE: Yes, sir.

1 20 COMMISSIONER ZECH: Thank you.

21 MR. HENDRIE: Our ihnding was that 421 followed --

j- '22 went right down the line.where'we thought -- where we wanted

, 23 to recommend you to go. And it has the language that would be i

24 used in a rule c h a n,g e , and so on.

i 25 COMMISSIONER ZECH: Right, thank you. -

i n

_ , - - _ _ . , , _ . - , - -r, - , - , - , - , , , , - 4 m.-~. .---.--e,-,- ~ ~ - . . . - - - - - - - - - - - - - - - - ~ ~ - - - - - -

.. - . ~ -

i i

< . . )

j- l 7 on i 1 Md. HEMDRIE. It's there for the using

~

l .

]

2 CHAIRMAN PALLADINO: Can I touch on another aspect

3 of this problem? I think it's perhaps one of the most '

i ,

4 important aspects of the report 5 In a revision to -- or in a proposed revision to e

{ 6 SECY 84-421 we -- I think as our general counsel had reworded i

j 7 this this way, that we put a general reporting requirements 8 tor licensees and applicants to notity the Commission of any i

9 information that is significant to an application or licensee.

I 10 Now an unintentional tailure to report would be a violation of i

f 11 the requirement, but would not be a material falso statement.

5 i 12 Now the original 421 had said, well, it the licensee 1

) 13 or applicant had identified it as significant. But with the I 14 proposal, as I read it, I wonder what your comments would be.

l

! 15 Am I'm not trying to trap you because --

I 16 MR. HENDRIE: Yes, Mr. Chairman, .the c onuni t t e e did

]

s 1

1 17 not parse the differences between the -- in the succession of I

j 18 Statt papers on this point. Indeed, in I believe it's85-149 1

i 19 where there is that modified definition of -- for the full i .

f 20 reporting requirement. It's how you phrase tho' proposition 1

21 that, 'by George, it it's significant to' safety in any way you

, 22 ought to tell us. And if you don't, why it's inaccurate i

1 23 information or whatever.

24 COMMISSIONEN A S S E L S'11 NE : So you're endorsing the 25 concept although not n e c e s s a r i l:' the phraseology in those I

i

. . _ _ - . ~ -- , ..,_-...-,m_.- . . _ _ _ , . -.._._--.-._-..m~._.--~._..,._____.~.- , , _ . - , _ _ _ .

67 i

1 papers.

2 MR. HENDRIE: Yes, the committee didn't look at the 3 specific language to accomplish that in 421 versus 149. And I 4 must say that I don't think my personal comments would be 5 worth very much to you on the point 6 CHAIRMAN PALLADINO: I would say that's a material

? talse statement.

8 [ Laughter.)

9 MR. HENDRIE: I don't know whether Colin is familiar I

10 enough with the papers to comment.

11 CHAIRMAN PALLADINO: No, I appreciate that this is 12 not what you came for, but nevertheless it is something that l 'J we are considering, and if you have any thoughts on it, it 14 would be helpful .

15 MR. HENDRIE: It's a point you'll have to decide as 16 you move forward exactly how it is you're going to phrase a 17 tull reporting requirement because I think you're going to 18 need one.

19 CHAIRMAN PALLADINO: Okay 20 MR. DIVER; I don't think we can go beyond endorsing 21 it in concept at this point.

23 COMMISSIONER ASSELSTINE: That's perfectly 23 understandable.

24 CHAIRMAN PALLADINO; Now there are other aspects of 25 the report besides material false statements. I don't know it

. _ _ _ _ _ . _ _ - - _ _ . . - - _ _ _ . _ _ . _.____m . . _ .m - _ _ _ . . . - m . _ _ ~ _ _ . . . _ _ _ _ _ _ _ _ - _ . _ _ _ .

!- I l .

40 ,

! i l 1 otners want to pursue any aspect of material falso statement I

2 turther, or 11 you have any other point you'd like to make. I "

r j 3 was going to suggest we go on. '

i 4 We have used up our allotted time, We're roughly 15  !

4 5 minutes over.

i 6 MR, HENDRIE: Yes, and 15 minutes besides.

? CHAIRMAN PALLADINO: I don *t know how long the i -

l

] 8 Commission is willing to sit. But I thought maybe we ought to

'i 9 allow you another.13 minutes to highlight other features,

?

l 10 trying to restrain ourselves as much as possible until you've l c a

11 tinished It that*s agreeable with the commissioners.

l

. 12 COMMISSIONEH BERNTHAL: I don't understand this. I I

13 These meetings never ran beyond the allotted t i r.1e when Joe

! r j 14 Hendrie was chairman.

I f f 13 MR. HENDRIE: Tha s right. Boy, we always --

4 I

j to CHAIRMAN PALLADINO: Until he was chairman, I'm told '

k I 17 --

[

f 18 MM. HENDRIE: -- made the schedule, l [

]

! 19 CHAIRMAN PALLADINO: -- after he left being chairman. l j 20 MH, HENDRIE: We always made the schedule and the ,

i

21 cost to boot. Sam,-keep quiet,
  • i 22 [ Laughter.3 L c

, 23 CHAIRMAN PALLADINO: Well, let's try to give you a f.

! 24 chance to highlight the rest of the report,

, 25 MR. HEffDR I E : Okay, !*ll do it rapidly on essential 1

i

. ,-em., w.*,.e - - - --4, --w.~ r-n- r-, -4,,---.,w.-,--,me,-w r w --=.-r-vm.,-,- - m e, ww . ,ew,-*+.,*r-------se-w.mm,r--wwr-emm--+-

--~...7..,.n. - ~ , .

.e i- e

  • i p,

r 4

)*

<, i a .

.. f. ,9 ,

{ ,

/

j.

3 1 points, Mr. Chairman. '

i A >

! 2 The next item on the spectite isede-hed - a tor.de with i

j 3 timeliness. There was a lot of comment abput how agonizing it '. j 1

l

-i 4 was to have these things stretch out and stretch out . 1 f

5

[ Cormai s s i o n e r Roberts left the room.J

)- 6 but, the essence of the matter is that MI? ._ H END M s E. :

{  ! c, j

7 the Stati in a new inforcement -- in a new chapter in the f

]' 8 enforcement manual h a's , I think, gone 80 percent et 80 percent i '**

9 '

of the way toward c.u r i n g the problem., They're really trying n ,

. *s . ,

i 10 to move things up in terms of.tiLeliness. 11 they can make . .

i 1 /

p' 1 11 anything close to their eight-week schedule -- and they're '

}

} , .

j 12 beginning to get around 10 or s,'h tor most, e!.calated  ; enforceme.nt 13 actions' -- why that's' pretty good. / ;% -

( <.

] 4 4

14 What will remain then ears.the tough cases wher,e '

lt

/ /

there is an Citice of Investigati'on a c t i vi t / *hoing

15 on. T !) a t ".

b i 16 always tends to take a long time. Ahd 1,1 something --

ii it lJ . ,

i , '. "'.

} 17 gets referred to austice, as a number of t, h e s e things do, anc , j J , .

d l 18 then you're in the position of trying to git Justice to tell l . . I f

. 19 you whether or not ,.ou y can go ahead with,the'agtton, or '

l

! f-r  ? r-

, 20- whether they wanU you to keep quiet and wait. Why then, i t  !

t y~ j I a ,

j _21 can turn out to be years and that's unfortunate.

l - i 6 i 22 Arid the committee doesn't know what to do about I d.

i l 23 that. It doesn't -- hasn't devised any way for you to pry the i f e i

24 Department.of Justice into more vigorous. action 7 other than to 1

4 4

l 25 tell you to keep poking them. So those cades Mill continue to i ., .

4 ,#

u. _ ______- - ____ _ _a.  %

..__u r

-- -- .-. . . - _ - - - . . _ . - _ - - ~- - . . - - - - - - - - - . - - - - .

i 6

70

1 be a problem. But the run of cases ought te be dealt with by
2 . the Stait's self-imposed new schedule.

3 Now our recommendation then for timeltness is that i

4 the Staff ought to come as close to meeting their eight-week l t

5 schedule as they can, subject always to not sacriticing the quality of the pToduct. Because the eight weeks i s very

[ 6 l_  ?. Light, and it would be unfortunate to degrade the quality of f

, 8 the Stati work on an escalated enforcement action just out of ,

9 blind need to meet an arbitrary eight-week schedule, even

}

j 10 though it's very desirable to do these things promptly. So j

! 11 maintain the quality and get as close to eight weeks as you I

i 1 l 'J can.

i.

13 Secondly, where Stati papers have to be prepared to '

l

} 14 come to the Commission explaining-a proposed enforcement [

15 action, that turns out to take some time occasionally because i i

I

16 they have trouble getting agreement on language in tne Stati i

L

, 17_ paper from all the Statt offices that may concur -- may have

!c

^

! 18 to concur -- is a common phenomena that all of you are well

! 19 familiar with, And all we can do is to exhort them to expedite i

I 20 the process of getting concurrence and get the paper to you, i

21 You also need to act promptly them. [

I j 22 MR. DIVER: We can exhort the Commission.

2 l

i 23 COMMISSIONER ASSELSTINE: That*s right. l j 24 MR HENDRIE: Right, we exhort the Commission as j I

25 ' well to move.

1

- . . - ,-e, - , , - , - ~ ~ . , c~, --,.-~,-e!, - - ,, m w-,w w n , , , - - ,ug-en--n,n-----e-.-.--- --,,-~~r,--

71 1 COMM!SSIONsv. AbSELSTINE. I voted on o .1, just before 2 inis meeting.

3 MR. HENDRIE; That*s the spirit 4 CCMMISSIONER HOBERTS: I beat you to it

$ LLaughter.3 ,

6 COMMISSICNER ASSELSTINE inat s right, you did.

7 CHAIHMAN PILLADINO: Your exhortation is working, e MR. HENDRIE; The third point was that the 9 enforcement, I&E statt and the enforcement statt and the 10 executive legal director's ottice are going to have to bc 11 prepared to take a little more heat on the question of what 12 goes to OI 13 You have to recognize that when~ a case goes to 14 the Ottice ot Investigation it's going to be there awhile.

13 Those things create a lot of turbulence and contusion and 16 complexity, and it all has to be sorted out in a satisfactory -

17 way. And that takes a lot ot} time. .!

18 The ISE statt and the enforcement statt are going to 1

19 have to be prepared to take some heat and say, we don't think 20 this case justifies OI's participation, rather than saying, 21 gee, to avoid criticism, let's throw it to O!

/ ,

22 And I think the Commission, in turn, has to be  ;

23 prepared to back them up when they make those tough decisions 24 and not leave them hanging out there'in front of some 25 Congressional hostiles to try when somebody says, no, no, you

l 72 1 should have turned it over to the investigators, because j l

l 2 otherwise, every confounded case is going to end up in 01 and i l

3 the whole process will come to a -- you know, will gridlock on

't 4 you, d There is a memorandum of agreement between the Stati 6 and IO-that the 10 will provide a priority and schedule for 7 each investigation they are asked to do. There is furthermore B contemplation that cases that are referred to 10 that are 9 labeled as a lower priority and 10 says, look, I just can*t 10 get to this thing for six months or two months or whatever, 11 that they ought to go back to Inspection and Enforcement, to 12 I&E, and just say, we are not going to do an investigation.

13 That will cure the timeliness problems.

14 Enforcement conferences. Everybody had a good word i

f j 15 to say about enforcement conferences. The regulators thought

?

le they were one of the most effective tools in the enforcement 1

? 17 program. People out in the region liked them. Even the

( 18 licensees thought they were good. They had some bad stories e 19 to tell about mistreatment they felt in the enforcement 20 conferences, but even then, they said, they can be good i 21 exchanges.

s

, 22 A basic question is when you go to an enforcement ld' 23 conference, do you go to get the riot act read to you and sent I 24 home like a bad boy, or do you go to present information, or 25 do you go to discuss a thir.s and understand one.another, what

o .

l 7 'J l

{'

j 1 The reconnendation of the committee is that an

)'

t i

2 enforcement conference gwnerally, not always, because it is '

I I

+

3 clear there are times when particular thrusts are appropriate,  !

4 4 but generally ought to be a' serious exchange between the Statt I

5 cn the one side, the licensee on the other, informatten and i l

I e points of view about the occurrence that Qave rs.e to sne 1

7 potential citation, to the conference. J t

8 The Statt ought to be prepared to outline its "

I i

9 understanding of the occurrence and its position on a possible [

1 b 10 violation derived therefrom. [

t 11 The licensee ought to be prepared to provide as f l

t 12 accurate an account as he can of the occurrence and why and i 13 what he has done about it and what he plans to do about it h j  !

14 You ought to give the licensee at least a few days notice, to

[

j i 15 give him some chance, it he works through the night, to get f

a lo himselt in shape. We recommended as much notice as i 17 practicable, but a minimum of three working days. i b

i

! 18 As I believe is now the uniform practice, or I hope [

t J 19 it is the uniform practice, licensees ought to be told this [

.)

20. three day minimum in advance there is an enforcement conference i.

21 they a'r e coming to, because there have been occasions in the

+

22 past when people have gone to these meetings and then gotten  ;

23 home from the regional ottice and discovered a couple of weeks i

24 later they had been i n an enforcement conference, and here came 25 a notice of violation. I hope that is over with.

. -. . - . _ . . - m _ _ . , , , . , , _ _ . . - .. . - _ _ . ~ . . , e- - . - - . . ~

m._ - . . _ _ _ _ . . _ _ _ . _ _ _ _ _ _ _ _ . . _ _ . _ __ _ _

s

  • 74 1 Press releases. It's elest trcu the utility witness I

2 statements, and I think you see it very clearly, too, thst the l

z 3 public attention to a citation, the negative publicity in 4 their geographical area, is a very heavy burden for the l

5 regulated entity.

6 COMMISSIONER ASSELSTINE: That's the teeth in the r

7 program, i 8 MR. HENDRIE: That*s a big chunk of deterrence, in 9 fact. One could argue that they ought not to do it, and we 10 quoted you, the FAA, saying only in a manner that reasonably 3

11 protects an alleged violator's right to due process and fair 12 treatment, 13 On the other hand, it is.a substantial piece of 14 deterrence. It's not at all clear to the committee that you i

j 15 ought to be asked to forego that. We recognize that the i 16 Agency will take enforcement actions and will announce that it 17 is taking enforcement actions.

18 COMMISSIONER ROBERTS: Do the other agencies 19 advertise this way?

20 MR. HENDRIE: Generally --

I don't know. Colin, you 21 are apt to be more of an expert than I am.

22 COMMISSIONER ROBERTS
I-don't remember reading that 23 United Airline or Allegheny --

24 MR. DIVER; The FAA does it selectively. Frankly, I  ;

25- would.much prefer a uniform requirement than a selective

i 75 1 requirement. A selective requirement is subject to criticism 2 for abuse, prejudice, favoritism, whatever. I don't know in 3 fact how the FAA program works. They claim they use purely 4 objective and neutral criteria in deciding when to publicize. i d In any kind of controversial political environment, my guess i

e is that there will always be people who doubt that.

? I strongly believe in maintaining the uniform j '

8 pelicy. There are some other agencies that have uniform l

9 policies. The Federal Trade Commission is one. I think they i i 10 find it is workable. In fact, it is more protective of due I 11 process rights, it it is done in a consistent way, if the l 12 press releases are objective, 11 they tend to summarise cnly 13 the allegations and not engage in any kind of editoriali=e'd 14 comments.

15 In addition I would say not only is it a very 16 important part of the deterrence program, in fact, I think the 17 most important part. The. utilities almost all.said that the i

4 i 18 fine is of secondary i m p o r t z.n c e . What they care about is 19 publicity.

20 I think it is also a very important ingredient in

-21 the overall program of the agency to maintain its visibility 22 and credibility in the ~ community. I think it helps to reassure 23 the public that the agency is doing its job. .I think it

! L 24 probably helps at the-margin to encourage. people to disclose i

25 information about possible. violations to the agency. I think

l l

l 76 l 1 it serves other purposes besides deterrence wnich are salutary, 2 MR. H bt4DR I E ; What we do recommend on press releases, 3 just to ensure that licensees get a fair chance to reply, your 4 rule now is that the regional press officer calls the utility 5 and tells them there is a press release about a notice of 6 violation, about the issue. We still hear stories, because of 7 internal communications in the utility, we still hear stories 8 about people getting trapped flat footed and here comes the 9 reporter with a camera and a microphone and what about this, 10 and gee, I never heard of it, I didn't know.

11 What we recommend is one day *s grace between your 12 notification to the utility that the press release is about to 13 be issued and its issuance. I don't think you can stand very 14 much time in there, because the leakage is bad in the system.

15 We think you can stand one day. That would give the licensee 16 time to get his internal communications working and get 17 himself in a position to make a response.

18 The second thing is that the press release about an 19 enforcement action is certainly going to talk about the 20 enforcement action and the violation, and talk about it in a 21 factual way; pretty much the press releases we read as 4

22 specimens do that.

1 23 11 that is the only thing that the public sees, and 24 indeed your press releases are going to get a lot more 25 attention than his press releases, or then what is in the

??

I public cocument r e cta , 000 Knows, there is more to the story J than that 3 The public sees this thing, the XY2. utility is 4 getting fined for something bad they did. There is no other 5 word there, and that may be the only tning they read about XYZ e in the past two months.

, 7 COMMISSIONER BERNTHAL: Six months sometimes.

8 MR. HENDRIE. Six months, it the utility has been 9 lucky. It in fact XYZ has been running a pretty decent shop, i fJ and if they crack in and pounced on this misdemeanor and fixed 11 it up so that it is already fixed, and that is not uncommon, 12 because this release will occur several months after tne 13 event, fairness and a balance and accuracy in publicly 14 available information suggests that the press release down in 15 the lower paragraphs could also comment that the plant is 16 operating satisfactorily today and he fixed it as follows.

17 That is so there isn't the connotation with the 18 press release which only mentions the violation, that something 19 bad happened. We don't say what the situation in the plant is 20 today, and the implication is it is still lousy.

21 COMMISSIONER BERNTHAL; The implication from your 22 recommendation seems to be even more than that -- stop me if I 23 am wrong -- namely, that our press releases often don't even 24 make clear at,the time a fine is imposed, make very clear that 25 it is for a violation that occurred some time earlier, and l

.-. .~. - . _ . - .. - . .- . . - . . - . ._ w 78 1 that.you aren't seeing something new again public, you are 2 seeing the consummation of the process here.

3 Did 1 Ju see much of that? Do they make that much j

4 clear at least?

$ CHAIRMAN PAL ~LADINO: The media does not always print 6 the whole story, even if you give it to them.

7 MR. HENDRIE: You can't always guarantee that the 8 press stories will have all the information that the release 9 has.

10 It seems to me that most of the releases that I can 8

i 11 recall reading will have a sentence, on November 21, 1984, an 12 operatos did thus and so.

13 COMMISSIONER BERNTHAL: That is pretty clear.

14 MR. DIVER: It may not be clear that it has been 4

15 corrected.

16 MR. HENDRIE: Yes.

4 17 COMMISSIONER ASSELSTINE: That*s right.

18 MR. HENDRIE: More often than not, there is nothing 19 said about whether there was a correction and what the present 20 status is. What we are just saying is if these releases are 21 the thing that the public is more likely to see than anything l 22 else, we think the agency has some obligation that they 23 present a fairly complete and accurate picture in order that i

24 you don't unconsciously or unknowingly bias the perception.

2$ Hegionalization. Comments one way and the other g .w - - - -w+w wew +%-' e. w tiwe ee

79 1 about whether or not it has been good or bad for enforcement 2 policy The better view is that regionalizatten has not had a 3 major effect, certainly with regard to escalated enforcement 4 actions. Those all come into the same staff, the Enforcement t

5 Staff in ELD. They get a pretty uniform treatment, however

~

6 -they started out in the region.

7 The four's and five's are strictly regional matters 8 There may be some differences there. There hasn*t been any 9 particular collection of information. Stati now, however, is a

10 going to look at a sampling to try to level that.

i i

11 The only recommendation we have there is a 12 generaliced do good one. If the Stati sees ways to reduce

. 13 regional inconsistencies, they ought to do it. We are for 14 improved training and formulation of standard policies that 15 improve consistency. We are always for good things.

16 Positive incentive. A lot of talk about positive 17 incentives. We have not been able to find much, except that i 18 relief of certain administrative chores and need to respond to 19 inspections and so on is a form of positive incentive. We 20 reccmmend that you do more of what you are doing, which is to 21 adjust the frequency of inspections somewhat,. depending on the i

l 22 performance. Good performers. benefit by getting looked at 23 less frequently.

24 COMMISSIONER ASSELSTINE: Would you advocate going 2$ is far.as say you have a licensee that has high SALP ratings,

i e' j 80 1 good history of enforcement and performance, no, say, escalated 2 enforcement actions within the past couple of years, cutting 3 down the number of inspections, say by as much as hali?

4 MR. HENDRIE: Sure.

5 COMMISSIONER ASSELSTINE: And doubling the ones at 6 the other end of the scale?

7 MR. hSNDRIE: Sure.

8 EChairman Palladino left the room.3 9 MR. H E N D'H I E : You are always going to keep a resident 10 inspector at a plant, even 11 it is the finest plant you have

)

11 going, I think. You have to think carefully, at most plants, 12 there is a junior resident as well as the senior residant 13 There is a value in having two of your tolks out there in these

! 14 isolated locations.

15 At a good plant, you might even consider pulling

16 that down to just a single resident. I don't think you are 17 going to go under'a single resident until.you decide to make 18 major changes in the policy adding resident inspectors. You

?

19 are always. going to have one guy wandering around, that is one 20 . sort of more or less full time knowledgeable stati member out

21. there looking at it.

22 COMMISSIONER BERNTHAL: You have to have some good 23 classifications so that you know what a good plant looks like.

24 MR. HENDRIE: I think a s u b s t_a n t i a l cut in inspection -

25 hours for really good performers is' perfectly legitimate.

, ,, . . , . , . . . - - - . . , - ~ . , . - . . - ~ , . - - . ~ . - . - , - , . , . . , , - . , - - .

81 1 MR. FAHRIS; 1 telt we should award tne good 2 performers and the other 10 to 15 percent of non-responsive, 3 those are the guys you really should sap.

4 MR. HENDRIE: The next set of recommendations have 5 to do with details in the design of the policy. There were e questions raised about the way in which you distinguish i

7 between severity levels within a supplement, ways in wnich you 8 compared the base penalty amounts from supplement to l

9 supplement, whether the number ci severity levels could be

-10 changed. By and large, we have found no reason to make any 11 significant changes in these matters.

12 The policies in these regards seems -- things can 4

13 always be perfected. Our leeling was it was pretty decent 14 overall.

15 The one place that we have a recommendation for you 16 that I think is significant is that we think your policy of 17 never mitigating a severity level one is inconsistent and ',

18 ought to be changed. If you have a good performer and he 19 makes a bad slip, you still ought to deal with him on the 20 basis of did he find it himself, did he correct it promptly, 21 wnat has his record been like, and allow mitigation, in tne J

22 same tractional amounts as you do for other severity levels.

23 MR. FARRIS: It also negates the possibility of l

24 assigning a category two award performance. It still keeps a l

f

, 25 relative ranking between the two. We aren't' talking about

!~

_ ~ . . - _ _ -- -- _ . . . -. . - .-- -. .- -- -- .

.c 82 1 that many cases of severity level one.

2 Mk..HENDRIE. I'm running flat out of my litteen 4

i 3 minutes. Furthermore, we are getting to the place where 1 4

I 4 have to go catch an airplane.

i 3 The only other thing I am going to summarize for you 6 out et the' report has to do with the question of should you

? fine, levy civil. penalties against inoividuals. This question i

f 8 has come up. It is a matter of some concern out there in the

. 9 trade. Individuals feel personally vulnerable.

i 10 Our conclusion is for assorted reasons, that we

11 would Itke you to read in our report, you ought not levy civil 1

12 penalties against individuals ever. It they are not licensed

] 13 individuals, they work for an utility, you ought to deal with 14 the utility, which is the licensed entity. The licensed 13 entity then ought to deal with the individuals that it hires, 3

16 trains, supervises, uanages and so on. If you don't like wnat 17 they are doing with a particular individual, deal with it on

18 the basis of dealing with the licensee. It necessary, even i

19 issuing an order, j

i 20 COMMISSIONER ASSELSTINE: I had a question on the 1

! 21 second part of that recommendation not the civil penalty

22. part. I guess I had a concern.about going too far and saying
23 you shouldn't take enforcement actions against individuals.

24 MR. HEbDRIE: Careful, now.

25 COMMISSIONER AE;ELSTINE: 'Other than licensed i

, - , - - - - . - - - - . ,, , , , - ~ _ y.-, ,,m.g,mm,, , , h ,- 7 , . + . . - , ..-.--..--,,,,,,,-,m.- y-, ,ci,, , , , , . . .

83 1 operators 1 Maybe I didn't understand ine recommendation. It 2 strikes me that you may well find yourselt in a si'uation, and l 3 I think if you look back historically, we found ourselves in l l 4 this. situation on the materials licensee *s side of things, 5 where you have conduct-by an individual in the organization

6 that. is so egregious --

? MR. HENDRIE. That makes you. feel that individual '

8 should not continue to exercise authority in a certain area.

9 COMMISSIONER ASSELSTINE: That's 'right. Or at least 10 until he goes through some rehabilitation or training program.

i

! 11 I didn*t know whether you intended to foreclose that kind of 4

~

i 12 action or not.

I 13 MR. HEMDRIE:

No. The language then is not as good 3

J 14 as it should be in the second part of this, which was to say 1

15 that in the case of licensed individuals, the RO's and the 16 SHO*s, that the nature of enforcement sanction ought to be to  !

l 17 reprimand or suspend or revoke their licenses, but not to 18 issue civil penalties.

j 19 COMMISSIONER ASSELSTINE: Fine.

T j' 20 MR. HENDRIE: .It was not intended to say that you

. 21 shouldn*t issue an order to a licensee to remove the manager i

I 22 or someone.

, 23 This runs through the sort at detailed design of the 24 program, the recommendations about the detailed design of the 4

25 entercoment program. There are some.related aspects which i

s-.~, - -; ., _m. _ , , ,,e, _m . _ - - , _ . . _ , - . , _ , -

__-,._A, , _ . , _ ,_,,n, y. , , . ,,my_,, ...,_._%,m.p,y.

9 ya.,rm., y.w pyy,.

c t'

84 1 cover improving and cleaning up technical specifications, 2 devising some ways of evaluating licensee performance, which 3 we hope you will pay some attention to. There are not very j..

4 many esaluation.tcols that we iound to see how good the i 5 program is working.

1 l 6 I think I have run out, and we ought to leave it to i.

7 your questions from here on. Let me say first of all, I ought 8 to give'my tellow committee members a chance to fill in any ,

1

$ 9 place they think I have slighted the cause.

I 10 Colin?

11 MR. DIVER: None. Once.again, you have done an i

f 12 admirable job of chairing the meeting, Joe, 4

13 MR. HENDRIE
T h e' thing to do is to slide along, you i 14. get 90. percent of the business waiting to be done in the last -

4 15 ten minutes or the last 10 percent of the meeting, then you go 16 like hell and get out of .the room before anybody can catch 17 you.

4 l 18 tLaughter,3 ,

1 19 MR. PARRIS: I would add just a couple of comments 2 0 -- for emphasis. I would echo what a fine job you did, and 21 beyond that, call attention that we were rather surprised thtt 22 a system that-is as heavily dependent upon the voluntary i

23 reporting of inspectors from the utilities themselves, 11 the i

24 system did just depend upon the inspectors, the NRC regional 4

25 inspectors, we are in bad' shape, i

1 g ..

80 1 We could not get a nancle on the degree ai 2 accomplishment or cooperation on the part of the utility 3 inspectors. We think that should be taken care of in the 4 tuture, so that we know what kind of job they are doing,  ;

d including the severity level and so forth.

6 From my wantage point at least, probably the biggest t

, 7 inefficiency in the system is it doesn't have any quantifiable i 8 performance indicators. It was a matter of some trustration.

t 9 We were trying to answer some of these questions, that were 10 excellent questions, but we didn't have the data to answer a

j 11 these excellent questions, the impact of the policy on safety 4

12 and so forth.

1

, ~ 13 You are forced to dedl unfortunately with a high 14 degree of sub Jectivity. We know that is addressed here.

15 There are some complex and nettlesome problems. An ettort was lb _

made with these 11 plants to just kind ol' sample the waters.

I 17 There is a lot that needs to be done in that area, in my i

l 18 opinion. I think with the power of modern computers and the 19 state-of-the-art, that you could do that.

l 20 INPO has certain criteria in their system. EDF has 21 criteria. The Japanese have criteria. These criteria in some 22 instances may not suit your purposes'. Selectively, it seems 23 to me you can sort and choose certain criteria, try those out 24 over a period of time. That doesn't necessarily have to be l 25 'done in-house. You can hire competent firms to de that for l

. - - .- - . .- . . . - . . - - - . ~ . .

i 80

'l you, to aid your eticrts 2 As far as the importance goal, I think in trying to 3 3et a handle on root causes, that would be the message I would i

4 like to leave with you.

5 MR. HENDRIE: Thank'you, Jack.

I  !

s 6 I have one last thought to leave with you, and that 4 7 is after a year and some months of being on this committee, .,

?

! B and listening to a lot of witnesses and so on, I have found it 9 very interesting that ncwhere along the line did anyone that I 10 regard as a responsible person in the regulated community, ,

, 11 come forward and say we ought not to have an enforcement s'

12 program in nuclear regulations.

i 13 People who had just gotten through telling you some  !

14 perhaps apocryphal horror story about the terrible NHC, the l

15 miserable things you folks do, nevertheless, agreed that this 16 industry -- that part of the regulatory scheme for this 17 industry-ought to be an enforcement program.

18 As Jack has said, almost everybody out there feels 19 that where people aren't measuring up, the Agency ought to l

! 20 move forward and enforce. I' thought that was a rather

, 21 interesting observation to be derived from a pretty vocal t

22 regulated community that hasn't had a lot good to say about

l. l l

23 a number of the aspects of the program, f

24 Thank you, i

25 MR. DIVER: I might add that some of the utility

, ,-..%r. - - , .r= , - . - , , - > , - - . . , - - - - - - , . , - . , , - - , , - . , .,,.c--, ,,,.,.---,.r,.g.

87 I witnesses even acknowledged tnat on occasion they had made 2 errors, although for the most part they claimed that regulation 3 was a Jood idea as long as it was focused against someone else.

4 ELaughter.]

5 MM. DIVER: I would like to make one parting 6 statement also. In my experience of looking at enforcement 7 programs in regulatory agencies, it leads me to conclude that 8 the enforcement part of the enforcement division or function 9 in regulatory _ agencies tends for the most part to be the least 4

10 known, loved, and appreciated part of the agencies.

11 For one thing, it is not a place where people think 3

2 12 a lot of these sort of sexy issues are being worked on, as in 4

1 13 say rule writing or licensing. It is the place in the agency l.

14 wnere the buck really has to stop. It is the place where 15 people really have to sort of put their money where their 16 mouth is, because at the enforcement stage, that is when you 17 finally decide what-the consequences are of violating your 18 rules, and just how tough you are going to be, after all the

, 19 tough talk in writing rules and press relations and so forth, 20 you really have to make your stand at the enforcement stage.

21 While it may be unloved and unappreciated, it is 22 really crucially important. I have been very favorably i

23 impressed with the enforcement staff that I have dealt with in i

-24 this Agency.

25 First of all, I would like to say that the

e 88 1 eniorcement policy that you have is one of the oest articulated 2 and most thougntful written enforcement policies of the 3 agencies I have studied. It is not perfect and none ever will 4 be. You have as an Agency and the stati particularly, to the 5 extent they have participated in it, have made a very serious 6 ettort in developing and articulating for the public, some 7 sense of what goes on in the otherwise invisible enforcement 8 process.

9 I would hope that you appreciate what you have.

10 COMMISSIONER ROBERTS; That is very kind of you to 11 say that since everybody hates us on every side of the 12 spectrum. I think that is marvelous that you are praising the 13 Statt, 14 COMMISSIONER ASSELSTINE: Tnank you.

15 COMMISSIONER ROBERTS:' Questions's 16 COMMISSIONER ASSELSTINE: I have a comment maybe 17 rather than a question. I want to thank you all for the job 18 you did. I thought the report was quite well done. I don *t 19 necessarily agree with every one of your recommendations, but 20 that's okay. You are not supposed to agree with me on 21 everything. I thought it was very helpful and useful I 22 think the amount of work and ettort you all put into it, 23 without compensation, is commendable. I thought it was a very 24 useful document.

25 Jack, your points on the need for performance

.. ... - - . . .. . -~ . - - .

o 89 1 indicators sad the discussion ataut focusing on rest.causes 2 was very useful and very helpful j 3 We didn't talk about tech specs, but that is another T

4 item that at least you have rung a bell in my memory.

5 MR. PARRIS: You have already recogni:ed the problem.

6 COMMISSIONER ASSELSTINE: Tnat's right, f

'  ? MR. PARRIS: All we did was concur in your 8 recognition.

9 COMMISSIONER ASSELSTINE: It's time for us to i

10 re-visit that issue and find out where we are.

11 MR. PARRIS: Tne industry under the NUMARC, aren't 12 they proposing to do something.on their own? ,

13 COMMISSICNER ASSELSTINE: On tech specs?

14 MR. PARRIS: I heard they were.

i 15 COMMISSIONER ASSELSTINE: I don't think so. I d'o n ' t 4

16 think that is one of the specific areas they have targeted. I 17 think the burden really is on us to deal with that one, since

< > 18 if we are going to make changes in the tech specs, we are 19 going to have to do it.

20 MR. PARRIS: I would suggest that under the basic 21 rationale of the NUMARC committees, we could work cooperatively 22 to identify some of the more priority problems and bring the l

23 best' talent in the industry to bear on them. In my opinion, it 24 you went to them and said, we recognize we have to do something 25 about these tech specs, what can we'get'from you to support us,

+ - - - . - , - ~- p - e- r - - - - - - -

90 1 they rai g h t set up a task force or something like that. It is a 2 possibility.

3 COMMISSIONER ASSELSTINE: That may be useful, 4 although I'would suggest perhaps we get a paper and maybe have 5 a meeting to talk with t .t e Stati on where we are in the tech 0 specs issue. I remember seeing something about it might take 7 ten years to get this all done and have it all in place. I 1

8 would like to re-visit the issue and find out where we are on 9 it.

10 MR. PAHRIS: We just took that from your own 11 testimony.

I l 12 COMMISSIONER ASSELSTINE: But I thought it was a 1

13 very useful product and very helpful. I appreciate the 14 efforts that you all put in.

15 MR. HENDhIE: Thank you very much.

i

^

l 16 COMMISSIONER EERNTHAL: I just want to say thank 17 you, echo Jim *s comment and endorse his comment. It is clear 18 to me that this task was too elementary for you gentlemen, and 19 therefore, I*d like to propose that you take up the Sunshine

, 20 Act'next.

21 [ Laughter.3 22 COMMISSIONER ZECH: Let me thank you also for a very 23 fine job in a very difficult area. I -agree with the comments 24 that'have been made about our enforcement folks. Sometimes it 25 is a thankless job but it is awfully important. And we have l

91 1 to, in my judgment, we have to nave a policy that is 2 reasonable, that does inform the public, that is fair, but is 3 also firm and supporting.our regulttgry policies.

4 So I really do thank you for what you have done.

5 It's a very important task. It attirms what some of us -- our 6 feelings that we've had all along. It will certainly solidify, 7 I think, our ability to at least improve our enforcement 8 program. I'm very grateful to you. Thank you very much.

9 COMMISSIONER HOBERTS: I'll make a quick comment. I 10 commend anybody who is interested in the arcane subject of 11 enforcement policy, an article that appeared in the November 12 30th magazine section of the New York Times. It's entitled 13 "True Virtue," It's by Joseph Epstein, who 's i an author.

14 of numerous books, and among other things is editor of the 15 American Scholar, which is the publication of Phi Beta Kappa.

16 And if anyone cannot get their hands on a November 30th issue 17 of the magazine section of the Times, I would be happy to 18 provide you with a copy.

19 -Chairman Palladino had to leave. I join him. He 20 wants to thank you and there is no need for me to repeat what-21 everybody else has said, We appreciate-it very much. Thank 22 you.

23 MR. PARRIS: We will pass on your kind words to the 24 other committee members.

l_ 25 And on the Sunshine Act, the first drait of the

- - - , - - . ,. -- -, .- , , - - --.. .. ~

I i

9.

I i

i paper I was writing did address that p r o b i e ra , and askec for 2 relief of the rigid interpretation, and explainec. But the 3 collegial process operated and we finally decided to send it 4 -- our basic responsibility.

5 COMMISSIONER ASSELSTINE: So that*s wnat you traced 6 for.

7 MM. DIVER: Now you know.

8 [ Laughter.3 9 COMMISSIONER ROBERTS: Adjourned.

10 [Whereupon, at 4:50 p.m., the meeting was acjourned.)

11 12 13 14 15 lb 17 18 19 20 21 20 i 23 24 25

e '

1 CERTIFlCATE OF CFFlC1AL PEACRTER 2

3 4

5 This is to certify that the attached proceedings 6 before the United States Nuclear Regulatory Commission in the 7 matter of. COMMISSION MEETING

~

s 9 Name of Proceeding: Review of Enforcement Policy (Public Meeting) 10 11 Cocket No.

12 Pisce: Washington, D. C.

1? Date: Tuesday, Decerber 10, 1985-14 15 were held as herein appears and that t h i :s is the original 16 transcript thereof for the file of the United States Nuclear 17 Regulatory Commission.

13 (Signature) ggk (Typed Name of Reporter) QPanela Briggle -

20 21 22 23 Ann Riley & Associates, Ltd.

24 l

25 l

au assa -

, ,1 . . -

+. . ...

S[HEDULTNG710TES' TITLE: REviEti 07 ENFescEMSNT POLlCt SCHEDULED: 2:30 P.M., IUESDAY, DECEMBER 10, 1985 (OPEN)

DURATION: APPROX l-1/2 HRS SPEAKERS: DR. JOSEPH M. HENDRIE COLIN S. DIVER MICHAEL V, HAS, TEN DR. HOWARD L. PARRIs E.P. WILKINSON, CHAIRMAN OF THE ADVISORY COMMITTEE ON ENFORCEMENT POLICY, WILL BE UNABLE TO ATTEND THIS MEETING.

DOCUMENT: NOVEMBER 22, 1985 REPORT OF THE-ADVISORY COMMITTEE FOR REVIEW OF THE ENFORCEMENT-POLICY O

e d

{

I

l 1 g

Q YY Q k k k k kQ 0000 0000 kt h h 00 k k k k kt000 k k0)q0 kg0g0 hpQtQg0gQh)0 &

h )pQgQ} )f)h kqQg(3-.

g , 9/35 TRANSMITIAL 'IO: /X / n,r w t Cbntrol Desk, 016 Phillips k

=c ADVANCED COPY 'IO: / / 'Ihe Public Doctznent Roan cc: C&R

$ FROM: SECY OPS BRANCH tac .

papers)

Attached are copies of a Ctzimission meeting transcript (s) and related meeting document (s). 'Ihey are being forwarded for entry on the Daily Accession List and p1mt in the Public Docunent Itx2n. No other distribution is requested or required. Existing DCS identification nunbers are listed on the individual  :.

doctanents wherever known.

Meeting

Title:

MLaw o b recA n d Mo (cv .

\

i Meeting Date: ( l0- $$ Open K Closed k

l j DCS Copies

! (1 of each checked)

Itsu

Description:

Copies Advanced Original May Duplicate h

To PDR , Docunent be Dup

  • Copy * -
1. TRANSCRIPT 1 1

.. Mien checked, DCS should send a ,

oopy of this transcript to the ,

LPDR for: ,

2. 7 wd 8 Ab4ca Cc 5:r<- l l S ? s,N WU _ ll fn N6 ,

i> '

3.

4. , .

(PDR is advanced one copy of each doctanent,

  • Verify if in DCS, and two of each SECY paper.)
  • Change to "PDR Available."

I l

C l l l f l l f ll l