ML23151A371

PR-002 - 50FR01142 - AD HOC Advisory Committee for Review of Enforcement Policy: Request for Written Comments

ML23151A371
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Issue date:	01/09/1985
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PR-002, 50FR01142
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ADAMS Template: SECY-067 DOCUMENT DATE: 01/09/1985 TITLE: PR-002 - 50FR01142 - AD HOC ADVISORY COMMITTEE FOR REVIEW OF ENFORCEMENT POLICY: REQUEST FOR WRITTEN COMMENTS CASE

REFERENCE:

PR-002 50FR01142 KEYWORD: RULEMAKING COMMENTS Document Sensitivity: Non-sensitive - SUNSI Review Complete

PAGE 1 OF 2 STATUS OF RULEMAKING RECORD 1 OF 1 PROPOSED RULE: PR-002 RULE NAME: AD HOC ADVISORY COMMITTEE FOR REVIEW OF ENFORCEMENT POLICY: REQUEST FOR WRITTEN COMMENTS PROPOSED RULE FED REG CITE: 50FR01142 PROPOSED RULE PUBLICATION DATE: 01/09/85 NUMBER OF COMMENTS: 33 ORIGINAL DATE FOR COMMENTS: 02/28/85 EXTENSION DATE: I I FINAL RULE FED. REG. CITE: FINAL RULE PUBLICATION DATE: I I NOTES ON: ADVISORY COMMITTEE MANAGEMENT OFFICER~IGNED THE ITEM ON 1/3/85 FO STATUS : R REQUEST OF COMMENTS. VOLUME 1(1/3/85 - 7/9/85).

F RC~,~~IJ-:1~.. LOCATED ON P-1.

PRESS PAGE DOWN OR ENTER TO SEEIRULE HISTORY OR STAFF CONTACT PRESS ESC TO SEE ADDITIONAL RULES, (E) TO EDIT OR (S) TO STOP DISPLAY PAGE 2 OF 2 HISTORY OF THE RULE" PART AFFECTED: PR-002 RULE TITLE: AD HOC ADVISORY COMMITTEE FOR REVIEW OF ENFORCEMENT POLICY: REQUEST FOR WRITTEN COMMENTS

. R O P ~ ROLE PROPOSED RULE DATE PROPOSED RULE ECY~JlilER: SRM DATE: I I SIGNED BY SECRETARY: ' 01/03/85 FINAL ROLE FINAL RULE DATE FINAL RULE SECY PAPER: SRM DATE: I I SIGNED BY SECRETARY: I I STAFF CONTACTS ON THE RULE CONTACT!: KAREN D. CYR MAIL STOP: 9604MNBB PHONE:

DOCKET NO*. PR-002 (50FR01142)

, In the Matter of AD HOC ADVISORY CQf,l,tITTEE FOR REVIEW OF ENFORCEMENT POLICY: REQUEST FOR WRITTEN COMMENTS DATE DATE OF TITLE OR 1 r DOCKETED DOCUMENT DESCRIPTION OF DOCUMENT

- 01/04/85 01/03/85 FEDERAL REGISTER NOTICE - 50FR1142 DTD 1/9/85 02/07/85 01/25/85 COMMENT OF LYNNE S. GOODMAN ( 1) 02/13/85 01/29/85 COMMENT OF MARVIN I. LEWIS ( 2) 02/14/85 02/07/85 COMMENT OF STATE OF WYOMING (LYLE D. RANDEN) ( 3) 02/22/85 02/19/85 COMMENT OF STATE OF UTAH, DEPARTMENT OF HEALTH J (LARRY F. ANDERSON) ( 4) 02/25/85 02/19/85 COMMENT OF GEORGIA POWER COMPANY (R.E. CONWAY) ( 5) 02/25/85 02/19/85 COMMENT OF THOMAS STASKAL ( 6) 02/26/85 02/20/85 \COMMENT OF JOHN D. PARKYN ( 7) 02/28/85 02/27/85 COMMENT OF BALTIMORE GAS AND ELECTRIC COMPANY (JOSEPH A. TIERNAN BY J.B. RUSSELL) ( 8) 02/28/85 02/28/85 COMMENT OF EDISON ELECTRIC INSTITUTE (LORING E. MILLS, VP) ( 11) 02/28/85 02/22/a5 COMMENT OF ARKANSAS DEPARTMENT OF HEALTH (E. FRANK WILSON) ( 12) 03/01/85 02/27/85 COMMENT OF DUKE POWER COMPANY (HAL B. TUCKER) ( 9) 03/01/85 02/28/85 COMMENT OF SHAW, PITTMAN, POTTS & TROWBRIDGE (GERALD CHARNOFF, ESQ.) ( 10) 03/01/85 02/28/85 COMMENT OF ATOMIC INDUSTRIAL FORUM POWER PLANT DES.

1 (J.W. WILLIAMS, JR.) ( 13) 03/01/85 02/28/85 COMMENT OF ARKANSAS POWER & LIGHT COMPANY (J. TED ENOS) ( 15) \

03/01/85 02/23/85 COMMENT OF JEAN BERNSTEIN(, 16)

DOCKET NO. PR-002 (50FR01142)

DATE DATE OF TITLE OR DOCKETED DOCUMENT DESCRIPTION OF DOCUMENT 05/20/85 04/04/85 COMMENT OF F.J. LONG, TECHNICAL ASSISTANT, NRC ( 32) 07/09/85 06/28/85 COMMENT OF JOHN M. PUCKITT ( 33)

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- - RIJIE PR ,2/ ,( §)

( bO Pl?., I /4~

2031 Ashley Place Riverdale, GA 30296 June 28, 1985 DOCK ET ED USNRC Karen Cyr, Esq.

Staff Attorney, Office of the Executive Legal Director United States Nuclear Regulatory ConTlliss~on

• as JUL -9 All :30 Washington, D.C. 20555 OFFICE Or SE. Cr~L*,,.., .

DOCKETING & SER VICf.

BRANCH

Dear Ms. Cyr:

As we discussed in our telephone conversation on June 19, 1985, as a result of my review of the transcript of the meeting of the Advisory Cotrn1i ttee on A Enforcement Policy on April 10-11, 1985, I wish to submit comments to the Corrmittee W for ~ i r ..on~

• eration. As we also discussed, for persona1 and career reasons I anticipate *1:11at I will not be a member of the NRC staff after Ju l y 1, 1985, and in any event wish these comments to be considered as coming from a private citizen rather than my present capacity as Technical Assistant to the Director, Division of Reactor Safety, Region II.

Nevertheless, the committee members should be aware that I speak with an intimate knowledge of the NRC enforcement process, having been a Region II Enforcement Specialist for a year and having acted as the Region's Director of Enforcement and Allegations Coordination Staff for two years. Further credibility may be lent my comments by noting that I have been, variously, a Sen i or Radiation Protection Specialist Inspector, Radiation Protection Specialist Inspector, Utility Radiation Protection Assistant Supervisor, Navy powerplant Operator/ I nstructor, and also completed six Polaris submarine patrols aboard the USS John C. Calhoun. This exr:,2ri ence encompasses 20 years of m*i 11 t&ry, utility, and governr.1e :1t empl oymer.t i :-i e,the nuclear industry. It may also be of interest to note that my col lege degree is ~~ . , ~y,&ho i.QJ,JY, and that I have done graduate level work in this field.

I have reviewed the transcripts of the earlier committee meetings, t hough not to the same depth as the review performed on the transcript of April 10-11. I wa*s not moved to comment on the earlier documents or to submit independent comment because I felt somewhat constrained by my position. That is, it seemed inappropriate for me to comment individually when the opportunity existed to relay my comments officially. That opportunity no longer exists.

I propose to go through the transcript in some detail, annotating the comments by transcript page and line number at each comment. All annotation wi11 refer to the transcript prepared by Ace-Federal Reporters, Inc., of the meeting of the USNRC Advisory Committee on Enforcement Policy meeting on April 10-11, 1985, in Bethesda, Maryland.

One further note: I will mention in these comments that I believe information provided to the committee was inaccurate or false in certain cases. I wish to make it clear that in no case do I believe the individual providing the JUL

• 9 1985

Karen Cyr, Esq. page 2 infonnation intentionally tried to mislead the corrmittee or to provide false information. Rather, I believe that the provision of incorrect information resulted from individuals being ill-prepared to respond to the corrnnittee members broad-ranging questions. I suspect that the information was provided to the committee in the spirit of being the best the respondent had available.

Ms. Garde s testimony may be the exception but even then I believe incorrect 1

inf orma ti on resulting from her testimony resulted from her rather unique political/activist outlook rather than any real attempt on her part to mislead the colTITiittee.

Thank you for this opportunity to submit comments, though they are somewhat late.

~m-~

C/J~-hn ~- Puckett

Enclosure:

Comments on April 10-11, 1985 Transcript of the Advisory Corrunittee on the Enforcement Policy

Conments on the April 10-11, 1985 Transcript of the Meeting of the Advisory Conmittee on the Enforcement Policy

2 Page 10, line 22 Mr. Reynolds notes that the enforcement policy is driven by political influence into a proscriptive cookbook approach.

I assume this evaluation is a pragmatic one based on Mr. Reynolds' observation of the enforcement process. In fact, the policy is regarded by the staff as guidance. I have participated in many conversations with IE headquarters and ELD in which the discretionary nature of the policy has been utilized to determine action which did not meet the literal statements in the supplements concerning Severity Level and the policy itself concerning civil penalty amount.

Page 13, line 4 This statement assumes that the staff automatically imposes a $50,000 fine every time a level 3 violation occurs.

In fact, I know of no automatic imposition of any fine during the three years I was involved with enforcement. Any violation with the potential for escalated enforcement was discussed thoroughly within the region by those most familiar with the facility and its management and a recommeridation was developed which addressed the cause of the violation and specifically considered whether a penalty was appropriate. The policy itself requires this kind of discussion and consideration in the section concerning the mitigation and escalation of civil penalty amounts.

Page 22, line 19 The co1TITient indicates that the SALP program is less than objective and still is used in enforcement action determination.

I believe that both of these observations are true. In

~egion II, the SALP rating process is as objective as it can be, and is also rather a fonnal process. Nevertheless:. it results from subjective observations by the region's inspectors and management. It is particularly fl awed in the area of detennination of a utility management's capability.

As an example, a large utility may be regarded as having-outstanding management (whicl=l may well be true), yet a smaller utility with fewer resources may not be so well regarded. I believe that the small size may have a greater influence on this determination than any other factor.

It is a perceptual problem, and inherently subjective.

Incidentally, SALP ratings are routinely used in the process of determining civil penalty amounts and are specifically requested by I EHQ as part of the justification for the region's recommendation for escalated enforcement action.

Page 26, line 6 There is a lack of a data base for Severity Level 4 and 5 viol at ions.

This is simply untrue. All violations are tracked by the 766 computer system. The cormnittee can request any summary

3 data from this system it might feel would be useful. Though the data in any system is only as good as the input, these surrrnaries are routinely used in the region to provide information on licensee performance both as inputs to the SALP process and enforcement detenninations.

Page 32, line 11 A failure to use the enforcement conference to exchange information is cited.

IE Manual Chapter 0400 requires, and it has been practice, that enforcement conferences be held as soon as possible after the identification of an event which may require escalated enforcement action. However, it must be realized that in order for the productive exchange of information to take place, both the licensee and the NRC must have completed the investigative phase of the action. There is always pressure to have the conference as early as possible simply because of the time constraints placed on the staff concerning the timely issue of all enforcement action.

Also, the enforcement conference is not perceived, so far as I am aware, as a forum for the NRC to browbeat the licensee.

It is rather a forum where the NRC says to the licensee that escalated action is under consideration and no final determination has yet been made.

Caution must always be exercised in the provision of i nforma ti on to licensees because the perception that the licensee has been allowed to influence the staff determination of actions must be avoided. The regions have adopted the practice of issuing the inspection report concering the issue prior to the enforcement conference in most cases. This dces provide the licensee with the current understanding the NRC has of the event. It may also contain inaccurate infonnation, but that risk is one taken to permit the free exchange of information. No comment is made in the inspection report concerning the severity level or other character of violations identified. The report, with err<Yrs if they exist, becomes part ~f the public record and further fonna l correspondence is issued to correct the errors as necessary.

Page 33, line 14 Mr. Reynolds suggests it would be a good idea to let the licensee see the proposed enforcement action, notice of violation and, the proposed imposition of civil penalties before the press release comes out.

This option is fraught with danger. The agency must avoid the impression by anyone that the licensee has had an opportunity to change or influence enforcement actions.

What does happen is the circumstance he describes. We do send a telefax of the action to the licensee ilTITlediately prior to the issue of an action and the press release and hold up the press release for about three hours in order to

4 permit the licensee to prepare a press release of his own.

It must be realized that the licensee already knows all of the details of the event, its safety significance, and probable severity level (he can read the policy as well as the staff can). What he does not know is the penalty amount if there is one, what mitigation or escalation factors were applied, and the actual date of the rel ease of the information to the press. The intelligent licensee can easily prepare all of his corrnnents except for this information and when it becomes available, compose the remainder of his press release in a very short time.

Page 36, line 6 Dr. Hendrie suggests that mitigation for good performance..

would encourage better performance by licensees.

I believe this approach has already been implemented by the current policy. However, it is not the nature of the press release that does the real damage to the utility~ it is the fact that a press release occurrs at all. If the licensee has done something that warrants escalated enforcement action, _then airing it in the press is damaging. I do not propose that the public not be informed when a licensee errs, but it must be realized that the perception of the NRC by the public (fostered by the likes of Ms. Garde) is at best uncomplimentary. The commission is regarded as pro-industry, sometimes incompetent (do you remember the comparison by the President's Corrmission on TMI which likened the NRC to a high school girl's field hockey team?)

and generally unresponsive to the desires of the public.

Thus, when the commission takes strong action, the public assumes that the event was a near disaster. When mitigation is given, the pub~ic assumes the NRC is in bed wiU. the licensee. It really is a no-win situation.

- Page 44, line 23 We have told the operators, in words of one syllable, that they are in an environment where anything they do can threaten their security, their professionalism, their--

competency and, above all, their integrity.

I both agree with Mr. Burstein, and disagree. I remember attending an extraordinary enforcement conference at Plant Hatch, led by Dick DeYoung, where this message was clearly given to the licensed operators at a special meeting. The event related to absolutely improper actions taken by senior operators and the operators in the control room and involved improper manipulation of the control rods. In fact, post-evaluation of the event indicated that the reactor was probably not placed in serious jeopardy~ but the actions of the operators were greviously improper. Mr. DeYoung was tough, and very clear about what the NRC expected from the licensed individual.- As a result, I believe that the individuals did believe their security,, professionalism,..

competency and integrity were threatened. But in the final

5 analysis, the NRC took no action against any operator involved.

I question the validity and worth of licensing operators at all unless they are held accountable for their actions, or inaction .. I have been an operator, an instructor of operators, and an observer of operators for some length of time. It really was a combination of poor training and simple operator inattention that melted TM!. Some may say that is simplistic, but Admiral Rickover was occaisionally correct: almost any error can be reduced at some point to personnel error. High standards lead to high morale, competence, professionalism and outstanding performance.

Inherent in this fonnula is both personal and professional responsibility and without them, error is always blamed on others.

Operators earn a relatively large amount of money. though it appears consistent with their training and the responsibility they bear for public safety. The comparison to licer:ising pilots seems quite appropriate. However, when a pilot errs, the FAA may very we 11 ground him. The FAA also seems to have the respect of the public despite the press play given aircraft accidents. Perhaps the NRC could learn a lesson here.

Page 46, line 6 There are very few people who are going to stay in the business on the basis of the onerous threat of having penalties against individuals.

I wouldn't propose penalties against individuals, but rather i*e:move or suspend their licenses until such time as they demonstrated a capability for safe operation. Mr. Burstein says the selection and training of the right people is a utility responsibility. I certainly agree. Nevertheless, the responsibility for their perfonnance is ultimately their own. To believe otherwise is naive. As an example, reca11 what has personally happened to the operator at the controls of TMI when the accident occurred.

Page 47, line 3 There are no poor perfonners on an absolute basis. The NRC would have lifted their operating licenses by now.

I believe this observation is correct. However, I also believe that it would take a catastrophe on the order of TM!

to convince the NRC that a utility licensee was sufficiently bad as to require a 1icense to be revoked or suspended.

Absent a pivotal event, by the time the staff had debated the issue sufficiently to conclude operation should be disallowed, I believe the crisis would have passed into history. What happens in actuality is that the licensee gets a telephone call politely suggesting that he voluntarily suspend operation until he has met the NRC

6 requirements for restart. This method ensures all the responsibility for the continued operation of the facility rests with the licensee and the NRC staff is not placed in the uncomfortable position of having to fonnally reaffirm the safety of the facility. Restart is based in this type of case on whether the licensee has accomplished certain actions, not on a judgement of his capabilities. This may seem a subtle difference, but it is not really so obscure as it appears at first blush.

Page 59, 1i ne 1 The safest operating plant is the one that is operating all the time at full output.

A powerplant is a multi-billion dollar machine designed to do just one thing: run at full output. Taking this statement at face value, the rest of Mr. Burstein s corrrnent 1

is indeed valid. However, it is also unrealistic. The nature of machinery is to fail. The best operators are those who expect failure and anticipate it by looking for its precursors.

It is true that the data will show the high capacity factor facilities do have the fewest violations. But it must also be remembered that violations are symptoms rather than stand-alone events. Furthermore, because a plant is designed to operate the opportunity for violation is less during operation than when shutdown: less work is ongoing and there is less opportunity for personnel error.

Page 59, line 22 Standards are applied where they should not be applied.

True. Nevertheless, by making rE.qui rements less specific the opportunity for endless debate as to their meaning might ultimately make them worthless. This problem invokes a fine balance. Also, I have heard utility executives say, in utter frustration, that they only wanted the NRC to tell them what the agency wanted, to be specific, and then let them go accomplish it.

Page 68, line 1 Early plants like Connecticut Yankee have not had civil penalties.

I worked at Connecticut Yankee for a period of time as a consultant in the mid-70 s. The facility was operated at 1

that time with, I believe, a staff of 70. The operators were cross-trained in the Navy fashion and the facility esprit-de-corps was the highest of any I I ve known. It should be noted that each individual took personal pride in and felt responsible for the performance of the plant.

Contrast this with the concern about NRC sanctions against errant operators. These people would have been disappointed had they escaped punishment for poor performance.

7 Page 69, 1i ne 9 Palisades violations would have been violations at Big Rock Point.

I can assure the Connnittee that I can find a violation for just about any impropriety at a power reactor facility. The Severity Level of a violation is dependent upon its probable consequences, not the requirement itself, so that a fine could be imposed for failure to place a period at the end of a sentence in an obscure procedure. This is a rather far-fetched example, I know, but still possible. This con ten ti on both supports and contradicts the argument for less proscriptive regulation. The relatively small fine issued for the TMI event points out the problem (though_ I know the policy provided only minimal penalties at that time). There is simply no requirement which states that the licensee shall not be stupid, however much individual members of the staff wish such a requirement did exist.

That, I suppose, would be the ultimate nonproscriptive requirement.

Page 77, line 9 There a~e inequities presently between the supplements.

Mr. Vande Walle has hit on one of the most sensitive areas in the present policy: apparent parochialism. Each disci-pline in the agency believes itself to be the most important.

NMSS feels more important than NRR. Within NMSS, Safeguards feels more important than materials. And so forth. This is perfectly normal. If there weren't interdisciplinary squabbles of this sort, I doubt you could find a professiona) in the agency. It is the nature of the beast. Nevertheless, at some point calm and cooler minds made the decision which set the severity levels and there ~as indeed a r~tional2 which I believe excluded these petty concerns.

What may be less obvious is that this is a place where outside pressure did exert itself. It is commonplace for

'public concern' (not public safety) to be cited as the-reason for the very strict categorization of radioactive materials violations. Similar reasons are given for the probabalistic nature of the radiation exposure categories.

I cringe each time I hear severity level related to safety significance. It is only remotely related.

But that does not necessarily make the severity level categories in the supplements inequitable. I believe they closely reflect the actual impact on the licensee that the events themselves have. This is because the impact is related to the public perception of their significance, rather than to some absolute. It is a rather pragmatic standard, therefore.

Finally, this implies that the NRC is in the final analysis

8 a rather reactive organization, at least in regard to public opinion. This should come as no surprise to the Committee.

It would probably be better if this was not the case, but if I could solve this problem, I could sway public opinion on any topic. I cannot.

Page 82, line 21 Many operators felt that action taken which was not in compliance was reasonable.

To condone this attitude is inexcusable. To present this attitude in this forum is to lend it credibility which it does not deserve. There are always options available to the operator which do not involve noncomp1iance. I believe that before an operator chooses this option, he should shut the plant down.

To be fair, I should note that Mr. Hasten did make this point obliquely. But it should also be recognized that even if in this circumstance the Technical Specifications were inadequate, provisions exist for safe operation of the facility___ (a phrase which may include shutdown as a mode of operation) without violation of NRC requirements.

Page 92, line 19 The licensee was criticized for his adversarial attitude.

The licensee is not in a position to detenni ne severity level. Neither the inspector nor the licensee should have discussed severity level at any time.. The inspector's function in enforcement is the identification and substantiation of noncompliance and also to recorrmend to regional management a severity level. Regional management then will r,1ake a determination as to uhether the event warrants escalation. Both the inspector and the licensee were outside their responsibility and authority and it is not surprising that the region felt the licensee was being adversarial. The licensee had tried to dictate to the region what action the region should take--a wholly improp*er action for any licensee. It really is unfortunate that Mr. Vande Walle fails to understand this point. Until he does, it will recur and the SALP will continue to reflect it, I suppose.

Also, implied in the discussion of this issue is that it may be improper for the NRC to cite violations which have been identified and corrected by the licensee. The policy does allow for non-citation in cases where five factors have been satisfied, the remaining three being: severity level 4 or 5, not a repeat violation, and adequate corrective action to prevent recurrence. Even should all five of these criterion be satisfied, the NRC may still exercise discretion and cite for other good reason.

9 Page 93, line 10 The policy should be taken out of the hands of the inspectors.

Ms. Axelrad was not significantly responsive to Dr. Hendrie's question. In this case the inspector was clearly in the wrong. IE Manual Chapter 0400, written by Ms. Axelrad and the staff, specifically states these responsibilities.

Page 109, ff Concerning ~y attitude about Ms. Garde.

I feel I need to be clear about my attitude concerning Ms. Garde. I have absolutely no use for crusaders who use her techniques to attempt to effect change. I know very well how she obtained some information at Catawba, through threats to workers' families, and her Machiavellian tactics are we 11 known to the NRC staff. That should make my viewpoint on her testimony subject to bias, and therefore I 11 attempt to be merely factual unless I find I must 1

comment.

Page 110, line 13 Almost nobody gets civil penalties in Region II.

Untrue. The record clearly shows differently.

Page 110, line 17 Those civil penalties issued in Region II were against the desires of the Regional Administrator.

Untrue. James Patrick O'Reilly participated in the determination of every civil penalty during the time I was acting as Director of Enforcement in Region II, concurred in the issue of every one, and signed out level III violations when that authority was delegated by the Director, IE.

Region II often voiciferously disagreed with IEHQ on both Severity Level and penalty amounts, but that kind of discussion is both the perogative and duty of management.

It produces the best product available for the protectiori-of the public health and safety.*

Furthermore, Mr. O'Reilly was the driving force behind the enforcement actions taken at Brunswick, as he was the force behind everything in Region II. Those on the* Cmmiittee who know him also know that any other situation is impossible.

Page 111, line 11 Admiral Wilkinson asks Ms. Garde to repeat *.*

I find it unfortunate that the transcript cannot carry with it the tone of some comments.

./

10 Page 112, line 19 Back-door maneuverings take place on both GAP's part and the industry's part to either avoid or get a civil penalty or some type of enforcement action.

I am surprised to find Ms. Garde admitting to the committee that GAP engages in so-called back-door maneuveri ngs. My earlier comments would indicate I suspect GAP to be expert in this area, but doubt that her judgement about the utilities' activities is as accurate. I have found utility action straightforward and proper.

Page 121, line 8 The welder isn't aware that he is in violation of a particular code.

Perhaps not. But that is a violation too, in addition to the simple procedural violation. The licensee has a responsibility to provide qualified workers to construct the plant. Ms. Garde appears to be an apologist for inadequate perfonnance and lack of professional ism. I would suggest that this is an example of her true outlook.

Page 123, line 13 Mr. Showhet suggests that some managers play a little fast with the regulations or procedures.

If this is true and Mr. Showhet knows of examp1s, why isn't he forthcoming with that i nforma ti on? This is innuendo, another tool of Machiavelli.

Page 156, line 4 Mr. Knuth suggests that automatic fining be eliminated.

What the policy calls for is automatic consideration of a fine for severity 1£vel I, II, or III and repeat !V's. No penalty is automatic because of the requirement to consider mitigation factors. These can include, for example, up to 100% mitigation for good prior perfonnance.

Page 158, ff Exposure of a member of the Advisory Committee.

It really is a pleasure to see, on the record, some humanity.

Page 168, line 23 Mr. Denton suggests there is a tendency to add extraneous violations in order to increase a civil penalty.

It has been my experience that when the staff has exercised its managerial judgement and detennined that a licensee has a problem that goes beyond a single event, the Notice of Violation has a tendency to look as though it is a laundry list. The NOV should provide infonnation about how a specific violation failed to meet regulatory requirements, but I believe it should remain a fairly pristine legal document. The place-for editorial comment is in the letter to the licensee management. That is where the picture is

11 drawn in order to depict the staff evaluation of the basic cause(es) of the violation(s).

Page 173, line 24 There exists some sort of headquarters momentum which mandates civil penalties.

This is not quite correct. The dialog which goes on between IEHQ, ELD and the region is lively and productive.

Nevertheless, it must be remembered that the Director, IE has the only authority to make the final determination, short of the EDO or Corrmission.

Page 243, line 13 Mr. Williams cites a 15 percent attrition rate at Turkey.

Point Plant and attributes this figure to pressure brought to bear by individuals being licensed.

Turkey Point is an interesting case. Some years back, J.P. O'Reilly signed out a civil penalty for $40,000 to FP&L for an operator not being at the controls (he had left the contra l room to get a cup of coffee without proper relief)~- I personally interviewed 40 or so plant employees in September, 1984, to try to ascertain what was causing the many procedural and other noncompliances at the plant. What I discovered was that the all employees, not- just those licensed, were very unhappy. They felt that FP&L was not interested in anything other than producing power. I believe this was a misperception of FP&L's intent, and a result of very poor communication. Subsequent to that time, I believe matters have significantly changed as a result of the NRC imposed improvement program and other FP&L efforts at the plant. I would also suggest that Mr. Williams' attrition rate figures have changed for the better as a result.

- Page 247, 1i ne 2 Enforcement conferences were like a trial, an inquisition.

Having attended almost a11 of the enforcement conferences referred to, I feel qualified to comment. The lack of preparation, inadequate corrective action, and poor attitude of FP&L personnel in these conferences might well have made the process seem sadistic to FP&L. What did change was FP&L' s attitude toward the regulatory process. When that happened, communication began.

Page 251, line 14 Good words in the letter would be helpful.

That letter, and all others which have mitigation in them, have an explanation of the amount of mitigation and why it is being given. The region has always been very careful to give credit where credit is due. Some of the most lively discussions with the headquarters staff arise over this point.

12 Page 255, line 25 A difference in inspectors is cited.

Absolutely correct. It happened at Turkey Point. It must also be recognized that the nit-picking inspector described is an excellent inspector, while his predecessor left something to be desired. That is why the current inspector is perceived as being a nit-picker.

Page 263, line 22 Brunswick's large (550K) fine.

The corrmittee should read the transmitta 1 letter for this one. It points out that though the duration of the violation was of concern, it was the failure of the licensee to implement the basic check and balance system to detennine whether surveillance requirements were being met which elicited the large penalty. Though it is not mentioned in the transcript, it is my recollection that CP&L, at the insistence of Region II, did an evaluation which revealed over 250 additional examples of inadequate surveillance procedures.

Page 264, line 15 Brunswick's vol~ntary shutdown is cited.

It should be noted that the shutdown was voluntary in that CP&L was given a choice: you do it, or the NRC will. CP&L graciously saved the staff a lot of paperwork.

It should also be noted that the staff did not impose at least one other civil penalty because of the improvement program.

Page 274, line 24 Failure to ?r01ide a ~rocedure is a violation of 10 CFR 50, Appendix B.

Perhaps. But a more appropriate citation is against the licensee's own technical specifications, typically section 6.8.2. ..

Page 310, line 1 At an enforcement conference in Region II, the region did not seem to be aware of the approval of the relief request for isolation of the vessel head vent.

The region was most certainly aware. Moreover, the following paragraphs indicate that Mr. Stewart still did not unders ta nd the problem. The relief granted concerned the electrical isolation of the system, an action which could be changed by reinstalling fuses outside the containment in the event of an accident. The $40,000 civil penalty, though concerning the same system, resulted from the isolation of two valves located inside the containment. A material false statement citation was considered in this matter, but the issue was too unclear to pursue.

t' 13 Page 314, line 2 NRC misstated the status of the reactor vessel vent system.

Not true. Mr. Stewart appears to have been poorly briefed.

Page 324, line 25 VEPCO was charged with a material false statement concerning the reactor trip breakers.

Yes, they were. They submitted a letter to the NRC which falsely stated that all the vendor recommendations had been incorporated into plant procedures when they had not been included. Some of the ones omitted involved the proper lubricant for use on the breakers, a factor identified as a contributor to the Salem event. Mr. Stewart indicated that he was personally shattered. I wonder if he ever recognized how poorly his employees performed on this issue.

- Page 331, line 5 Admiral Wilkinson says that Mr. Henry is a good spokesman.

Indeed he is. He is also in daily contact with the plant and und~rstand its problems, unlike some utility VP s. I 1

recognize that may be a bit scathing, but I have seen it again and again both at the plant and in enforceme~t conf-erences. Revealingly, the NRC staff will provide important details at the conferences which come as a complete surprise to upper level utility management.

Page 346, line 18 Enforcement conferences are one-way.

They are two-way exchanges of i nform_ation, as described previously. This characterization is unfair and seems overly defensive.

AGR*ua,r, UNITED STATES NUCLEAR REGULATORY COMMISSION ( ~

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REGION 11 101 MARIETTA STREET, N .W.

ATLANTA, GEORGIA 30323 April 4, 1985 OOLKET[;

USNR C MEMORANDUM FOR: E. P. Wilkinson, Chainnan, Advisory Committee for Review of Enforcement Policy FROM: F. J. Long, Technical Assistant to the Regional

• as HAY 20 AlO :06 Administrator GFFICE OF SELkt 1-1 ~.

DOC KETING & SEf/V1f;f

SUBJECT:

FEDERAL REGISTER NOTICE JANUARY 9, 1985 BRANCH AD HOC ADVISORY COMMITTEE FOR REVIEW OF ENFORCEMENT POLICY; REQUEST FOR WRITTEN COMMENTS This memorandum is in response to the request for comments published in the a.) anuar,l' 9, 1985, Federal Register. My comments are not intended to represent the

. ,iews of Region II. I have previously requested and still desire a.n opportunity to address the Commission and/or the Advisory Corrrnittee regarding NRC enforcement policy and practices.

Enclosure (1) contains brief* comments in response to specifi c questions in the FRN. Enclosure (2) contains additional comments on questions raised by the Advisory Committee. Additional related comments are contained in Enclosures (3) through ( 5). Compounding enforcement problems is the fact that the_re are effectively four separate enforcement policies under consider ation at the present time. In addition to the basic policy, there is a policy on Material False Statements, a Policy on Vendors and a Policy on Fire Protection. It is presumed that these four policies will eventually make up a new basi c policy of Part 2 Appendix C and will have been reviewed by the Advisory Committee beforehand.

Attention is invited to the fact that I served on t_.he task. force that developed he po l':t,y ,published in f.arch 1982 and feel c~mpE:!tent to .cormneni:. on the original

• ntent of the policy and subsequent experience in its use. Because the March 1982 policy was never used as intended, I question the vali dity of claiming experience gained in use of that policy as a basis for the changes proposed or incorporated in the March 1984 policy. The March 1984 version as a mor.e negative . policy and like the original policy has not been implemented as -

intended.

To begin.-* ~i th, the March 1984 policy ch.anges were not mi nor as stated in the FRN.

. They were kxtens i ve and appear to have been des ,gned more to support past 1

l..

arbitrary practices rather than address the serious problems actuall y encoun-tered. If we are to head off serious safety consequences, an entirely new approach to enforcement will be necessary, including provisions in the policy for ensuring compliance by NRC managers and prohibiting wholesal e deviation from the policy. Obviously, !the effectiveness of any policy cannot be measured if the policy is not implemented in the intended manner.

If the Corrrni ss.i on is very s*eri ous about safety, then it will consider as many positive in.centives as can be developed to encourage licensees to find and

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Secretary for the Commission 2 April 4 , 1985 correct violations without fear of punishment. At the same time, NRC will also consider abolishing all negative incentives. By punishing licensees for finding violations, disgruntled employees may be encouraged to 11 set.upn safety violations either to seek recognition for finding them or to "get even" with their 11 11 employers. The NRC record is not good in this regard, since the vast majority of escalated enforcement cases_ are the results of licensee identified and reported violations for which NRC deserves little or no credit. The fact is the more 5

effective a licensee 1 s program for finding, correcting and reporting violations, the more escalated enforcement he will be subjected to, the worse will be his enforcement history, and the worse will be his SALP rating. This will be in spite of the possibility that this licensee 1 s facility could be the safest of all, the licensee having found and corrected those violations.

The case record will show that escalated enforcement has been essentially

~unitive and arbitrary. This is demonstrated by extreme nonuniformity and

• diverse treatment in similar cases. Ultimate Severity Levels and the number of separate violations are often detennined after a civil penalty amount has been arrived at. Although Federal -law places a limit of $100,000 per violation per day on civil penalties, itjppears this limit is being routinely* circumvented.

Likewise the $100,000 limit is routinely imposed for Severity Level III violations, equaling the most severe penalty (Level I) and exceeding the second most severe (Level II). As an example, in one case, a Severity III violation was described as so serious that the maximum penalty was imposed. This is totally contrary to the purpose of assigning a Severity Level. Another significant deviation from policy is the practice of aggregating violations to produce* a higher Severity Level. This is not a provision of the policy except where willfulness is a factor.

I will be happy to discuss these co1T1T1ents directly with the Advisory Corrmittee.

~9~----

F. J. Long Encl osur*es:

1. Corrments on FRN 1/9/85

2. Corranents on Enclosure, to SfCY 84-479

'I,.._ 3. Memo dtd 12/14/81 to J. O'Reilly

4. Memo to files dtd 11/05/84

5. Statement (

ENCLOSURE 1 Enforcement Policy CoITITlents Group 1

1. The required QA programs are adequate and do in fact result in licensees finding and correcting problems. What is missing are the positive aspects whereby licensees can avoid escalated enforcement by virtue of having

- effective programs. The policy has been negative in this regard.

2. Most violations which ~e reported, are only reported because of specific reporting requirements for the events. - Events may either be caused by violat'ions or they may result in violations. All violations- a.re not in themselves reportable.

3. Violations appear to have been reduced in number; however, nescalation of 9* enforcement" cases remain high, due to more stri nge*nt interpretati ans and application of'the policy as well as circumvention of policy.

~-----

4 . . No industry can equal the safety record of the nuclear industry. Much.of t .

the:. p~l ic perception of nuclear safety comes from the media,. not from the I

I I

l existence of real safety issues. NRC over reactions to events likewise may cause some undue public concern about safety. Over enforcement>> unnecessary 1

escalation, and our overreaction to minor violations contribute to percep-

.tions of poor safety records.

2

5. The policy as implemented, definitely has had and continues to have an adverse affect on licensee and employee morale. This is particularly true of licensed op~rators who are still bidding out of nuclear plants. What employee enjoys reporting a violation if his employer is going to be hit with a massive punitive fine plus incur the wrath of the public service commissions?

6. The general public has little, if any, knowledge of NRC enforcement policy.

- Licensee employees and their families have reduced confidence in the policy.

Many NRC employees also have reduced confidence in the policy. The only confidence expressed p~QJicly is expressed by the media _and intervenors when enforcement pleases them and creates headaches for a specific licensee.

7. Experience shows that disgruntled workers and exworkers are all too willing to make allegations. Members of the public (other than antinuclear groups and disgruntled former employees) seldom if ever make al 1egations. The better and more loyal employees report vi0lations to.their management first.

The enforcement policy as implemented actually is a negative influence in this* regard.

t 1

'i

~- Group 2

1.

• The civil penal~y levels are not appropriate. The same severity levels do

.not have the same safety significance in different functional areas.

3 Materials licensees have much harsher treatment. LSA is supposed to be harmless but civil penalties are common for relatively minor safety problems. Also since most civil penalties for Severity III violations exceed the penalties for Severity I or II, why have a table? Most civil penalties are arbitrary, anyway. The Severity III violation is the worse since the civil penalties average many times higher than all other severity levels.

-* Adjustments are mostly upward. It is extremely easy to adjust a penalty upward but extremely difficult to adjust it downward. These adjustments are arbitrary in most cases_._ Terms like "only minimally acceptable" corrective are used frequently to avoid reduction while "extensive corrective actions" which often are* beyond necessity, are corrmended. Corrective actions should be adequate, not far beyond necessity, as a condition of mitigation.

3. The most severe classification is typically .used. Although* the policy

-- accommodates severity classification adequately, many examples of excessive severity level selection exist. Supplements VII and VIII contain exampl~s of severity. levels which are extremely over classified.

• I

{

4. The~- MF:'$ pol icy needs a complete *reversal. The VEPCO standard should be

.* I

~- abolished. The term MFS should only apply to deliberate cases whether oral or written. No escalated enforcement however should ever result from honest

(

errors or omissions. Although theses may justifiably be labelled

violations, they should be of severi.ty level that would preclude routine escalated *enforcement action.

4

5. Negative incentives are overemphasized while positive incentives ar~.

minimal.

6. There is no set progression of enforcement sanctions in practice, as described in the policy. The policy shows an order to be more severe than a civil penalty. However, the two sanctions are often *reversed and likewise, both sanctions are often applied initially without clear justification for not using the progression policy. Another problem is in -cases sent to DOJ

- for possible criminal action. Referral to DOJ should be a type of progres-sion, but instead it is always in addition to punitive actions taken before or after the DOJ referrAJ or DOJ disposition.

7. The enforcement conference is a desirable feature of policy and in itself, is a deterrent to most violations because it is costly to send managers away from their responsibilities--c6stly in time and money. However, the enforcement conference is utilized in practice, more to set up escalated

- enforcement actions than to understand and evaluate corrective measures. We should instead, consider foregoing punitive fines following most enforcement conferences unless the proposed corrective measures are inadequate or* k*nown to be ineffective.

News releases are actually punitive as are fines in many cases. It is unlikely that licensees will look at the scheduling of news releases as

(

being anything other than self-serving and punitive.

5

8. Sup~lement VIII, to my knowledge, was not reviewed in the Regions. It ~as one of numerous, so-called minor changes to the policy. It is entirely inapp~opriate in the way it is written and contains examples of violations which in no way bear the safety significance of assigned severity levels.

It gives the impression that under or over classifying are equally serious and there is no way the licensee can win. Likewise, the wording appears to have been selected to protect NRC from criticism during or following a plant emergency.

Group 3

1. For willful violations, licensed individuals should be punished by license suspension or revocation, depending on degree of materiality. Civil penalties should never be used by NRC against individuals. For criminal actions, referral to DOJ is appropriate and adequate. Likewise, licensees should generally not be punished for deliberate, acts of their employees.

2. Regionalization has had essentially. no effect on enforcement since thi~*

function. has not been regional ized and is retained under Headquarters-control 6n all enforcement escalation. Considering the tight control t

exeTci~ed by IE, enforcement should be relatively uniform. To the contrary, I

I l.

however, nonuniformity has resulted mostly from.the diverse treatment of similar cases by IE.

3. .: The stated root causes are mostly speculative. They are seldom va 1idated.

Within documentation,packages on single cases, the root causes may often be

6 conflicting and meaningless. The stated cause may often be no more than a cliche'.

Lessons learned, if any, are seldom formally promulgated to the industry as such. All licensees probabl_y review all significant enforcement actions but it is questionable whether any lessons to be learned are clear~

-4. Licensee self-identification has never been a problem. Essentia11y all e serious violations are in fact identified by the licensees, corrected and reported. Unfortunately, most escalated enforcement results from these{

licensee-identified and_reported violations. Greatly increased reliance can and should be placed on licensee initiatives in this area; however, with

~easonable assurance that NRC will not stifle enthusiasm by prompt esca-lation of enforcement. Theoretically, the more violations that are identi-fied and corrected, the safer ttte plant will be.

t i

. ... ....... . . ... . . .. , .- ENCLQSURE 2... _,. ... ,. ***- -* ...

UNITED STATES NUCLEAR REGULATORY COMMISSION

REGION II 101 MARIETTA STREET, N.W.

ATLANTA, GEORGIA 30323 JAN 11 1985 MEMORANDUM FOR: James P. O'Reilly, Regional Administrator FROM: F. J. Long, Technical Assistant to the Regional Administrator

SUBJECT:

ENFORCEMENT POLICY The following are my comments on the ten limited issues identified in the letter from the* Chainnan of the Enforcement Policy Review Committee to Mr. Dirck.s dated 9 December 19, 1984, enclosed with SECY-84-479 dated December 21, 1984.

1. The Corrrnission should be primarily concerned with safety and accord-ingly, any and all incentives of a positive nature should be heavily emphasized in Commission policy. The attitude prevailing i~ the Com-

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• ** * . . . * . ihe fact.is that the compl, ance *.record of the nuclear industry has* . _

• * ** 0 =-. *.* ,. *.. *great1y *-improve6:-crn'ti *-c6nt'tnues tu 'ne-* fa-t (-b~tt-e*r*:than .-'a*ny:ut~r- -imftistry**~- .. , *_ * -

in the United States. At the same time, that positive*incentives are

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2. The table of civil penalties is not appropriate. The practice has been to impose the maximum civil penalty that can be arrived at without regard to severity 7evels and base penalties in the table. Since the same severity levels are not of the same safety significance in dif-.

ferent funct1onal areas, there is no unifonnity or logic*to the dollar*

values. A low SE'verity violat_ion at a power reactor may be a higher .

severity violation under materials* or transportation. Civil Penalties for Severity Level III violations e.g., often exceed the civil penal-ties for Severity Level I and II violations. __ _

3~* Prompt reporting of violations identified by the licensee and promptly corrected, should seldom if ever result in escalated enforcement (civi-1 penalties). While criteria need not be the same for all severity

• 1 levels, the concept of automatic civil penalties should be abolished.

,/, '

~ 4. iMinor violations should be resolved at the lowest level possible within

~- the Commission. Minor violations have often been the basis for poor S.ALP ratings which makes the term 11 mi nor" c. misnornt'r. We should eliminate minor violations from all SALP evaluations and all escalated enforceme.nt. Minor violations should general1y be resolved at the inspector level, being reported routinely along with descriptions of-adequate corrective actions, in the inspection reports.

Jam~s P. O'Reilly 2

5. For licensed individuals, willful violations should be punished by suspension of licenses either pennanently or for some set period of

• time. Civil penalties should never be used ag.2inst individuals.

whether or not they are licensed.

6. Regionalization has had little effect on enforcement since this func-tion has not actually been. decentralized. Nationwide consistency (unifonnity) of enforcement is certainly both necessary and desirable to the extent that the enforcement policy must be applied unifonnly by all. However, there has been a noticeable lack of unifonnity between the Regions and Headquarters in applying the policy. Flexibi 1ity in use of the policy has been promoted by Headquarters offices which has*

been little more than a scheme to abandon the policy and treat each case separately.

7. The stated root causes are seldom validated.* Within documentation packages on single escalated enforcement cases, the stated root causes

.*---~ ....., -*=***'*..,are.._ott~ri ..cq.rifl,.i,ctjrg ~,09 .mea~fo.9le~s..- ... 1qq _9f.:t.,en._:tJ:i.e .. :1;~~t. ~a,µs~--~- ~--*- * *.... .,. ..

- - * *. sfated, :is* no more than* a clic"fie' *. Licensees sometimes wonder just- . **. *

• * -**;, **--*~ -'*-~ **: * *_. -what *ife* mean. *-*tess-011s -learned *i-n *enforcement-reases*~-~-!'ff :any~ **-e.re*-~e~ dotn*;f ~.- ::*-.: * **

generalized to the industry.

'*i-~; *::~~---.L. * *a-.= : T-ti"e('tmC-;.MFS *:po licy-*1 ~ . -"t~tat1y=~;neff~tt:*f~e---*ah'd fra§."-b~-=ihne~~t~ttiy~~*~-~ ~:(*~ ~-

abusive. Merely limiting the use of the term to Severity*1-*violations

• will *not.eliminate the abuse. Civil penaltjes should seldom, if ever, be imposed for unintentional errors or omissions whetber written or oral.

9. Licensee self-i,dentification has never been a problem *. Essentially all serious violations are in fact identified, corrected, and reported by the 1 i censees. Mcst esca 1 :1ted enforcemerit results from 1i censee identified and reported violations.* Gre*atly increased reliance can and should be placed on licensee initiatives in this area, however, with assurances that NRC will not stifle ent_husiasm by prompt escalation__ of enforcement. The more violations that .are identified and corrected,

• • the safer the plant will be. * *-

10. I do not know what system, if any, we are using. If we are using-such 1

a system, then it has not worked and changes are certainly required.

<. t

~ In surranary,' in my opinion the enforcement policy has* not worked well. It is, in

~ fact, time for a complete change in policy.

'-.:::::::::--:~~¢~----------

F. J. Long

ENCLOSURE 3 UNITED STATES NUCLEAR REGULATORY COMMISSION REGION II 101 MARIETTA ST., N.W., SUITE 3100 ATLANTA, GEORGIA30303 MEMORANDUM FOR: James P. O'Reilly, Regional Administrator FROM: F. J. Long, Assistant to the Regional Administrator

SUBJECT:

IDEAS ON REGULATORY REFORM In looking over the policies and practices of the NRC, it is not difficult to recognize shortcomings and inefficiencies in many areas. Neither is it difficult to come up with ideas that might remedy some of the problems and a at the same time, improve the efficiency of manpower utilization. The W solutions to many problems faced by the NRC are not likely to be solved by bigger budgets and more people. They can be solved by practi'ca.l means.

Accardi ngly, I would like to summarize several ideas for NRC management consideration during the Regulatory Reform exercise.

/Jnspecti~n and Enforcem~n;-

NRC proposed policy clearly defines Severity Level V violations as minor. However, .,,,e process them with more than minor attention. The same *formal notice of violation is issued. A high .percentage of citations, inspector/supervisor attention and paperwork are charged to these 1.1minor 11 violations. Licensees seldom chal~enge them and the corrective actions reported by the licensees are usually _accepted. I propose that policy be changed so that "minor" violations i-dentified by NRC inspectors may be.

closed out by the inspectors themselves. This would be done by infonning the licensees of the violations,. requesting ,resolutions*, and documenting corrective actions, all as part of the same inspection. Regional super-vision \'.Ould be responsible for review of the inspector's handlin9 of these minor violations when the inspection reports are reviewed. A Headquarters function would be responsible for auditing the Regions.

/ Civi1 Penalties on Federal and Municipal Licensees One of. t9e questionable aspects of enforcement policy is the levying of I

civil 'fines on federal and local government licensees. It is not logical

\.. or appropriate in the first place. In the second place, the taxpayers/

ratepayers could get stuck with the fines. When federal agencies violate other agencies' regulations, something more than civil penalties would appear to be justified such as reports to the congressional corrmittees responsible for t~e agencies. Municipal authorities perhaps should answer to state rate commissions or legislative committees when they violate federal regulations, who in turn, should have to answer to the federal agency.

DEC 14 1981 Program Enforcement One of the most non uni form i nspecti 011 and enforcement areas is QA for construction and operations. Few citations against QA crJteria are black and white. *This entire area, although very important to plant safety, is the most deficient in NRC inspector/supervisor training and guidance. Most licensee QA personnel are relatively experienced and well trained in QA while few NRC inspectors have QA experience or training.

The QA criteria, QA plans and -QA programs are not very specific. On the other hand, citations are usually very specific. We should discontinue the civil penalty for QA violations, as routine escalated enforcement tools. Escalated enforcement for QA violations of a serious nature (multiple, repetitive, or breakdown) should perhaps be more in the form of work stoppages, limiting of operations, plant shut downs, or 11 holds 11 on startup. This would be accomplished through Confinnation

- ~ f Action letters or Orders as appropriate and, of course, specific NRC approval would be required to lift the restrictions.

• Enforcement of Nonreguirements This area would not be so-bad if there were some semblance of uniformity, sound bases for enforcement, official NRC sanction, and official notice to licensees before enforcing the issues. The nonrequirement area is fun to work in because it permits inspectors and managers to imppse their own ideas on the licensees. Often, one's personal opinions about what is good for the public safety wili end up as legitimate findings and enforcement action gets underway. The advantage of this system to over zealous regulators is that it short circuits the burdensome license review process and other legalities, which are very cumbersome.

If all nonrequirements had to be reviewed, given official sanction, and published for comment prior to enforcement, ,many if not most, would fall out in the pr-0cess. Manpowerwise, processing of nonrequirements ~an be just as demanding on resources as requirements,~ and there is no shortage of requirements that need to be inspected. To resolve this issue, I would,.?uggest beginning by first identifying all the Significant Findings, Management Weaknesses. Deviations. Deficiencies, Confirmation of Action Letters and other pseudo names for nonrequirements. Then I would run these through an NRC Requirements Review Panel and publish only what is

• left iit9er as Safety Enhancement Issues, or legal requirements. Following i

all this~ applying inspection and enforcement resources would be justified .

For items that do not become legal requirements, but for which licensee l.,

commitments are highly desired, we should use a cooperative approach to safety upgrading. If we have a strong case for the commitment based on safety, the licensees will be willing to cooperate. Failure of NRC to impose a genuine s'afety upgrade through a legal or formal process is a reflection on NRC, If a safety upgrade is not worthy of the NRC effort necessary to legally or otherwise formally impose it, then the licensee can hardly be expected to do it willingly.

DEC 1 4 1981 Problem Identification and Solving Determining what is a problem and finding the best solution for the problem are important everyday management functions. If a problem is incorrectly identified, the solution will not be realized even though the symptoms may disappear. Most problems will have two or more possible solutions which may be compared for cost effectiveness. Sometimes the real solution is not the one actually being sought. Rather, a solution that has the appearance of solving the problem may be preferred, such that to an outsider, the problem appears from all indications, to be put to bed. Tnis latter type resolution is a forsade, evidenced by careful avoidance of naming the culprit who caused the problem, abolishing or deemphasizing the organiza-tional unit where the problem was conceived, removal of selected lesser management personnel who by implication caused the problem, and finally, by placing the real culprit in a higher position charged with correcting the problem.

- find out what is a problem in almost any organization, you must go to both ends of the employee spectrum. You don't ask the owner of the company store what's bad about his coal mining business, and stop there. When serious problems are identifie<l- in certain areas of operations, you nonnally will not resolve the fundamental or root problems by merely changing titles and reorganizing while continuing to use the same faces and same methods .

. Detennination of Amount of Civil Penalty This process reached the absurd during early implementation of the interim enforcement policy when all lower level violations were elevated arbitrarily to the severity level of the principal violation, Level I, II or III, and the civil penalty distributed among them. This practice was discontinued; however, the current practice is still less than logical. For example, a licensee can have a Level III and several lesser viplations. A $40,000 avil penalty is imposed for the single Level I~I, but distributed among

• e others. If we should withdraw one or more lesser violations as we have done on occasion, the fine is reduced by that ~hare. Another licensee meanwhile may get a $40,000 CP for a single Level III, perhaps the same offense. ,.If he had no lesser violations included, he will end up paying a higher.fine for a lesser overall offense. The solution to this problem is to assess the civil penalty as the policy dictates for the principal violation: 1 If no civil penalty is justified in the policy for the individual -

lessor vib,lations, then we should not assess penalties and not distribute

, the base penalty among the -lesser violations. A more logical approach (would be to increase the base CP for the principal violation when there

• • are multiple violations in the same functional areas even though of lesser severity.

C

• DEc l 4 198,l Admit Shortcomings No one likes to admit errors in judgment, mistakes or other shortcomings.

However, there is no justification for a federal agency to avoid being forthright and honest in facing up to the facts. The NRC has no monopoly on good managers. The nuclear industry is loaded with them. Yet~ the NRC continually criticizes licensee management, implying that they are incompetent, dishonest or generally not motivated. The problem is, nobody knows what management textbook or system the NRC uses for evaluating licensees. Any Tom, Dick, or Harry in the NRC is by statute, an expert management analyst and is free- to point out as many "management weaknesses 11 as he can dream up. In fact, there are times when one may be embarrassed by the coments of certain NRC inspectors and managers with regard to the faults of industry management. It would be a disaster for NRC in the courts, if we ever had to defend some of the statements we make. There have been notorious examples over the years where licensee management was criticized in areas where much if not most of the blame should have been ~laced on the NRC. The NRC should admit its faults and set about to correct them.

Who is Responsible for Protecting the Public The Corrrnission has always oeen vehement in its policy of p1acing full responsibility for protectfon of the public on nuclear licensees. The fact is, however, that there is no way the NRC can avoid.sharing this responsibility. NRC managers should be equally accountable for their actions (or lack of actions) with regard to protection of the plic.

The Commission over the years has created the impression that this policy is designed to obscure its failure to recognize and take action on vital safety issues as they come to light. I think that if the NRC policy were changed to describe the sharing of safety responsibilities, 11 11 this would go a long way toward improved relations between the regulator an~ regulatee. The quality of NRC management would also be improved if they expected to be, and were held accountable for, their actions.

Enforcement for Failure to Follow Procedures This issue has been around for a long time and will continue to be a 11 thorn in the side of the licensee 11 until NRC *policy clearly defines the term--failure to follov-1 procedures. There is still a misunderstanding qn the part of many who believe that all cases of failure to follow pro-cedur~s= constitute noncompliance. The fact is, and I understand RD suppor,ts,this position, that noncompliance exists only if an NRC requirement

,f is violated. We must recognize and accept the normal practices of many

~ licensees which are to assure compliance with NRC requirements by adding conservatism in their procedures. Licensees may also include nonessential elements within NRC required procedures to avoid having more than one procedure on the s~me subject.

C For example, suppose the NRC security requirement for the number of guards o~ each shift is eight. Because the licensee wants to be conserrative and also has other security needs to be filled, his procedures prescribe ten on each ~hift. The inspector comes by and finds only nine guards on duty and cites the licensee for failure to follow procedures. This was a real example, and in fact, resulted in civil penalty action. The licensee at that time stated that he was considering discontinuing the practice of adding* conservatism to his procedures in general, and was p:,eparing a

5 DEc l 4 189}

separate security plan for his industrial security needs.

I and others have raised this issue previously. We need a clear statement of policy and broad training to ensure that everyone understand that the failure to follow procedures does not in itself, constitute a violation~

Only when the failure to follow procedures results in violation of NRC requirements, is a citation valid.

Improving Safety By Working With Licensees A review of corrrrnents from industries affected by the NRC interim enforcement policies revea 1ed an i nteresti rig fact. Many industry representatives. i.:n the post TMI era look upon the NRC as an antagonist or adversary. If this feeling by- the industry were to any extent justified, it would not be conducive to safety. Several years ago, NRC (AEC) had a reputation for working closely with licensees to resolve safety issues. Todays although NRC has the lion's share of available nuclear safety expertise on its staff, missionary work by NRC inspectors and technical staff is essentially nonexistent. Escalated enforcement appears to many licensees to be the sole mechanism by which NRC seeks to achieve safety of nuclear operations. Often the licensees learn what NRC policy is by reading civil penalty correspondence.

There surely must be other-effective mechanisms worthy of pursuit in obtaining safety goals, which would be far more safety productive.

It is unfortunate that the industry and the Commission-are not wcrking closely together to achieve the level of safety that the Commission feels is necessary. We are not and must not be the adversary. The best interests of the public cannot be served if the condition continues. Ways shoulds therefore, be found to bring about a reversal of the condition as soon as possible. National policy is to assure ample energy supplies. NRC must assure a safe nuclear alternative to other energy sources when the public's best interests are served.

---

'F."':::::,Long J,

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-1

I** ** . ... . _'ENCLOSURE ,4 UNITED STATES NUCLEAR REGULATORY COMMISSION REGION 11 101 MARIETTA STREET,N.W.

ATLANTA, GEORGIA 30323 N.OV 5 1984 MEMORANDUM FOR: Files FROM: F~ J. Long, Technical Assistant to the Regional Administrator

SUBJECT:

ENFORCEMENT POLICY Having read the public corrments on the enforcement policy published March Bs 1984, I am*more convinced than ever that a major change in direction is needed.

We previously prepared coments on a proposed new Manual Chapter 0400 on.

enforcement. Manual Chapter 0400 appeared to be designed to cast in.concretes a the past arbitrary practices rather than address the public corrrnents necessary to-

• remedy the serious problems encountered over the past several years.

My evaluation of the public cormients was that they appeared well intended,

.: : :. ... -~.houghtful.,. and. substa11tiY.e_*.. , .T~~ ..cormi~n:ts .~en~r.al J_y .described ~he new.~pol i.cy ~s .

more negative and seriousjy lacking tn. positive safety i~centives *.

• Many'

*qoestio*rrea the* 'e'xtens*ive use of *punishment -;-n**the** form o"f tivi1 -penalties- as* the only incentive NRC utilizes to assure compliance~

- ~., *: *:--'*'i* ur~;j'e *tne* -corrini's'si On' "to -t OOK. Fiato ~t .i tr** erif o"r°cement. p"o 1fcies arid" tlle* ..adv~rsary*

nature of _its enforcement actions. I strongly recomnend a. major change . in direction toward safety assurances and away fr.om.self-serving practices whjch are not conducive to plant safety:

I finnly -believe our enforcement practices have the opposite effect of im.proving safety. In fact, I believe we are c*reating serious safety problems by ~estruc-

__ tion of *licensee employee rr.orale and driving _the-.b~st p~ople out of the business.

The practices we employ to implement enforcement* policy can best be described as being designed to assure more and bigger civil penalties. not so much to assure safety. The* actual safety significance of any given violation is rar~Jy evaluated as the first step in the enforcement process. To the contrary-;-

decisibns to impose most civil penalties are made as the -first steps in the .

process. 1 f .

The moh ;5erious offense we have co!Tlnitted is publishing a policy and then

~.t. . circumventing that policy to the disadvantage of the licensee. The so-called evaluation of experience in use of the policy was totally invalid because the policy was not implemented in the way was intended. The policy has not worked well as. stated in the SECY paper. Statements made in numerous speeches by top NRC ~~nagers we we~ as various issues of the PPG have been essentially ignored in implementation of the policy. Many of the more significant enforcement cases have included arbitrary factors not discussed in or intended by the policy. Not only are policy provisions routinely circ~mvented, the basic provisions of the

Files 2 Atomic Energy Act with regard to maximum civil penalties are routinely circum-vented. These conditions all stem from decisions to impose a civil penalty of a certain dollar amount as the first step in the enforcement ~scalation process.

The cdjustment factors for increasing civil penalties are used freely to justify bigger penalties while the factors for_mitigating penalties are used sparingly.

'-~~-----------

F. J. Long

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ENCLOSURE 5 STATEMENT ON ENFORCEMENT PRACTICES F. J. Long This statement is being made because of possible serious consequences associated with NRC enforcement practices and I believe the Commission would benefit by a different point of view. My comme~ts are intended to be constructive, hopefully

- leading to improving a serious gap in NRC credibility regarding enforcement practices. My concerns have been expressed many times via normal channe-ls for the past several years. J:!pwever, the arbitrary and adversarial aspects of enforcement have become much more pronounced, making serious safety consequences more likely. In particul2r, since very large punitive fines are being routinely imposed for licensee identified and reported safety violations, licensee employees may avoid reporting of serious violations which if reported, would almost certainly create problems for their employers. Likewise, there are strong

-incentives for employees to "set up 11 violati-ons *e~ther* to get even, or to gain recognition by "finding" the violations after setting them up.

The most serious problem is what appears to be total NRC disregard of the words

' I and infent of published policy in imposing civil penaltfes and arriving at I

f

~ adjustments to base penalties. Civil Penalties and adjustments to the base civil penalties should be based on provisions of the policy, not on some unknown arbitrary criteria. 1 I do not object to maximum penalties being imposed. provided the,*, penalties are arrived at by logical, uniform applications of the policy.

However, it i~ clear that civil penalties are established and imposed, not by application of the policy, but rather by arbitrary predetermination of dollar

2 amounts and forcefitting of the citations to fit the predetermined penalt1es.

This process presents a dilemma for both the NRC Regional staff and the licensees because it is impossible to understand the reasoning employed. In many cases, civil penalties bear absolutely no resemblance to guidance contained in published policy, and the reasons stated for escalation of penalties bear no resemblance to the violations. This should be an embarrassment to the Commission. Since NRC policies seldom contain restraints on NRC management deviation from policy is routine. This is particularly evident in enforcement.

A practice that ties in closely with the above is finalizing of inspection reports after civil penalty_jctions are proposed. In some cases, words are added or perhaps changed to support the arbitrary*wording of civil penalty letters and Notices of Violation. What can and has happened is that licensees find that the inspector's report does not support the statements in the civil penalty package.

Additionally, the licensee often has not previously been apprised of the specific serious concerns the NRC has expressed in the civil penalty letters.

Another serious problem is the routine punishment of licensees who find and report ,violat,ions. The more they report, the bigger the civil penalties-.----Tite better 'the se 1f audit program, the worse the enforcement history. This practice is a n~gaiive incentive to licensees to improve their self audit programs. A serious safety problem is created in that licensees may decide they would be better off not to look for violations in the first place, and wait for NRC to find them. The pun1/2shment is no worse when NRC finds the violations than when the,., licensees find them. If the NRC objective is truly to ensure protection of the health and safety of "the public, then every available positive incentive should be used by NRC to encourage licensees to identify, correct, and report

3 violations. By the same token, all negative incentives should be tota_lly eliminated.

One major problem I believe the Commission should be aware of is the fact that we routinely circumvent the legislation fixing the maximum penalty per violation per day. The Commission requested Congress to raise the maximum penalty from $5,000 to $100,000 per violation and this was granted. Subsequently, however, it became clear that the legislation could easily be circumvented by eliminating the single

- event concept and adding up contributing and resulting violations. By this procedure, there is no limitation on civil penalties, making the statutory limit meaningless.

The single e~ent concept was originally adopted in order to focus attention on the root causes of problems for enforcement purposes. However, this policy provision is seldom utilized sincE it would generally result in only a $100,000 maxi:num penalty. Consequently, the focus of attention is placed back. on the

- individual violations by treating contributing. and resulting viol.ation~ as separate or groups violations and imposing a $100,000 fine for each.

When I' read the new policy, I found it a remendous disappointment in that 1t

>' t .

addresses,very few of the basic problems which have been experienced, while more reasonable features of the old policy were watered down or abolished. The new policy appears more designed to ensure continued headquarters control of all future esca 1 ated ehforcement actions, and perpetuation of exf sting practices.

Non.uniformity is assured for the foreseeable future, by making continued arbitrary actions more certain and much-easier. I am concerned that *NRC does not follow through on statements made to the public regarding policy. As an example,

4 NRC management has publicly expressed concern over the possible negative i.mpact of certain regulatory actions on the nuclear industry. Many NRC management speeches have included comments on this subject, seeking to draw favorable attention to NRC plans to counteract the problem.* These same :speeches have discussed the incentives contained in NRC enforcement policy, for licensees to find, correct and report violations. Meanwhile, NR~ enforcement practices remain punitive and adversarial, widening the gap between NRC and the licensees.

e Theoretically, revisions to the enforcement policy were based *on experience gained from application of the policy which was published in the Federal Register, March 9, 1982. Si.nee enforcement practices have by no stretch of the imagination, been fully in accordance with that policy, the experience claimed is not valid. Although all escalated enforcemeht letters contain standard words which say the enforcement is in accordance with published policy. the fact is, the enforcement is rarely in accorctanc~ with that policy. Furthennore, the new policy appears designed to justify extensive deviation from the published policy

-*in the past. In any case, it does little good to* change the*polic;y or even have a policy, if it is not going to be used.as intended.

I . am *concerned that extremely non-uni form, arbitrary imposition_ of civil

~

• l penal ti.es ,could create a dangerous safety condition. There are now more safety

' . i

\. violations than ever, and managers and employees at nuclear facilities* are continually on edge, fearing that one simple mistake will destroy their careers.

Conditions like thi~ are not conducive to safety, and could eventually lead to a sei:-11ous accident. I certainly would not_ be comfortable on commercial air-liners where the flight crews w~re under similar stress.

5 The only visible means by which NRC obtains compliance, is the civil penalty and occasionally, a belated order. Considering recent and current cases in process, nearly all licensees have been or will be, subjected to punitive fines. This is not a valid measure of how well the NRC is performing, nor how poorly the industry is performing. Enforcement practices are clearly self serving. If the same arbitrary standards were applied to NRC management that NRC applies to licensee management, there would be numerous NRC management vacancies.

Apparently no one expects, much 1ess demands, the highest standards for NRC

- management. There are no independent management consultants periodically evaluating NRC while managers in the industry are continually under NRC pressures to improve performance. Ifthe objective of the NRC was to convince the public that nuclear plants are dangerous, no better job of convincing could be done than by NRC enforcement practices.

Needless to say, I, like many others in NRC, am supportive of nuclear power or I would not have spent the past 30 years in nuclear work. This does not mean I am e not concerned with nuclear safety enforcement. *. f am pro-commerci a 1 airlines, but, I also strongly support enforcement of safety standards and rules for the airlines.. I do not, however, support escalated enforcement for reasons* other

/

than violation of regulatory requirements. I do not object to escalated enforce-1 .

1 '

ment c~ns~stent with approved and published policy, no matter how tough it is.

\, But I do object to intentional or careless disregard of that established policy by staff personnel. I do not think we should be playing "can you top this" games with enforcement .

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6 To be more speci fie, there are a number of* very serious problems wit_h implementation of the NRC enforcement policy. Some of the worse examples are the following:

1. Civil penalties are now so routine and so frequent that they pose a serious threat to nuclear plant safety. Not only is this destructive of licensee and NRC morale, it convinces the general public that nuclear plants are dangerous, and supplies the antinuclear element with ammunition they need to attach the industry. I fear we are laying the gro~ndwork for another accident.

2. Many civil penalties, including the larger ones, have been for violations identified and reported by licensees. This is a serious reflection on NRC perfor.mance. This gives the appearance that the shortcomings, .inactions and lack of foresight by NRC management apparently are being covered up at the expense of the licensees. Little is being done meanwhile, to determine why I

-- NRC does not find these serious violations even though NRC has the lion's share of available nuclear experts. Many of the major civil penalties_~re indicative of failures of the NRC staff rather than of licensee management.

3. A\i.hoµgh NRC had a reasonable enforcement policy on paper, that policy has t essentially been ignored. In particular, provisions of the policy which offer incentives to licensees to do better, and which would result in uniform treatm~nt, have generally been disregarded. The typical large civil penalty bears little resemblance to provisions of the publi~hed policy or to

-1 simple logic. Reason*s appear to be dreamed up to justify predetermined L

• large penalties, since the stated reasons, most often are not described in

7 the policy. I believe civil penalties should be issued only for significant vi o1at ions of NRC requirements and that NRC managers .shou1 d not have questioned freedom to deviate from the policy. I was at one time advised that NRC does not have to comply with its own policy and can do whatever it wants to do.

4. Two.large civil penalties of record, have one thing in common. The problems involved inadequate surveillance programs. Although the problems were found

e. to be widespread throughout the industry, civil penalties were not levied on the other licensees for the same violations. The two civil penalties were processed and issued wn,le similar events were being reported from all over the country.

5. Civil penalties often are issued for reasons which are not cleariy violations of NRC requirements. In at least one case, the civil penalty read like NRC had been disappointed because there were no overexposures on~

steam generator replacement. The licensee was actually complemented in the enforcement letter for improvement of a prior good record. If no one was overexposed, the procedures must have been adequate; however, by dwelling on 1

' potential for overexposure" and "inadequate survey," a civil penalt,y_ case

< l w1s 9eveloped. This is what happens when the decision to imp_ose a civil

~ penalty is made as the first step in the enforcement process, contrary to the policy which says the first step is to determine the safety importance.

-1

8

6. We continue to make a ~ig case out of licensees violating their own requirements as opposed to NRC requirements. If a licensee procedure is more conservative than NRC requirements, NRC should ~ot be concerned 1f a licensee falls short of his own goals as long as NRC limits are not exceeded. We frequently cite for inadequate procedures after events occur.

Yet we seldom identify these same inadequacies during our procedure review process.

In one case I am familiar with, a large civil penalty was issued even though an NRR expert and others supported the view that the event had only minor safety significance.* Tater, when other violation resulted in a civil penalty, the first case was used as evidence of a poor enforcement history to justify a much larger fine.

8. One of the provisions of the- policy was to giye licensees credit for corrective actions on licensee identified violations. To avoid considera-11

-- tion of this credit, the term minimally~ acceptab1e" was generated.

Mitigation can then avoided becaus~ corrective actions were not take~ far be,vond necessity. This implies that NRC expects excessive,. complex,-*a-nd ot-herwi se unnecessary actions as conditions of acceptance of correq.ive a~ii0f1S for mitigation. As far as I am concerned, either NRC requirements

\

• 1 are met or they are not met.

9. The time to thoroughly evaluate licensee corrective actions on licensee identified violations is at the time the violations are reported and during inspections and enforcement conferences. This evaluation should determine whether a civil penalty is to be mitigated before it 1s issued. However~

9 these evaluations seldom mitigate the civil penalties. The civil pen_alty letters use standard phrases implying that NRC will review the licensee's responses to determine if the fine should be rescinded, mitigated, or impose. Again, the licensees' responses seldom result in mitigation. The licensee responses apparently are not evaluated, or at least not for the purpose of rescinding or mitigating the fines. Instead, the main objective clea~ly has been to impose the fine.

-10. An example of disregard of the policy and arbitrary punitive action is a civil penalty case involving falsification of records. This event was determined to be a ~ing°le Severity Level III violation and a penalty of

$100,000 imposed. There were obviously no policy provisions considered since it is not possible by the policy to go from $40,000 to -$100,000 for a single Level III violation with apply certain -factors. In the letter, a 11 statement is made - falsification of QC records is a serious offense.a For this reason, but contrary to published policy, the Maximum CP was i111posed.

- The policy states that Severity Level I.anlfI violations are $80,000 and

$64,000. by categorizing the falsified records violations as a Level_ _UI, it..denoted only 11 significant concern 11 and th.erefore by the policy, the*-f4ne I

would be $40,000. A serious violation should be a Level l or II if a ~ivil

. l p~al,::y greater than $40,000 is justified, absent *adjustment factors

~ contained in the policy. It is therefore very clear, that this action was arbitrary and punitive, the amount of the fine predetermined, - and words generated to j~stify that amount.

-l

10 This same case is also interesting in that the required Commission not i fi cat ion, EN-83-26 contained a different and unique reason for the maximum ($100,000) fine. The EN stated that the maximum CP was proposed "to indicate to other licensees that NRC will not tolerate falsification of records." This demonstrates that the Cammi ssion is not informed properly regarding enforcement actions as required.

It does no good to inform the Commission unless the Commission is accurately informed of all facts as well as deviations from the policy. The EN itself, in this case becomes a---false record-because it tells the Commission one thing while something was being done._ NRC Managers should "pay meticulous attention to detail 11 as licensees are continually reminded they must do.

Industry Managers can have their careers ruined for much less.

In summary, there is absolutely no.common basis to be found in the policy for most civil penalties. In cases where the identified violations do not. fully

- support a.pparent ly predetermined enforcemen~ actt.ons, -irrelevant reasons are developed. The NRC continues to be an adversary"of the nu~lear industry contrary to 1ts,._stated objectives. Rather than work.fog* with the industry to so-lv.e

. 1 ems. leading to safer plants, we are generating distrust, anxiety, and prob

• J '

disrespect. The best interests of the public cannot be served by this condition.

~ t i

'f The real motives of NRC management are continually in question as so well put in the Charnoff/Hickey paper presented at the 1982 AIF Annual Conference. The net result of our enforiement practices would have to be evaluated as something less than improved safety, at best. At worse, these policies anq practices, if

-1 continued, can lead to a major accident.

ooc;KETEJ USHRC

'85 .APR 30 P3 :23 KMC, Inc.

801 18TH STRH"T NW SUITE 300 WASHINGTON DC 20006 (202) 293 4200 April 29, 1985 Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 ATTN: DOCKETING AND SERVICE BRANCH

SUBJECT:

Additional Comments on NRC Enforcement Policy

- (50 FR 1142)

Dear Sir:

At the last scheduled meeting of the Ad Hoc Committee on Enforcement on April 10 & 11, 1985, members of the Committee asked for more concrete proposals of desired recommended changes to the NRC Enforcement Policy. As an enclosure to this letter, we have provided draft recommendations for desired changes to the policy.

Some members also asked if a dialogue could be arranged with utility persons dealing with, the NRC Enforcement Policy on a day-to-day basis. Arrangements have been made for two additional utility representatives to speak at your May 1, 1985 meeting: Mr.

J. Pilant of Nebraska Public Power District and Mr. M. Howard of Florida Power Corp. Both of these individuals interface with NRC regional and headquarters personnel on enforcement matters on a daily basis, and can provide information and examples of the impact that the NRC Enforcement Policy has had on their utility and employees.

In providing the enclosed recommended changes to the NRG Enforcement Policy, we recognize that many pages of desirable comment could be included. KMC did provide considerable addi-tional comments on the interim policy published in 1980 and we believe it remains valid; however, we now feel it most important to focus on two of the more serious problems and urge the Commission to move forward in correcting those. We believe that through dialogue with the NRC staff, other recommended changes could follow once the Commission decides major revision is in order. The two vital issues singled for attention are: material false statements, and the Commission's policy of establishing severity categories and subsequent escalated enforcement actions

JClEAR P EKETINC" CHIC£ OF TL D, .

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such as civil penalties. We are of the opinion that the policy guidance itself should be brief and permit regional discretion in implementation.

We would be pleased to answer any questions you may have.

Sincerely,

~ ~ 'r. tL.J:t.

Donald F. Knuth President Encl.

ENCLOSURE 1 RECOMMENDED CHANGES IN ENFORCEMENT POLICY A. Material False Statement (MFS)

The current policy toward material false statement should be revised to retain only a portion of the existing definition as a MFS and a category of "truth in reporting" should be established.

A material false statement would be defined as written material submitted with the full knowledge that it was false and that it would be relied upon in the review process. In this category, Department of Justice review of the criminal aspects as well as NRC issuance of escalated enforcements (orders for suspension or civil penalty) could be pursued.

Other information submitted in conformance to reporting requirements or in response to NRC questions would be reviewed in the context of violating a "truth in reporting" requirement and would be segregated by severity level. A statement made with the intent to deceive (or intentionally withhold) for example would be placed in the more severe category whereas a factual inaccuracy without any intent to mislead would be of a lesser severity.

Violations of "truth-of-reporting" could be subject of escalated enforcement in the established policy but would not be subject to Department of Justice criminal involvement.

B. Severity Categories and Escalated Enforcement The current severity categories should be revised to reduce the number of severity categories and more importantly to restore the graded approach toward enforcement. The requirement for automatic fines for certain categories of violations and the policy to levy civil penalties should, by and large, be an escalated enforcement action when enforcement conferences and warnings to licensee management have not been acted upon. It is when utilities are unable or unwilling to correct problems that civil penalties and/or orders be used.

OOCIIII . . . .

---IUll PR - . ~

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f BOSTON EDISON COMPANY ( 5a Fil //412.,

800 BOYL.STON STREET  :>'

BOSTON, MASSACHUSETTS 02199 WIL.L.IAM O. HARRINGTON OOC:KETED 81:NIDR VICC PRl: IDIENT US~IRC NUCLEAR April 24, 1985

'85 APR 29 P2 :59 BECo 85-080 OFFIC:: OF SEC

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Secretary of the Commission OOClffTI NG & SERVICf U.S. Nuclear Regulatory Commission BRANCH Washington, D. C. 20555 Attn: Docketing and Service Branch Response to Request for Comments by Ad Hoc Advisory Committee for Review of NRC Enforcement Policy

Dear Sir:

By Federal Register notice (50 Fed. Reg. 1142, January 9, 1985) the Ad Hoc Advisory Committee for Review of Enforcement Policy (Committee) has requested comments on the NRC's enforcement policy. Boston Edison Company CBECo) applauds the Committee's activities to date and welcomes the opportunity to respond to this important concern. We have previously provided input indirectly to the Committee through our affiliation with a group of reactor licensees that has commented separately 1

• In addition to endorsement of points made in the group's comments, this letter expounds on six points we feel deserve increased emphasis.

Our points are briefly stated here and comprehensively discussed in the body of this letter. First, we are advocating that any changes to the NRC enforcement policy be made for the purpose of minimizing the present adversarial environment and in order to promote a more cooperative attitude between the regulator and power reactor licensees. Second, we feel that the present "substantial potential" standard that is used in 10 CFR Part 2, Appendix C to determine whether a licensee has committed a Severity Level III Health Physics or Transportation violation should be clarified. Third, we are recommending that up to 100% mitigation of proposed civil penalties be allowed in the event of prompt licensee corrective actions following a violation.

Fourth, we also wish to emphasize that timeliness by the NRC in the implementation of enforcement responsibilities is important. Fifth, the Committee should be aware of the adverse publicity a utility experiences when NRC sanctions are imposed; in effect this is an additional "penalty" beyond the amount of any monetary civil penalty . Finally, we are offering some specific comments related to Staff proposals for redefinition of material false statements.

l. February 28, 1984 letter from N. S. Reynolds to NRC CS. J. Chilk),

regarding comments on NRC enforcement practice and procedures.

1 '~ R. RfCULATORY COMMISSI0.8

'<E'rll\!G P- :~RVK:E SECTION c~r-1 ~ rr:.ETARY o~ ,t*~ r.o ,t,//i SSION d

IJ1** r I i n

BOSTON EDISON COMPANY Secretary of the Commission Apri 1 24, 1985 Page 2 An initial concern we have is that- the enforcement process is unnecessarily adversarial. One place where we have seen this and where it has been particularly troubling is in the case of enforcement conferences. Such are called after an ostensible violation has been identified for the presumed purpose of discussing the event and its cause, licensee corrective actions both immediate and preventive, and other aggravating or mitigating circumstances. Our experience has been that such sessions do afford the utility an opportunity to explain its position but that the NRC typically is unwilling to communicate its views or to respond. The utility is then left to wait, sometimes for weeks, before it finds out what violation is to be alleged or what penalty is to be proposed. This is not helpful in achieving prompt corrective action, but more fundamentally it is detrimental of what should be a highly cooperative process. In an area such as nuclear regulation where the sharing of information is an important way of promoting safety, the creation of an adversarial environment can only serve to detract from safety. Another example of this is in the area of material false statements 11 11

• Clearly the expansion of the categories of situations wherein an inadvertent misstatement is deemed a material false statement can only serve to deter the making of 11 11 statements or the sharing of information. In summary we believe a less adversarial relationship will both better promote cooperation and safety and also allow the enforcement policy to work more smoothly.

We are also advocating that the substantial potential standard used for 11 11 Supplement IV and V violations be totally eliminated. The enforcement policy has established the substantial potential standard to cite licensees for 11 11 Severity Level III violations in the areas of Health Physics and Transportation. It is our position that the use of this standard to measure licensee performance is an example of a vague standard subject to discriminatory application. The resultant adverse effects, including the imposition of civil penalties, negative media attention, and reduced employee morale, are clearly not warranted. The potential for application of this standard unfairly places the licensee in a position of not knowing when his seemingly prudent and conservative behavior will result in a notice of violation. The primary advantage of deleting this standard would be the elimination of an uncharacteristically low threshold by which licensed activitfes need to be conducted to be in compliance with the rules and regulations. We strongly encourage the Committee to review the use of the 11 substantial potential standard with the intent of removing it from the 11 Enforcement Policy.

Although the enforcement policy presently provides for up to fifty percent mitigation for civil penalties in the event of prompt licensee corrective action following a violation, we are recommending that greater incentives for prompt licensee performance should be instituted. Specifically, full mitigation should be granted for prompt comprehensive corrective actions. We recognize that violations are very serious matters. Equally serious is the

BOSTON EDISON COMPANY I

Secretary of the Commission April 24, 1985 Page 3 expeditious correction of the problem(s) underlying the violation, and if appropriate the timely implementation of preventive actions to preclude recurrent violations. A provision for full mitigation would encourage prompt corrective action both at the corporate and employee level and would provide a positive incentive to return to comp-liance as soon as possible. We believe this is the type of characteristic that should be embodied in the enforcement policy.

For a different reason we feel that prompt and timely actions by the NRC in the implementation of the enforcement policy should be encouraged. The impact on a licensee from prompt enforcement action by the NRC would be beneficial because it reflects a strong and aggressive attitude by the NRC enforcement staff. On the other hand, delayed enforcement actions erode utility employee and corporate morale and therefore serve little useful purpose. We have experienced several situations in which there was no NRC activity for several months following a violation. We interpreted this lack of activity as tacit affirmation of our corrective and preventive actions for these particular violations. This lateness also calls into question the seriousness wtth which the NRC regards the matter. If a licensee has cormnitted a violation and prompt corrective actions are performed, there is no discernible reason why the NRC should not act to disposition the situation as quickly as possible.

The Committee should also be aware of the magnitude of damaging publicity that a utility experiences when a civil penalty is imposed upon a licensee, even when the underlying event is relatively minor. There is no way to place a dollar value on the damage to the utility s public image, but the cost is 1

tremendous. In some cases the monetary penalties imposed by the NRC are small by comparison. It is our opinion that most NRC sanctions that include a 11 penalty of adverse publicity are unfairly out of balance with the underlying 11 licensee activity. We are requesting the Committee and the NRC enforcement staff to be more- sensitive to this point.

A final area which has been of particular concern to Boston Edison Company is that of the handling of material false statements 11 11

• The concept has been severely stretched from the initial, narrow interpretation of a deliberate misstatement in a licensing document to include oral statements, non-statements, inadvertent statements and ambiguous statements. Whatever the reason or significance, however, to the press and the general public it all translates to the utility lied.

11 11 The implementation of the material false 11 statement standard in this direction can only have a chilling effect on 11 NRC-licensee communications.

We therefore favor the direction of the recent Staff proposal which would replace the material false statement standard in a number of instances with 11 11 a new set of reporting requirements. Although we favor the direction, we still have serious concerns with the vagueness of certain aspects of the Staff

BOSTON EDISON COMPANY Secretary of the Commission April 24, 1985 Page 4 proposal, such as the open-ended standard of "significant safety implications for licensed act1v1ty" which governs whether a matter is to be reported. Such a standard has all the earmarks of leading to a new wave of after-the-fact determinations that the licensee should have analyzed something differently and therefore reported 1t. The NRC has available to it an almost incredible variety of mechanisms whereby it can ask, and compel, a licensee to provide virtually any information the NRC desires. We suggest that the NRC's efforts would be better directed in asking licensees for the specific information it desire~ rather than creating new open-ended reporting requirements.

We hope the above comments are helpful to the Committee. Should you desire further elaboration on any of these points or on the Enforcement Policy generally, please contact us.

Very truly yours, TFF/kmc

~ IIUM8£k OOC.:K6T£0 USNl'I C

'85 APR 22 P12 :oa OFFICE OF SECRETAR ~-

DOCKETING & SERV!Cf BRANCH

- NRC AdHoc Advisory Committee on Enforcement policy

~irs:

There is no enforcement policy within NRC. All violations are paid for by the stockholders, ratepayears or tagpayers. The individual that actually caused the violation am. the management that almowwd the violation are not charged with anything and they never have to pay.

I cannot see haw an enforcement policy which fines ratepayser or stockholders for the action of arnnagement of employePs can ever be effective .

The NRC p~licy has so far been shown highly ineffective by an accelerating onslaught of violationt and operating problems.

Marvin I. I,ewis 4-15-85.

M. I. L WI 6504 BRADFORD TER HA, Pi 1914 Inside NRC Jun 25 ,84. Quote APR 25 1985

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KMC, Inc.

801 18TH STREET, NW SUITE 300 WASHINGTON DC. 20006 (202) 293-4200 March 27, 1985 Secretary of the Connnission U. S. Nuclear Regulatory Connnission Washington , D. C. 20555 ATTN: Docketing and Service Branch

SUBJECT:

Connnents on NRG Enforcement Policy as requested by Ad Hoc Connnittee for Review of Enforcement Policy (50 FR 1142)

Dear Sir:

KMC, Inc . , and the utilities listed in Enclosure 1, are pleased to offer connnents on the current NRG enforcement policy.

The principal reviewer from KMC has experience with the policy both from the NRC's perspective (as author of the December 31, 1974 version of the Enforcement criteria), and as a consultant to the nuclear utility industry for over eight years . The listed utilit i es, of course, have nuclear plants under construction or in operation subject to application of the enforcement poli cy . We would be pleased to provide further oral comment to the Ad Hoc Advisory Connnittee or to answer any questions members may have .

KMC provided considerable comment on the interim policy which was published in 1980. In addition to the written comments, we also provided the staff with a detailed draft rewrite of the interim enforcement policy which would have implemented our recommendations . Some of our comments made at that time were adopted by the Connnission, others were not. In retrospect , we believe the comments and suggestions provided four years ago remain valid . At that time our general view was that civil penalties were being planned for more extensive use for "first time offenses," rather than as an escalated enforcement tool; and the stage was being set to escalate the dollar size of fines for u tility operators. In our comments provided in this letter, we should like to focus on what we believe to be the two most serious problems or issues in need of change in the enforcement arena.

These are: the Commission's treatment of material false statements and the Connnission's policy of severity categories and Acknowtedged by

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assessment of civil penalties. Enclosures 2 & 3 provide a discussion and also reconrrnendations in these two areas.

We would urge the Ad Hoc Committee to consider these major policy issues and reconrrnend changes to the Commission. The need for a strong and effective enforcement policy is clear; one that encourages licensees to improve performance and enhances collllilunication is much preferred to one that results in adverse and chilled relations.

We are in general agreement with the observations of the witnesses at your previous meetings, in particular those of the regional administrators, and would be pleased to address any specific questions you may have.

Sincerely, Donald F. Knuth President Encl.

ENCLOSURE 1 Consumers Power Company Nebraska Public Power District Omaha Public Power District Standardized Nuclear Unit Power Plant System Toledo Edison Company Virginia Power

ATTACHMENT 2 MATERIAL FALSE STATEMENT The Commission's policy on material false statements has been discussed within the Commission, and the public has been invited to provide their views. In this discussion, the legal implications of what is meant by material false statement is avoided, only the practical effects of the current interpretations are addressed as are proposed changes.

The NRC has defined material false statement such that oral as well as written information or lack of information fall into this category. Intent to mislead is not a consideration. With these ground rules, if a utility employee provides an incomplete or incorrect answer (irrespective of any intent) to a question asked by an NRC employee, he could be accused of making a material false statement. Most members of the public do not understand what an NRC material false statement is, and equate it to everyday usage which amounts to an intentional cover-up or falsification.

The practical effect of the current policy is to chill open dialogue between licensees and the NRC. This is not intentional or planned by the NRC or licensees; it is a trait of human nature.

One licensee "hears" of an instance where a utility employee is cited for a material false statement, and he resolves to be more careful in his future dealings with the NRC. As can be verified by talking with an NRC project manager, questions posed by telephone now take longer to get an answer, and the NRC caller may be asked to write the question in a letter so there will be no misunderstandings. The extent to which this current policy inhibits rapid interchange of information can only be a guess; however, there is definitely a tendency to provide additional checks on the information before it is relayed and unnecessary to the NRC.

In order to establish an orderly enforcement policy which would encourage the submission of correct and timely information it is recommended that the reporting requirements be revised to establish different thresholds of violations for reporting inaccuracies. Although the exact legal language has not been fully thought out, the essential elements could be as follows:

Material false statements would be defined as written material submitted with full knowledge that it was false and that it would be relied upon in the review process.

Other information submitted in conformance with reporting requirements which were erroneously submitted, or deficient oral statements would be grouped into the various severity categories. The most serious category would be those which were made with the intent to deceive, or were intentionally withheld to

deceive. The categories could be graded with the least serious being a factually incorrect statement, yet without any intent to mislead.

We believe that separating the material false statement from a "truth in reporting" requirement (fitting the severity categories of violations) would provide the assurance the NRC desires in obtaining prompt and factual information from its licensees, and would remove the label of material false statement to oral or unintentional misreporting.

ATTACHMENT 3 SEVERITY CATEGORIES AND ASSESSMENT OF CIVIL PENALTIES Severity categories for violations were first published in December 31, 1974. At that time, three categories were recognized; there were also graded and planned thresholds for various enforcement actions. Although civil penalties could be imposed for significant violations on a one time basis, it was generally recognized that an imposition of a civil penalty was an escalated enforcement step usually taken when repetitive violations were found, and/or the licensee was ineffective in instituting corrective actions.

The interim enforcement policy of 1980 envisioned six severity categories and was revised to five categories when published in 1982. KMC cotmnents of January 16, 1981 were to the effect that too many severity categories were being proposed, and the civil penalty criteria was diluted in that it was to be an accepted enforcement tool for any violation in category I, II or III and for repetitive category IV findings. It was, and remains, our view that civil penalties should by and large be an escalated enforcement action to be taken when enforcement conferences and warnings to licensee management have not been acted upon.

Unrestrained use of fines makes it appear they are being used as a revenue gathering effort rather than identification of a unique enforcement problem.

We recotmnend that the enforcement policy again return to a graded approach; that is, inspections which identify that a utility is having repetitive problems receive an enforcement conference and if the utility is unwilling or unable to correct those problems, escalate the enforcement with a fine and/or order.

On the other hand, a utility which has an exemplary compliance record should not be fined for a single violation (irrespective of its severity category). As many of the regional administrators testified, the complexity of technical specifications for a modern day plant almost assures a violation of an important specification will occur at some time in that plant. Harsh enforcement action for a one time error, in an otherwise well managed operation, does not engender respect for the enforcement system.

W/Ll.W1 l SrEwART Nuclear Operations Department Vice President Post Office Box 26666 Nuclear Operations One fames River Pla.za Richmond, Virginia 23261

. '* I 3 Ma rch 13 , 1985 VIRGINIA POWER Secretary of the Commission Serial No .85-157 U. S. Nuclear Regulatory Commission NO/JDH:acm Attn: Docketing and Service Branch Docket Nos. 50-280 Washington, D. C. 20555 50-281 50-338 50-339

Dear Mr . Secretary:

License Nos. DPR-32 DPR-37 VIRGINIA POWER NPF-4 RESPONSE TO REQUEST FOR COMMENTS NPF-7 BY THE AD HOC ADVISORY COMMITTEE FOR REVIEW OF ENFORCEMENT POLICY (50 FR 1142)

We are pleased to have the opportunity to provide our comments to the Ad Hoc Advisory Committee for Review of Enforcement Policy. Because enforcement actions are one of the most significant and visible mechanisms by which the NRC and nuclear utilities interact, it is important that the Enforcement Policy governing this interaction be open, positive, and conducive to the efficient discharge of the Commission's, as well as the utilities',

responsibilities. In our comments we implicitly address many of the items and questions raised in the January 9, 1985 Federal Register notice. However, some questions, such as those addressing the effects of regionalization on the enforcement program, are not within our purview to comment .

The most disturbing aspect of the current Enforcement Policy is its treatment of material false statements. It does not appear to us either proper or fair practice to attach the stigma associated with the accusation of material false statement to unintentional, mistaken statements or omissions. One aspect of this practice is its effect of turning utility personnel into neur ot ic letter readers incessantly looking for mistakes or statements that could possibly be misconstrued by the NRC. The result of this policy is to constrict the free and open flow of communications that is necessary to conduct the Commis-sion's business effectively. Similarly, no oral statements made in the process of informal conversations with the NRC should be considered as material false statements. If indeed the NRC intends to modify its Enforce-ment Policy to improve its power to deter noncompliance and encourage safety practices, the treatment of material false statements must be changed.

It appears to us that the current Enforcement Policy focuses too narrowly on specific violations and corresponding enforcement actions rather than on the overall safety performance of licensees. We recommend that the Enforcement Policy be revised to emphasize and evaluate trends rather than respond to isolated cases. While allowing the NRC to ensure compliance with the rules and regulations, this revision would allow for a more honest and uninhibited

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VIRGINIA POWER Individual violations would no longer result in knee-jerk reactions by licensees in attempts to identify and take aggressive corrective actions. The emphasis should be shifted toward programmatic, rather than reactive, corrective actions. An Enforcement Policy with less emphasis on the case-specific aspects would relate to a licensee's performance in significant areas (e.g.,

operations, quality assurance, radiation exposures, maintenance, training, etc.) over a period of time. One such program that could provide input to such policy would be the Systematic Assessment of Licensee Performance program.

- The amount of the civil penalty imposed is also important. Significant monetary penalties should be imposed only when serious failures to maintain safety occur, or when the licensee fails to correct previously identified programmatic deficiencies. Eliminating the imposition of penalties for actions of lesser, if any, safety significance, would ameliorate morale problems created when an individual, inadvertent error is magnified out of context with its safety implications.

The Regional Administrators have told the Advisory Committee on Reactor Safeguards that it is the bad publicity associated with current enforcement actions that is most considered a penalty by the utilities. The bad publicity generated by poor ratings or the public knowledge of a utility's failure to correct systematic weaknesses will continue to be its most effective enforcement tool.

The committee's review of the curr ent Enforcement Policy should consider the issue of timeliness. In too many cases, enforcement actions have been taken long after the violations occurred and were corrected. Such delay serves no purpose. It provides no assurance of safety to the NRC and has a demoralizing effect on the utility. We propose that a time frame be established for the imposition of penalties for serious safety violations.

Finally, the question has been raised of whether, and how, the Enforcement Policy could provide positive incentives to licensees to maintain or improve their safety performance. By the magnitude of their economic investments in the plants, utilities already have the strongest incentives to maintain high standards and efficient operation of their plants. This cannot be accomp-lished without a keen regard for safety. It does not appear to us that ~tis feasible, nor should it be an explicit objective, for the Enforcement Policy to attempt to provide safety incentives. However, an overly punitive policy can have a demoralizing effect on plant personnel, and ultimately a negative effect on safety. Similarly, undue emphasis in taking enforcement action for isolated violations may be diverting the regulatory focus from more significant, programmatic safety concerns.

Page 3 VIRGINIA POWER In summary, we believe that the Enforcement Policy should be revised to recognize nuclear utilities' innate safety interests, to allow them the flexibility to implement their own programs, to encourage open and honest communications, to provide for timely enforcement actions, to differentiate real safety concerns from mere compliance, and to pass judgment on safety programs as a whole rather than on isolated failures . Implemented in this manner, the Enforcement Policy would be a more effective tool in assuring that licensees continue to meet, if not exceed , all regulatory requirements. It is Virginia Power's intent not only to meet the applicable regulatory require-ments , but to strive for excellence in all facets of our activities associated with nuclear power .

The Federal Register notice also requested that commenters identify their willingness to have a representative summarize their viewpoints orally to the Committee during a public meeting and to identify a point of contact. We would be pleased to make such a presentation to specifically address the issues discussed in this letter. Please contact Mr. R. J. Hardwick at 80 4 /771-3381 for further information.

cc: Dr . J . Nelson Grace Regional Administrator

- Region II Mr . H. L. Thompson, Jr., Director Division of Licensing

Southern California Edison Company P. 0 . BO X 800 l.,.J 2244 WALNUT GROVE AVENUE ROSEM E AD, CALIFORNIA 91770 K E NN E TH p. BAS KIN TELE f>'HONE VICE PRES I DENT -818- 3 02 - 1401 March 21, 1985 Secretary of the Commission U.S. Nuclear Regulatory Commission Attention: Docketing and Service Branch Washington, D.C. 20555

Subject:

Ad Hoc Advisory Committee for Review of Enforcement Policy; Request for Written Comments (50 FR 1142)

The January 9, 1985 Federal Register (50 FR 1142) contained a request for comments on specific questions of the Ad Hoc Advisory Committee for Review of Enforcement Policy. We are participating in the Edison Electric Institute effort to comment on these questions, but are providing additional comments in light of the importance of enforcement actions on the operation of our plants.

The following are SCE's specific comments on the questions posed in the January 9, 1985 Federal Register Notice:

Part I: Effects of Enforcement Policy On:

l. The prompt detection and correction of violations by licensees The NRC enforcement policy, as implemented, does not adequately mitigate sanctions imposed as a result of violations that are licensee identified and promptly corrected. As a consequence, the policy has not encouraged self identification and prompt and effective corrective action.

2. The prompt reporting of violations by licensees The enforcement program appears to have little, if any, effect on the prompt reporting of violations by licensees.

3. The prevention of violations by licensees In the same way that the enforcement program has not encouraged self identification of violations, it has also not encouraged self criticism and the resulting corrective actions that would enhance the prevention of future violations by licensees. Thus, the policy contributes negatively to the prevention of violations.

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Secretary of the Commission 4. The safety record of licensees An enforcement program which provides strong positive incentives for early and complete identification of violations, and for candid development of generic corrective actions, would positively contribute to the safety record of licensees. As the existing program fails in this respect, it does not positively affect the safety record of licensees, as it should.

5. The morale of licensees and their employees The size and frequency of civil penalties causes the lay public to perceive that licensees, and their employees, are involved in activities adverse to their well being and that such activities are carried on in a careless and irresponsible manner. As the NRC knows this is simply not the case and the employees believe they are performing a positive service to their community, this discrepancy results in a major, and chronic, negative impact on morale. In the end, this negative climate could deny the nuclear industry the new, talented human resources required to safely operate and maintain the existing plants. In addition, because the enforcement program appears to encourage self regulation and effective action to correct deficiencies by licensees, but its implementation does not adequately recognize these efforts, it has a significant negative effect on the morale of licensees and their employees.

6. The public's confidence in the Commission's enforcement program The NRC enforcement policy has a negative effect on the public's confidence in the enforcement program. The characterization of violations, and associated civil penalties, result in a public perception that the enforcement program has been ineffective in requiring compliance by licensees with acceptable safety standards.

This would be greatly changed if the enforcement policy provided more positive responses to licensee self identified, and corrected items that had no actual significant adverse impact on the public health and safety.

7. The willingness of workers and members of the public to report alleged violations To the extent that the enforcement policy represents an opportunity for those opposed to the nuclear industry, or those aggrieved concerning particulars of their employment or circumstances to do it harm without cause, it greatly increases their willingness to report alleged violations. This tends to divert resources away from legitimate nuclear safety concerns to respond to false or insignificant allegations, and has a negative effect on the current enforcement policy on nuclear safety. Also, as previously mentioned, the policy does not encourage self identification of problems.

Secretary of the Commission Part II: Particular Features of the NRC Enforcement Policy

1. Are the tables of civil penalty levels set at appropriate amounts?

The civil penalty levels are far too high in comparison with fines levied elsewhere under federal regulatory policy for equivalent threats to the public health and safety (e.g., civil aviation). As a consequence, there is a strong incentive to avoid civil penalties by failure to identify violations and a strong negative impact on licensee and employee morale due to the exaggerated public perception of the nature and consequences of the violation.

2. Upward and downward adjustment of base civil penalties Failure to promptly identify and correct a violation, so as to preclude recurrence should result in substantial upward adjustment of base civil penalties. The only qualification here is that what constitutes "recurrence" needs elaboration. (For example, all violations can be characterized as a recurring failure to follow procedures.) However, implementation of downward adjustment of base civil penalties should be more liberal and consistent in the interests of self identification of violations.

3. Classification of violations by Severity Level The bases for classification should be clarified with respect to consistency among the functional areas and actual, as opposed to potential, risk to the public health and safety.

4. Policy on material false statements The Commission has recently been considering changes to their policy on material false statements. For the Commission and the NRC staff to make appropriate decisions concerning nuclear safety, an enforcement policy on material false statements is necessary. It is our understanding that the current changes envisioned for enforcement in this area will be more precise in the definition of "material false statements." We support a change to a definition that relies on the intent with which the false material was conveyed to determine whether such information is a material false statement or merely a violation.

Also, it is our understanding that current enforcement policy provides that when an investigation of a material false statement is ongoing that the licensee not be informed of the allegation. By following this procedure, the licensee does not have a good opportunity to comment or provide information not considered during the investigation that may impact its outcome. The result may be a determination that would be publicly available and could lead to a negative public perception based on information on which the

Secretary of the Commission licensee was not afforded the opportunity to comment. We suggest that once the NRC completes an initial stage of an investigation (i.e., when the NRC has completed field interviews), that the licensee be informed of the nature of the violation being investigated and, in addition, be provided an opportunity to submit whatever additional information it considers relevant to the investigation. In this way the licensee can not be considered to be "negotiating" with the NRC concerning the alleged violation but can be safeguarded in knowing that relevant information pertinent to the investigation has not been overlooked.

5. Relative emphasis on negative and positive incentives As indicated elsewhere in these comments, additional emphasis on positive incentives in the enforcement policy would significantly promote nuclear safety. In particular, licensees should be encouraged by every means to identify violations and to determine and publicize effective corrective action to prevent recurrence.

6. Progressive escalation of enforcement sanctions Fundamental to emphasis on positive incentives is that failure to implement effective corrective action, such that violations recur, will result in progressive escalation of enforcement sanctions.

Therefore, such escalation is appropriate for recurrence, provided that what constitutes recurrence is reasonably defined and not overly broad.

7. Enforcement procedures such as enforcement conferences, publicity policy, etc.

Enforcement procedures should mandate full discussion of facts, circumstances and implications thereof for safety, at each stage.

The public interest is not served by a lack of dialog between the NRC and the licensee prior to the NRC disclosing its findings and proposed enforcement action concerning a violation, particularly one identified by the licensee.

8. Supplement 8 of the revised enforcement policy No comment.

Part III Additional Questions:

1. Under what circumstances, if any, should the NRC impose sanctions directly on individuals responsible for violations?

Sanctions should be limited to persons licensed by the NRC and should involve suspension or revocation of the license only. Such suspension or revocation should occur only following a due process

Secretary of the Commission conclusion that the individual is not qualified to discharge licensed duties, pending some period of retraining in areas of identified deficiency, or indefinitely as a consequence of an instance of intentional disregard for the public health and safety.

2. What has been the effect of regionalization on the enforcement program and its implementation?

There have been too many other changes occurring in parallel with regionalization to accurately identify a particular effect on the enforcement program, and its implementation, of the regionalization process. However, it is important that a regulatory process of the great significance of the NRC enforcement program be implemented in a consistent and uniform manner. Not only does regionalization tend toward the contrary result, but it appears to increase the significance of subjective factors in implementation of the enforcement program. Objective standards, uniformly applied, are essential to a fair and effective enforcement program.

3. Does the present system identify root causes of violations so that effective corrective actions can be taken? Are lessons learned effectively promulgated to the industry and, if so, by what means?

Except for the strong negative incentive regarding self disclosure, as discussed elsewhere, it would appear that the present system does adequately cause licensees and assigned NRC inspectors to identify root causes of individual violations. However, the lessons learned are certainly not effectively summarized and promulgated to the industry. As implied in the question, this would appear to be due to the fact that no adequate means exists dedicated to this purpose. Existing evaluation resources are focused on a few, major incidents each year and not on the larger number of less significant violations. For your information, the NUS Corporation has initiated an information service program entitled TRENDS (trending, review and evaluation of non - conformance and deficiencies system) which will focus on sharing enforcement information to benefit the nuclear industry.

4. Should the NRC consider increasing its reliance for compliance on licensee self identification or evaluations of third parties?

No comment.

If you would like further details on these comments, please contact me at (818) 302- 1401 or Mr. Harold B. Ray at (714) 492 - 7700 ext. 59470.

Very truly yours,

GPU Nuclear Corporation Nuclear* 100 Interpace Parkway Pa rsippany, New Jersey 0 7054 - 1149 (20 1) 263-6500 TE LE X 136-482 W riter's Direc t Dial Number:

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• Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, DC 20555

Subject:

Request for Written Comments to the Ad Hoc Advisory Committee for Review of Enforcement Policy The staff of GPU Nuclear Corporation herewith submits comments on the subject item. Comments were requested in a January 9, 1985 Federal Register notice (50 FR 1142). These comments are organized as follows: our general comments on the subject are stated below, while the questions posed in the Federal Register notice are answered in Enclosures 1 and 2.

Primarily, we believe the NRC Enforcement Policy should focus on identifying the root causes of violations and the promulgation of these causes to the industry. To accomplish this, the Enforcement Policy should be modified to include an emphasis on positive incentives, especially if the licensee finds and corrects its own problems.

A policy with a focus on root cause identification and positive incentives will improve overall enforcement and minimize the need for NRC sanctions and decrease the need for third par i aluations. This focus would also foster a willingness on the part of emplpyees to report alleged violations through licensee channels. *

• MAR 111985

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If the NRC Enforcement Policy, which now often demoralizes licensee employees and unnecessarily alarms the general public, could be modified in the ways we have suggested, everyone involved--licensees, NRC, general public--would be better served.

Sincerely, 1~

J. R. Thorpe Director Licensing & Regulatory Affairs RPJ:dls:1496f Enclosures

Enclosure l GPU Nuclear Responses to Questions Dealing With the Effects of the Enforcement Policy Question No. l Are the Tables of Civil Penalties set at appropriate amounts?

Question No. 2 What is the effect of upward and downward adjustment of the base civil penalties?

Response

Established penalty levels provide an indication of the seriousness of the violation. The amount of the penalty, permissible or actually imposed, is less of a deterrent than the prompt imposition of other enforcement actions. Consideration should be given to better/more frequent use of management conferences in the enforcement process.

Quest ion No. 3 What is the effect of classification of violations by severity level?

Response

The severity level should be tied to the safety significance of the violation and as such, the severity levels are too high for all activity areas when compared to the Reactor Operations category.

Question No. 4 What is the effect of the Policy on material false statements?

Response

The Commission has previously asked if their emphasis on material false statements has had a positive effect on the quality of communications between the Licensee and the NRC or whether it has tended to have a 11 chilling effect on such communications?

11 Although the nature of GPU Nuclear communications with the NRC have not specifically been influenced by the material false statement provisions, the Commission emphasis is attended by a potential chilling effect.

11 11 In addition, it is not apparent that it has served the intended purpose of discouraging material false statements. It is our intent to ensure all communications to the NRC are correct and true statements. However, there tends to be an atmosphere of mistrust generated between the NRC and the Licensee; a condition we have worked hard to avoid. It is

discouraging to observe the Commission continuing to seek ways to characterize Licensee actions in terms of potential for material false statements.

Definition and assignment of five potential categories of severity for material false statements potentially will impede free and open communication between the Licensee and the NRC. It is reasonable to expect the Licensee will be much less willing to offer judgment opinions when hard facts are not available. Thus, the NRC will not be privy to significant information unless such information can be verified through documentation.

The definition of "material false statement should be changed to apply only to written statements submitted under oath. Materiality should be contingent upon the safety significance of the underlaying information and should be dependent upon a determination of intent. The effect of these changes would be to improve communication between Licensee and the NRC and would generate increased willingness on the part of the Licensees to share tentative or preliminary information with the NRC in a more timely manner.

Question No. 5 What is the effect of the relative emphasis of negative and positive incentives?

Response

The current NRC Enforcement Policy relies too heavily on punishments as a deterrent rather than positive incentives. Licensees should be encouraged to have strong programs which provide for self-identification and correction. Deviations from the regulations which are uncovered by the licensee which do not involve a serious immediate safety threat and which were reported, if required, promptly, should not be called violations. They instead should be referred to as "licensee-identified and corrected deviations" for which no further NRC action is required.

Question No. 6 What is the effect of progressive escalation of enforcement sanctions?

Response

Section V of the policy states that "With very limited exceptions, whenever a violation of NRC requirements is identified, enforcement action is taken." This fact seems to set the overall negative tone of the NRC's Enforcement Policy. Why should any "enforcement action" be necessary when a licensee, through aggressive actions on its own, identifies and corrects deviations from the regulatory requirements?

THe idea of progressive escalation makes sense but it is not clear that it is being uniformly implemented or having the desired effect.

Question No. 7 What is the effect of enforcement procedures such as enforcement conferences, etc.?

Response

Management conferences are under-utilitized by the NRC. These conferences provide a more conducive environment for discussion and problem resolution than enforcement conferences. In a management conference, difference in interpretation, difficulties in meeting NRC guidance, and other areas can be discussed and resolved in an open and frank manner. This can result in the resolution of differences between the licensee and the NRC to the benefit of all parties.

Question No. 8 No comments.

Enclosure 2 GPU Nuclear Responses to Supplemental Questions Question No. l Under what circumstances, if any, should NRC impose sanctions directly on individuals responsible for violations?

Response

The management of licensee employees should be left to the licensee.

The only exception to this should be in the infrequent occurrence of severe cases when the Department of Justice should become involved, rather than the NRC. In any case, caution must be taken to preserve "due process" in all proceedings.

Question No. 2 No comments.

Quest ion No. 3 Does the present system identify root causes of violations so that effective corrective actions can be taken? Are lessons learned effectively promulgated to the industry and, if so, by what means?

Response

The present system does attempt to identify the root cause of violations so that effective corrective actions can be taken. NRC is inconsistent with respect to the depth and detail of their inquiry into the 11 root cause" of a violation.

NUREG 0940 does promulgate enforcement actions taken by the NRC; however, Licensee responses to these enforcement actions often are not included.

In addition, the summary section of the document does not address the "lesson learned" issues with respect to enforcement actions. Thus, useful information often is not shared industry-wide in a systematic way. No one has yet recognized the manpower resource required on both the NRC and the licensee's organizations to accomplish this dissemination of information in a complete, timely and useful manner.

Question No. 4 Should the NRC consider increasing its reliance for compliance on licensee self-identification or evaluations of third parties?

Response

Yes. There is an industry-wide effort to improve operations and comply with NRC requirements. In this regard, any action taken by the NRC to penalize a licensee for non-compliance discovered as a result of licensee reports or discovery by third party evaluations (such as those performed by INPO) would have a negative effect on this self-policing function. It is recognized that events which significantly endanger the public health and safety should be subject to the appropriate enforcement action; but, items of non-compliance discovered by parties other than the NRC for which appropriate action has been taken, including reporting of the event to the NRC, as required, should not be subject to enforcement action

• Westinghouse Water Reactor ooc,..:.:. i ED U. N. C Nuclear Technology Division Electric Corporation Divisions Box 355

'85 r.,\, 11 A10 :45 Pittsburgh Pennsylvania 15230 GFFICE JF SfC Rf: TA1 BY NS-NRC-85-3016 OOCKC.: :Mi & SEi*\ 1r :_ PA-85-383 BRANCH

,.Eebr:ua ry 28, 1985 John C. Hoyle, Secretary U.S. Nuclea r Regulatory Commission Washington, D.C. 20555

- ATTENTION: Docketing and Service Branch

SUBJECT:

Comments to Ad Hoc Advisory Committee for Review of the Enforcement Policy

Dear Mr. Hoyle:

Th i s letter is submitted by Westinghouse Electric Corporation ("Westinghouse")

to the Nuclear Regulatory Commission ("Commission") Ad Hoc Adviso ry Committee for Review of the Enforcement Policy ( 11 Commi ttee 11 ) to submit comments on the Commission's enforcement policy . The Committee's request for written comments was published on January 9, 1985 (Fed . Reg. Doc.85-654).

The Commission's enforcement policy was published for comment in 1980. At that time, Westinghouse submitted a letter of comments, NS-TMA-2360, attached. Our general position has not changed with the exception that we now b~lieve that the definition of a "violation" needs to be changed.

The Appeal Board in Callaway has made clear that perfection in not required by the Commission's regulations, reference Docket No. STN 50-483-0L; ALAB-740; 18 NRC at 346, (1983). It should follow that, on this basis, not all deviations from Commission's regulations should be classified as violations. We submit that if a licensee has an acceptable program for identifying *and evaluating deviations and takes prompt corrective action as appropriate, those deviations should be classified as nonconformances even if the~ *nvolve what would now be termed a violation. Failure to take appropriate actio ri., t iwely manner could raise the deviation to the level of a violation dependin , the circumstances, for example, if management ignores the deviation after lea r.ning that it had significant safety implications. Failure to have an adequate process for ide ntifying and evaluating devations could also be a violation in and of

u. S. NI.IC-I fA.~ 1UGOI ~~~, COMMtt$011 DOCKETING & SIRYICf -.,1C1t4 OFFICE OF THE SECMtAIY OF THE COMMISSICN Document Statistict 3)2/t_s___

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NS-NRC-85-3O16 PA-85-383 February 28, 1985 Page 2 of 2 itself if an unacceptable number of deviations were to go undetected for an extended period of time (See the above referenced language of the Callaway Appeal Board decision on this point). A system of this type could provide incentives for early identification and correction of deviations adversely affecting the safety margins of the facility and we believe this change in definition would be worthy of further consideration.

Westinghouse is pleased to have this opportunity to provide our convnents for your consideration. Should you have need for further discussion on any of the comments, due not hesitate to contact me.

Very truly yours, WESTINGHOUSE ELECTRIC CORPORATION

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E. P. Rahe, r , Manager Nuclear Safet Department Attachment RAW/PTM/krm

f Westinghouse Water Reactor Nu:lear Technolo~ Dlv1s1on Electric Corporation Divisions Box 355 Plttsbur11:h Pennsylvania 15230 December 30, 1980 NS-TMA-2360 DA-EJH-80-174 Mr. Samuel J. Chilk, Secretary U. S. Nuclear Regulatory Commission Washington, D. C. 20555 Attention: Docketing and Service Branch

Subject:

Corrments to Proposed General Statement of Policy and Procedure for Enforcement Actions

Dear Mr. Chilk:

This 1etter is submitted by Westinghouse Electric Corporation ( Westinghouse J 11 11 to the Nuclear Regulatory Corrmission. ( Co1T111ission to submit corrments 11 11

)

on the Commission s enforcement program, to be codified as Appendix C to 1

10CFR Pa.rt 2. The Commission's invitations for*corrment were published on October 7, 1980 (45 Fed. Reg. 66754) and October 17, 1980 (45 Fed. Reg. 69077).

In this submittal, Westinghouse makes these three points: First, the proposed fine schedule is confiscatory in that instances come readily to mind where application of separate fines for each day's continued violation might approach or exceed the value of a facility. Second, the schedules of fines require modification to result in different levels of fines to differentiate between instances where there is only the mere potential of hann to the health and safety of the public from instances where hann results. If harm results, then the fine for similar events should be similar, no matter which type of licensee is involved or the presumed ability of the licensee to pay. Westinghouse believes that the discretionary 50% reduction in the fine schedule for self-regulation and reporting the subject occurrence to the Corrmission should be 100% for the first violation of the same type in arty one reporting period, and that the reduction should be made automatic. Thirdly, the focus on operations of licensees' activities is appropriate.

1. The Proposed Fine Schedule is Confiscatory The proposed regulations (and, indeed; the statute pursuant to which they were drafted) are potentially confiscatory. As such, they are improperly denominated "civil penalties". Because they more closely appear to be criminal in nature, they should contain a 11 of the due process procedures nonna lly afforded a crimtna l defendant.

To illustrate their confiscatory nature, witness the instance of an occurrence which is neither known nor*reasonably known by a licensee. The cumulative fines in such an instance may approach or exceed one million dollars. On tts face, a fine schedule subjecting a licensee to this magnitude of a fine is unreasonable.

Mr. S. J. Chilk December 30, 1980

• The proposed mitigating mechanism of allowinq reductions in such a fine depending

, on a licensee s ability to pay affords too great a level of administrative 1

discretion. Licensees responsible for the same or similar violations resulting. in hann to the healtn and safety of the public should be treated alike, as discussed below. Imposing a larger fine on a licensee with a greater presumed liability to payli than on one with a lesser presumed liability to pay would deny the equal 11

. protection of the laws to the first, because it would be placed in a different category for purposes of enforcement action without a rational basis therefore.

That is, since the harm is what is to be protected against, licensees* causing that hann should be penalized equally which would recognize the similarity in the harm which they cause.

This problem is aggravated when considering the case of a licensed facility owner whose policy it is both to defend its separately licensed operator/employees against charges arising as a result of the perfonnance of their duties, and to pay resultant fines, if any. It is possible, under the regulations as now draftect, that more than one licensee at a facility (e.g., the owner and the individual operators/licensees) may separately be assessed fines for* one occurrence, the total of which might e~sily exceed $100,000.00 per day.

Therefore, the regulations need to clarify that only one fine will be assessed per occurrence per day, no matter how many individuals may have been involved ..

2. The Schedule of Fines Requires Modification Westinghouse strongly disagrees with the Commission s staff's conclusion that 1

11 the potential for an event [is] of similar seriousness as the occurrence of the event itself. The operation of a licensed facility, of necessity, carries with.

11 it some risk of hann, which, until realized, should *not be puni'shed to the*same extent as the harm itself. The inclusion of redundant safety systems, and re-current testing and inspection during all phases of design, fabrication~ construction and operation, each minimize, but do not remove this risk. Inherent in this defense in depth concept is that while one or another of the systems may have failed, never-

-. theless, shutdown may occur without harm or undue risk of hann.

Westinghouse argues that the mere potential for an event is significantly less harmful than the event itself, and should be occassioned by a penalty significantly smaller than the penalty assessed if the harm had resulted.

Therefore, if hann results, it should be penalized more severely.

Furthermore, since it is the harm which is to be. avoided, if harm results it should be penalized equally with no regard.to the type of license ~assessed or the presumed ability of the licensee to pay.

Westinghouse also believes that the proposed discretionary 50% reduction in*a fine attendant upon a license s identification of a violation, its correction and 1

reporting it to the NRC (where required) suffers from the defect t~at it will not encourage lice~see self regulation in that civil penalties will still be imposed.

If the reduction were increased to 100%, licensee self regulation would be encouraged and a free flow of safety information would follow.

Mr. S. J. Chilk December 30, 1980

3. The Focus on Licensees Operations is Appropriate Westinghouse believes that the thrust of the proposed enforcement policy is directed towards assuring that licensees observe safe and environmentally acceptable operations. Our corronents are based on this fact; that is, the proposed enforcement policy is directed to licensees with impact on vendors and supply firms only in the area of failure to report under the provisions of 10CFR21.

The specific responses of Westinghouse to the nine questions in the October 17 Notice are attached, as are comments directed to specific provisions of the proposed policy. Westinghouse appreciates this opportunity afforded it 5y the Corrmission to comment on this subject.

Very truly yours, r

T. M. nderson, Manager Nuclear Safety Department RAW/EJH/rjs Attachments

ATTACHMENT A Westinghouse WRD has comments to the nine questions identified in 45 Fed. Reg. 609077 (October 17, 1980) as follows:

Question l: Is the policy fair and equitable?

Westinghouse Comment: No, as indicated in our cormnents to Question 3, we are concerned with the relative civil penalties assessed different licensees for a given violation.

Question 2: Is the policy understandable?

Westinghouse Connnent: No, it is unclear what licensee-type a low-level fuel fabrication facility is considered to be in tenns of Table l.

Question 3: Are the severity levels appropriate?

Westinghouse Connnent: No. Westinghouse does not agree that the potential for an event is of similar seriousness as the occurrence of the event itself. Further, Westinghouse believes that civil penalties should be assessed equitably with respect to occurrence in tenns of Table 1, that is any actual occurrence should be penalized at the same level, correspond-ing to the actual effect on the public health and safety regardless of the licensee's ability to pay.

Also, Supplement III lists all SNM theft, loss, diversion and failure to report the same as Severity I. Although this may be appropriate for SNM category I, it is much too severe for SNM category III materials, for example.

The lower levels of SNM should be removed from Severity I.

Furthennore, category III material enriched to 5% or less in uranium 235 should 'be considered a de minimua level below which there should be no regulatory concern, or at most Severity VI.

Question 4: Are the different types of activities well enough defined? Should there be others?

Westinghouse ColllTient: Unclear;fuel fabrication plants licensed to process uranium enriched to 5% or less in uranium 235 should be exempt from the Table l 11 Types of Licensees II or at most be listed with 11 all other licensees and persons subject to civil penalties."

The potential for such a plant to have any effect upon the public health and safety, corrmon defense and security, and the environment is very slight.

Question 5: Are the distinctions among various types of licensees shown in Table l appropriate?

Westinghouse Comment: No, it is unclear what licensee type a low-level fuel fabrication facility is considered to be. Also,. see the Westinghouse comments to Question 3.

Question 6: Are the factors for determining the level of enforcement actions appropriate? Should there be others?

Westinghouse ColllTient: Unclear; what is the intent of Table 2 concerning repetition of similar violations? Westinghouse assumes

• that the column labelled lst is meant to signify the 11 11 first rep~tition of a similar violation under the same license. Also, similar, as used in Table~' is too vague a term. What degree of similarity is required before Table 2 is used? -

Question 7: Is the degree of discretion allowed to Office Directors appropriate?

• should there be more flexibility? Less?

Westinghouse Corranent: Unclear; what degree of discretion lies with the Office Directors and what_ is meant by the term Office 11 Director ? Westinghouse recorrmends that all civil 11 penalties associated with Severity Level III or above be determined by the Director of the Office of Inspection and Enforcement. *

• Question 8: Are the l~vels of civil pena1ties that require ColllTiiss*ion involve-ment appropriate? Should they be higher? Lower?

Westinghouse Corrment: Westinghouse recorrmends that all civil penalties above

$100,000 be approved by the CoITD11ission.

Question 9: Are the provisions for escalated action set forth in Table 2 appropriate?

Westinghouse Corrment": The intent of Table 2 is unclear concerning the repetition of similar violations. Westinghouse assumes that the column labelled lst is meant to signify the 11 11 first repetition of a similar violation under the same license. Similar, as used in Table 2, is too vague a term. What degree of similarity is required before Table 2 is used? Also in this.Table, what is d = further 11 action as appropriate ?

11

ATTACHMENT B

• Westinghouse has specific detailed co1T1Tients to various portions of the proposed enforcement policy as follows:

0 Section IV F Table 2 indicates that the third repetition of a similar violation wifl result in enforcement action d which is defined as 11 11 "further action, as appropriate".

Westinghouse Corrment: As previously stated, it is unclear what the intent of Table 2 is concerning repetition of similar violations. Westinghouse assumes that the column labelled 3d is meant to signify the third repetition (fourth 11 11 occurrence) of a similar violation under the same license. Similar, as used in Table 2 is too vague a term. What degree of similarity is required before Table 2 is used, 0

Supplement I, Severity I includes violations involving 11 A Safety Limit,-as de-

• fined in the Technical Specifications, being exceeded; 11 Westinghouse Corrment:

Severity I - Safety Limit as defined in the T.S. is too broad. Some qualification relative to the potential serious impact on safety is required as is included in most of the- other categories in this section.

0 Supplement I, Severity IV includes violations involving inadequate review or

-the failure to make a review in accordance with 10CFRS0.59 or 10CFR21.

Westinhouse Comment: Inadequate review in accordance with 10CFRS0.59 or 10CFR21 is overly subjective. This will result in technical desagreement between NRC aad the licensees which should not result in civil penalties.

0 Supplement III, Severity I 11 Actual entry of an unauthorized individual ... 11 Westinahouse Corrunent: How is 11 the time of entry 11 to be defined? If the unauthorize indivi ual is detected after he has entered the vital or material access area, is this still considered a violation? If the entry occurs and is detected, this seems less severe than if protection or.control was not provided in the first place, as discussed in the Westinghouse Corrunent to Supplement III, Severity III below.

0 Supplement III, Severity I includes actual theft, loss, or diversion of special nuclear material (SNM) or an act of radiological sabotage; or failure to promptly report an actual or attempted theft or div_ersion of SNM or an act of radiological sabotage.

Westinghouse Corrment: To categorically list SNM in this supplement as Severity 11 11 level I fails to recognize the subdivisions of SNM which are generally recognized in the balance of this supplement. The above paragraphs should apoly onlv to Category I SNM.

0 Supplement III, Severity II specifies Breakdown of security systems *** such 11 that access could have been gained without detection 11

• Westintouse Conment: This does not adequately define the intent of the category; would reakdown of any one system in a multitiered system be cause for violation?

It is suggested that this be revised to read, 11 Breakdown of the overall security system without evidence of compensatory action._.. 11 0

Supplement III, Severity III 11 Failure to provide protection or control of access to a vital area or material access area 11 is Severity Level III, while Supplement III.B. l, Breakdown of security systems ... such that access could 11 have been gained without detection, is the higher Severity Level II.

11 Westinghouse Corrment: It appears that the breakdown of an existing system is considered a more severe violation that the failure to provide a system in the first place. Westinghouse believes these priorities should be reversed.

0 Supplement III, Severity IV Failure to establish or maintain safeguards systems 11 designed or employed to detect the unauthorized removal of Category- III SNM from areas of authorized use or storage".

Westinghouse Corrment: An SNM Category IV should be established for uranium enriche to less than 5% in uranium 235. This new Category IV should be established as a de minimus level for which there should be no regulatory concern, or *at most a Severity level VI.

• 0 Supplement IV Westinghouse Comments: Some of the violation ccndition_s in Supplement IV -

Health Physics 10CFR2Ot page~6'159-- appear to be out of line with others in the same category. For example, item 4 - a radiation level of 100 mrem/hr for one hour does not seem to be consi$tent with item 2 (exposure of a member of the public in excess of 0.5 rems).

Severity I Fuel Cycle Operations - violations involving a nuclear criticality do not appear to be in the same severity class as 11 a system designed to pre-vent or mitigate a serious safety event not being operable when actually re-quired to perfonn its design function 11 as discussed in Attachment 11 A11 ,

Question 3. _

Severity II Fuel Cycle Operations - Item 3, failure to make 11 an iITITiediate or prompt report required to be made by telephone or other electronic means 11 does not appear to belong in the same category as the other II items. Making a prompt report would seem to be secondary to evaluating a safety hazard and preventing an accident. Also, certain mitigating circumstances could make this impossible or very difficult to perfonn (e.g., phone lines are overcrowded or are out of service). Thus, the prompt notification requirement appears to be a much lower class severity (perhaps IV or VI) than indicated.

Fuel Cycle operations, Severity Classes V and VI. Severity Class Vis de-fined as "other violations, such as failure to follow procedures, that have other than minor safety, or environmental significance". Severity VI is de-fined as "Violations that have minor safety *or environmental significance".

Who will define "other violations" and wh~ther they fall in the "minor" or "other than minor" category? The NRC inspector will undoubtedly make some arbitrary decisions based on his judgment and these will have to be separated from the Class IV violations, which are defined as failure to follow require-11 ments not covered in Severity Levels I, II, and III violations, that reduces margin or safety 11

• The above definitions are vague which leave much to the regulator's and licensee's judgment to decide .

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February 28, 1985 W3P85-0527 3-Al. 16. 07 A4.05 Secretary of the Commission U. S. Nuclear Regulatory Commission Washington, D.C. 20555 Attention: Docketing and Service Branch

Subject:

Louisiana Power and Light Comments on NRC Enforcement Policy

Reference:

Ad Hoc Advisory Committee for Review of Enforcement Policy; Request for Written Comments - 50 FR1142 In response to the above referenced request for comments, Louisiana Power and Light Company is pleased to provide for your review our input with regard to each of the questions raised.

I) What effect, if any, has the enforcement policy had on:

(1) The prompt detection and correction of violations by licensees?

We feel that the increased severity of NRC enforcement policy, has had a positive effect on Licensee actions in this regard. The newness of this policy however and the variability of its interpretation has caused both confusion and hesitance on the part of many licensee personnel. More time is required to answer this question; (2) The prompt reporting of violations by licensees?

Same as_ (1);

(3) The prevention of violations by licensees?

NRC enforcement policy has tended to emphasize after-the-fact actions rather than prevention. While it is true that a higher degree of attention has been afforded prevention of violations due to the specter of possible enforcement actions, the effect of this attention has been minimal . Better operating practices and managerial capabilities employed by licensees has done more to prevent violations from occurring than has NRC enforcement policy.

However, the enforcement policy has prompted more complete and timely resolution of violations, which aids in preventing future violations. As time progresses, this may instill a more cognizant attitude within the management of licensees, thereby aiding in the prevention of violations; MAR 7

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Secretary of the Commission U.S. Nuclear Regulatory Commission W3P85-0527 Page 2.

(4) The safety record of licensees?

Our response to question (3) is also applicable in meaning to this question; (5) The morale of licensees and their employees?

This question is difficult to assess and answer. There has been little direct effect on employee morale due to NRC enforcement policy. However, the manner in which this enforcement policy has been implemented has tended to place the licensee into an adversarial position with the NRC. This in turn has caused conflict between various departments and personnel with the licensee organization thereby endangering morale. The impact of this, however, has been minimal; (6) The public's confidence in the Commission's enforcement program?

We feel that the public's confidence in the Commission's enforcement program has been eroded by the enforcement policy rather than enhanced. While this may seem contradictory, one must realize the increased level of publicity afforded to violations and NRC actions as a result of the enforcement policy. What the public reads and hears is mostly detrimental to the reputations of both the licensee and the Commission, primarily due to the way in which it is presented. The public does not realize that prior to implementation of the enforcement policy licensee's performance may have been much worse, but the public was unaware of it. Now that more publicity is being given to enforcement actions, the public's confidence in the licensee has been shaken, resulting in questions being raised as to the competence of the Commission as a regulatory body; (7) Willingness of workers and members of the public to report alleged violations?

In this area the enforcement policy has been quite successful, perhaps overly successful. Both workers and the public are willing and able to report alleged violations. At times, however, this leads to an overabundance of allegations, burdening the licensee and the Commission with their resolution.

II). Comments are provided on the following specific features of the enforcement policy:

(1) Are the tables of civil penalty levels set at the appropriate amount?

We agree with the table amounts as they are;

Secretary of the Commission U.S. Nuclear Regulatory Commission W3P85-0527 Page 3.

(2) Upward and downward adjustment of base civil penalties.

We agree with the adjustment policy as is; (3) Classification of violations by Severity Level.

We agree with the classification scheme as is; (4) Policy on material false statements.

We feel that this policy requires much attention. The wording of the Commission's policy on material false statements and indeed its application of this policy is unduly vague and subject to variance. At the present time any statement made which is false, intentionally or unintentionally, can be considered a material false statement. Furthermore, a statement made today which is correct can be considered a material false statement of some future time should conditions change such that the statement is no longer true. We feel that further clarification is required in this matter; (5) Relative emphasis on negative and positive incentives.

We feel that too much emphasis has been placed on negative incentives and too little on positive incentives. At the present time the enforcement policy emphasizes violations and civil penalties which constitute "after-the-fact" actions - negative incentives. However, no such incentives exist, other than avoiding enforcement actions, for prevention of conditions which may lead to violations - positive incentives. An approach analogous to that used with regard to the emergency preparedness annual drill could prove beneficial. In this case a successful drill can be used as a basis for exemption from the next year's annual drill, thereby inciting the licensee towards better performance; (6) Progressive escalation of enforcement actions.

We agree with the policy as is; (7) Enforcement procedures such as enforcement conferences, publicity policy, etc.

We agree with the enforcement procedures but, as stated in our response to question 6 of part I, one must realize the negative publicity generated by such actions;

Secretary of the Commission U.S. Nuclear Regulatory Commission W3P85-0527 Page 4.

(8) Supplement 8 of the revised enforcement policy.

We agree with the addition of Supplement 8 and its purpose, but find it unduly harsh. With the exception of a severity level I violation as defined by Supplement 8, each of the guidance statements identified with a particular violation severity level should be relaxed by one level of severity.

III) Comments are provided on the following specific questions.

(1) Under what circumstances, if any, should the NRC impose sanctions directly on individuals responsible for violations?

Sanctions should only be imposed upon individuals in cases where purposeful wrong doing can be proven and such wrong doing is in direct conflict with regulations. The burden of proof of purposeful wrong doing should be placed on the Office of Investigation. Repeated actions by a single individual resulting in repeated violations of a similar nature could also be considered sufficient for sanctions to be imposed; (2) What has been the effect of regionalization on the enforcement program and its implementation?

The impact of rationalization on the enforcement program has been in two primary areas, one positive and one negative.

Regionalization has been positive in that the inspectors and regional managers have been able to become more familiar with the licensees, plants and licensee personnel within their particular region. This has lead to a closer dialogue between the licensees and their regional management and has given the regional inspectors and managers a stronger technical knowledge specific to their region. However, regionalization has also lead to differences in interpretation and implementation of the enforcement policy. The enforcement policy of each region is strongly influenced by the personalities and policies present in that particular region; (3) Does the present system identify root causes of violations so that effective corrective actions can be taken? Are lessons learned effectively promulgated to the industry and, if so, by what means?

The present system does not in all cases go far enough in identifying the root causes of violations. However, this is a learning process, one in which the industry is still involved.

Secretary of the Commission U. S. Nuclear Regulatory Commission W3P85-0527 Page 5.

In time, the enforcement policy should be more effective in this regard. The dissemination of information, however, needs much improvement. The only useable sources of information pertaining to violations and lessons learned from the same come from independent sources - i.e., contract firms involved in disseminating information. More effort should be expended in this area by both the industry and the commission; (4) Should the NRC consider increasing its reliance for compliance on licensee self-identification or evaluation of third parties?

The NRC should rely more so on licensee self-identification than on third party evaluations. We have not found third party evaluations to be as meaningful and effective as those performed internally. As the industry moves along its learning curve with regard to enforcement policy, such self-evaluations will become more and more meaningful.

Thank you in advance for your consideration.

~(bl K. W. Cook KWC/RAS/smb cc: E. L. Blake, W. M. Stevenson, R. D. Martin, D. M. Crutchfield, J. Wilson, G. L. Constable NS40788RCG

consumers Power David J VandeWalle company Director of Nuclear Licensing General Offices :

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A CJi March 4, 1985 Secretary of the Commission U.S. Nuclear Regulatory Commission

• Washington, D.C. 20555 Attn: Docketing and Service Branch Consumers Power Company comments in response to the request for written comments by the Ad Hoc Advisory Committee for Review of Enforcement Policy (50FR1142, January 9, 1985) were submitted by letter dated February 27, 1985.

The notice also requested commenters to indicate their willingness to make an oral presentation of their viewpoints to the Committee during a public meeting. Consumers Power Company would be willing to make such a presentation. You may contact me directly regarding this presentation.

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FEB 2 8 1985 - \ -.I Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Attn: Docketing and Service Branch SUSQUEHANNA STEAM ELECTRIC STATION RESPONSE TO REQUEST FOR COMMENTS AD HOC ADVISORY COMMITTEE FOR REVIEW OF ENFORCEMENT POLICY ER 100450 FILE 841-11 Docket Nos. 50-387 PLA-2413 and 50-388

Dear Mr. Chilk:

In response to the Federal Register Notice (50FR1142) by the Ad Hoc Advisory Committee for Review of Enforcement Policy, Pennsylvania Power & Light Company is pleased to provide the attached response to the Committee's request for comments.

The Notice indicated that the Committee may wish to have representative viewpoints summarized orally and requested that commenters indicate their willingness to make such a presentation. PP&L would appreciate the opportunity to address the Committee. Please contact Mr. William E. Barberich, Manager, Nuclear Licensing at (215) 770-7850 to make arrangements.

Very truly yours,

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Vice President-Nuclear Operations Attachment cc: Ms. Karen Cyr Dr. Thomas E. Murley Office of the Executive Legal Director Regional Administrator, Region 1 U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 631 Park Avenue King of Prussia, PA 19406 Ms. M. J. Campagnone - USNRC Bethesda Mr. R.H. Jacobs - USNRC Resident Inspector

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Attachment to PLA-2413 Response to Ad Hoc Advisory Committee for Review of Enforcement Policy What effect, if any, has the enforcement policy had on:

1) The prompt detection and correction of violations by licensees:

It is not evident that the policy has had any effect on the detection of violations by licensees. Rapid and complete corrective action is normally taken when a violation occurs. While the enforcement policy may add some incremental motivation, it is not a significant factor in causing corrective actions.

2) The prompt reporting of violations by licensees:

It is not evident that the policy has had any effect on the reporting of violations. Reporting is required. It does not appear that the enforcement policy is considered by the licensee when faced with this requirement. Willful failure to report has not been identified as an enforcement problem.

3) The prevention of violations by licensees:

Prevention of most violations is a matter of licensee performance which is probably not particularly influenced by the policy.

4) The safety record of licensees:

It is not evident that the policy has had any effect on the safety record of licensees.

5) The morale of licensees and their employees:

The policy has clearly had a negative impact on licensee employee morale.

The greatest impacts are on those whose actions, however well intentioned, resulted in enforcement action. The fact that the enforcement process drags on for months ending with negative newspaper headlines heightens the effects on morale. In addition, fears regarding the possibility of sanctions against individuals are a genuine concern.

6) The public's confidence in the Commission's enforcement program:

As a licensee, it is not clear what perception the public has concerning the policy. However, it is clear that the bad press associated with elevated enforcement action undermines public confidence in the licensee.

(This must be especially true where Material False Statements are involved.) The public is only aware of the enforcement policy to the extent that it reads newspaper accounts. These accounts usually appear when the civil penalty is proposed and deal almost exclusively with the "wrongdoing" that resulted in the violation. Any subsequent positive developments rarely come to the public's attention. Since the initiating event may also have been covered by the press and the payment of the

Attachment to PLA-2413 penalty is also frequently noted, a single enforcement action can result in negative press two or even three times. The public may even be left with the impression that the licensee has been fined more than once. It is for this reason that PP&L has declined to argue for mitigation of proposed penalties. The potential negative press coverage of the licensee's reply and NRC's final decision are judged to outweigh the possible benefits of partial mitigation. Legal appeals would result in even further opportunities for negative press. Even if complete mitigation were achieved, it is unlikely that the public would connect the facts. It is difficult to erase the negative impressions formed months earlier.

7) The willingness of workers and members of the public to report alleged violations:

It is not evident that the policy has had any effect on the willingness of workers and members of the public to report alleged violations. For the average worker, his primary exposure to the NRC enforcement policy is the NRC Form 3 which is required to be posted and which describes the employees rights as an informant.

Comments on features of the enforcement policy:

1) Are the tables of civil penalty levels set at appropriate amounts?

According to the policy, the tables have been designed to reflect the licensee's ability to pay. The policy also professes that noncompliance should not be economically profitable. However, it is clear that except for the few very large penalties, the typical penalty does not represent an economic incentive toward compliance. The attendant publicity far outweighs the dollar amount in significance. The dollar amounts have been established at arbitrary levels which are probably too high for the typical level III violation, but any other amount suggested would also be arbitrary. It is the fact of the penalty and not the amount which carries significance.

2) Upward and downward adjustment of base civil penalties:

This is an important feature which has been recently improved but which could be further improved. Civil Penalties should not be assessed at all where the licensee's corrective action as presented at the enforcement conference is judged to be satisfactory. Penalties should be reserved for willful or negligent violations or situations where the licensee's corrective action is inadequate. In the latter case, an order could be considered in lieu of the penalty, if appropriate. In addition, minor adjustments up or down have almost no significance. The fact that a penalty is assessed has the greater significance. More prevalent use of complete mitigation for acceptable corrective action would represent a truly positive incentive to the licensee. Once the penalty is proposed, partial mitigation is doubtfully worth pursuing due to the negative effects of the additional media coverage.

Attachment to PLA-2413

3) Classification of violations by Severity Level:

Classification by level of severity is generally appropriate, but this need not be automatically associated with a dollar penalty amount. It is our experience that there is little difference between the Level IV and V violations as far as they are treated by the NRC and the licensee. The distinction could be eliminated with little effect.

4) Policy on material false statements:

This is an area which is of great concern to the industry due to the strict liability standard which is still applied in at least some instances. This can result in potential abuse or misuse and can unnecessarily and inappropriately undermine public perceptions regarding licensee integrity. PP&L believes that Material False Statements should be restricted to written statements where a careless disregard for accuracy or a willfulness or intentional effort to deceive the NRC can be demonstrated and where the information has safety significance. We would oppose limiting the definition to statements made under oath since this would likely result in requirements for most submittals to be sworn statements.

5) Relative emphasis on negative and positive incentives:

Current incentives are primarily negative. No licensee can achieve absolute compliance. The biggest incentive which could be provided would be total mitigation of penalties based on acceptable corrective action following issuance of the Notice of Violation. As currently administered, the NRC generally imposes civil penalties based on the seriousness of the event, with insufficient consideration of subsequent corrective action.

Penalties, if appropriate, should be proposed promptly after the event instead of months later. The current policy results in very negative media coverage at the time of the event and then again many months later.

The notice of violation should be issued promptly and then the decision on whether or not to impose a civil penalty should be based on the NRC's satisfaction with the corrective actions taken by the licensee. These should be the topic of discussion at the Enforcement Conference which should be scheduled promptly instead of waiting until after the issuance of the NRC inspection report many weeks later.

The issuance of a proposed civil penalty should then be considered only where willfulness or gross carelessness is involved or where corrective action is or has been inadequate. NRC's current practice of issuing numerous "small" penalties (less than $100,000) undermines public confidence in the industry and does little if anything to further NRC's announced purpose for enforcement action. By the time the penalty is proposed, the licensee has usually completed the majority of his corrective action. The penalty then becomes a purely punitive measure.

Attachment to PLA-2413

6) Progressive escalation of enforcement sanctions:

This is an appropriate feature of the policy.

7) Enforcement procedures such as enforcement conferences, publicity policy, etc.

Enforcement conferences are a valuable opportunity for the licensee and NRC to exchange information. They should be a basis for mitigation of penalties. The publicity policy should be revised to provide advance notification to the licensee. Recent improvements have been helpful toward giving the licensee sufficient opportunity to prepare for media inquiries, but advance notice would enable licensees to be fully prepared to answer questions. (It should be noted that 10CFRS0.73, which took effect on January 1, 1984, requires licensees to notify NRC when press releases are planned for this same reason.) --

8) Supplement 8 of the revised enforcement policy:

If reasonably implemented, this supplement should have little impact on licensees. However, if NRC attempts to second guess every licensee event classification, the end result could be a tendency by licensees to over-classify events. This has very negative implications from a standpoint of impacts on the public and on public perceptions regarding risks associated with the nuclear industry. For these reasons, NRC should restrict the supplement to failures to report rather than failures to properly classify events.

Comments on Additional Questions:

1) Under what circumstances, if any, should the NRC impose sanctions directly on individuals responsible for violations?

Individual sanctions should be considered only for instances of willful or grossly negligent violations and only where the utility is shown to be totally exonerated. In any case where the utility's actions or policies, stated or implied, contributed to the individual's actions, the utility should be held accountable. NRC appears to recognize the very negative impacts on morale and on personnel retention which would result from sanctions against either licensed or unlicensed operators or other personnel.

2) What has been the effect of regionalization on the enforcement program and its implementation?

It is possible that the large increase in numbers of small civil penalties is partly a result of regionalization. However, with regionalization has come improved understanding of the circumstances surrounding incidents.

Overall, it is not clear that there is any effect which can be attributed to regionalization.

Attachment to PLA-2413

3) Does the present system identi f y root causes of violations so that effective corrective actions can be taken? Are lessons learned effectively promulgated to the industry and, if so, by what means.

The success of the present system in identifying root causes for violations should be measurable by the frequency of repeat violations.

From PP&L's perspective, the root causes appear to be adequately identified since repeat violations are rare. However, level IV and V violations have become very numerous and do not receive the level of review and investigation which is afforded to level III violations.

The concept of lessons learned is applied almost exclusively to Level I I I violations and higher. The thousands of Level IV and V violations each year simply do not receive attention except by the licensee cited. In the case of Level III violations and higher, information is disseminated by a variety of mechanisms depending on the nature and severity of the event.

Some mechanisms used: IE Bulletins and Information Notices, NUREG-0940, and industry information services such as "Atomic Energy Clearinghouse" and "Inside NRC". Others receive attention in the legal community due to the implications which they may have regarding how the enforcement policy is applied.

4) Should the NRC consider increasing its reliance for compliance on licensee self-identification or evaluations of third parties?

PP&L believes that the majority of violations are either self-identified or self-disclosing. This has certainly been the case for all three of PP&L's Level III violations to date. Therefore, NRC is already heavily relying on licensees to identify their own violations.

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Florida Power CORP O RA TION February 28, 1985 3F0285-26 Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 Attention: Docketing and Service Branch

Subject:

Comments to Federal Register/Vol. 50, No. 6/Wednesday, January 9, 1985/Notices "Ad Hoc Advisory Committee for Review of Enforcement Policy; Request for Written Comments"

Dear Sir:

In accordance with the requirements of the above referenced subject, Florida Power Corporation wishes to submit the written comments which are provided in the attachment to this letter.

Sincerely,

/r;t.

G. R. Westafer Manager, Nuclear Operations Licensing and Fuel Management EMG/feb Attachment

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GENERAL OFFICE 3201 Thirty-fourth Street South* P.O. Box 14042, St. Petersburg, Florida 33733

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COMMENTS TO FEDERAL REGISTER/VOL. 50, NO. 6/WED. JAN. 9, 1985 NOTICES 47 FR 9987 (MAR. 9, 1982)

AD HOC ADVISORY COMMITTEE FOR REVIEW OF ENFORCEMENT POLICY; REQUEST FOR WRITTEN COMMENTS The Committee now invites comments from the public on the effect, if any, that the enforcement policy has had, on:

1. The prompt detection and correction of violations by licensees.

The increased fines, civil penalties, and issuance of orders has a minimal impact on Florida Power Corporation as a result of the enforcement policy changes because our procedures, training, and management emphasis on safe, legal, and efficient operation of CR-3 has resulted in prompt detection, reporting, and correction of violations. In addition, our company has an active Quality Programs Department to assist in monitoring these activities.

2. The prompt reporting of violations by licensees.

Same as 1.

3. The prevention of violations by licensees.

The emphasis of the prevention of violations is based primarily on corporate directives and goals rather than the fear of fines or civil penalties. We, as a company, wish to adhere to the law, and we do not want to incur fines. The issuance of the violation and subsequent negative press resulting from a violation cause more embarrassment to the corporation and, therefore, act more as a deterrent than a fine.

4. The safety record of licensees.

Florida Power Corporation's strong management directive of safe, legal, and efficient operation dictate strict adherence to safe practices. In addition, the concern for the survival of the nuclear industry provides a strong incentive for all employees to be extremely safety conscious.

5. The morale of licensees and their employees.

The morale of the Florida Power nuclear personnel is high. We have a good opera ting record and all employees work very hard to keep the plant running smoothly in all respects including adherence to the law. Increasing fines, and in a sense adding additional pressures to those already existing pressures, tend to be a negative factor to morale.

6. The public's confidence in the Commission's enforcement program.

The fact that a violation was reported against a nuclear plant causes the public to loose confidence. The amount of the fine or civil penalties is not the major public confidence indicator.

7. The willingness of workers and members of the public to report alleged violations.

Florida Power Corporation nuclear plant employees are encouraged to report violations to their supervisors and other personnel as appropriate.

The public is willing to report alleged violations, however, the public is not in a position to observe violations since the sources of violations are largely within the plant and out of the public domain.

To the extent that the enforcement policy has had an appreciable effect, positive or negative, to what particular feature of the policy, if any, is that effect attributable? In this connection, the Committee particularly invites comments relating to the following features of the enforcement policy:

1. Are the tables of civil penalty levels set at appropriate amounts?

Your emphasis here is the amount of the fine. While utilities do not wish to incur fines of any kind regardless of amount, the real deterrent is the bad publicity for receiving the violation citation.

2. Upward and downward adjustment of base civil penalties.

The severity coupled with the intent to commit a violation should dictate the level and adjustment of the civil penalty. If the severity and intent is high enough, then a show cause order is the most effective penalty.

Replacement electrical generation costs for inoperative nuclear plants far exceed the magnitude of the fines and provide the greatest deterrents.

3. Classification of violations by Severity Level.

The severity level classifications need to provide the spectrum of violations encountered. Sufficient levels need to be clearly defined to equitably provide fair evaluations from severe, fragulant violations to low consequence interpretation type violations. The penalties imposed need to be fair and equitable. Therefore, sufficient levels of violation, supplemented by mitigating or aggrevating circumstances, should be defined.

4. Policy on material false statements.

Material false statements show a lack of professionalism and affect the integrity of the nuclear industry. The severity level of a violation of this type should contain a more severe penalty. Intentional material false statements should result in an event higher penalty. These penalties do not need to be monetary in nature.

5. Relative emphasis on negative and positive incentives.

Negative incentives toward more stringent civil penalties provide a small affect on the results of violations. Because the goals of all utilities are to incur as few violations as possible, positive incentives do not alone provide fewer violations.

6. Progressive escalation of enforcement sanctions.

Progressive escalation of enforcement sanctions does provide an incentive to correct deficiencies in a timely basis and take steps to ensure future compliance.

7. Enforcement procedures such as enforcement conference, publicity policy, etc.

Enforcement procedures should be unnecessary if the laws are written in a clear, concise manner. Enforcement conferences and publicity policy tend to offer negative results.

8. Supplement 8 of the revised enforcement policy (Severity Categories).

The 5 severity levels are defined in this supplement and appear to be clear and understandable.

• In addition, comments are requested on the following questions:

1. Under what circumstances, if any, should the NRC impose sanctions directly on individuals responsible for violations?

Material false statements which are made deliberately could be considered as a circumstance for direct action on an individual. The knowledge by individuals that direct sanctions can be imposed by the NRC will result in personnel "clamming up" and becoming less willing to freely discuss the issues. Therefore, less information would be available.

2. What has been the effect of regionalization on the enforcement program and its implementation?

Regionalization creates inconsistencies among implementation and interpretation of regulations *

3. Does the present system identify root causes of violations so that effective corrective actions can be taken? Are lessons learned effectively promulgated to the industry and, if so, by what means?

Violations are stated in specific terms and clear as to the meaning of the violation. Root causes then need to be sought out from the violation. These are not always evident from the violation alone. Violations are adequately promulgated to the industry through documents such as Commerce Clearing House and other industry publications. The corrective actions, however, are not always included in these documents.

4. Should the NRC consider increasing its reliance for compliance or licensee self-identification on evaluations of third parties?

No, because third parties don't always have all of the facts involved in a particular incident and confusion, as well as inaccuracies, can further complicate a particular situation.

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• ss .~Aq -4 A11 :20 Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 Attn: Docketing and Service Branch

Subject:

"AD HOC ADVISORY COMMITTEE FOR REVIEW OF ENFORCEMENT POLICY; REQUEST FOR WRITTEN COMMENT" - FEDERAL REGISTER, VOLUME 50, NO. 6, JANUARY 9, 1985 General Electric Company's Nuclear Fuel Manufacturing Department (NFMD) in Wilmington, North Carolina hereby submits the following comments with regard to the referenced subject.

General Electric concurs with the NRC's stated philosophy of protecting public and employee health and safety by ensuring compliance with NRC regulations and license conditions. We believe this objective can be accomplished through an inspection program that identifies areas of noncompliance by degree of severity and obtains acceptable commitments for corrective action within a specified time frame. However, "prompt" corrective action is not always required in order to achieve the stated goals. Each situation should be evaluated on an individual basis. Prompt response and corrective action to a safety-related item should continue to be required but non-safety items may not necessarily warrant the same level of urgency. Other insignificant findings are generated from inspections which are the result of political pressure. These outside influences appear to produce increased inspection frequencies using a microscopic approach which creates a pressure situation for the inspector and has the potential to cause artifi.cial results.

IIAR 51985

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U.S. NUCLEAR REGULATORY COMMISSIOB DOCJ<ETING & SER-VICE SECT ION OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics Postmark Date Z. 7 f' ~

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GENERAL. ELECTRIC Secretary of the Commission Page 2 February 26, 1985 The existing policy of encouraging licensees to report violations, without fear of penalty as inspector-identified items, should be emphasized. This is the type of positive policy that encourages active compliance and promotes good communication practices.

A more defined degree of specificity needs to be established for violations within various areas of regulatory requirements. Present findings of similar importance appear to carry different severity levels.

It is apparent to those in industry that violations with the same severity level for the activity area of Reactor Operations would not be as serious for a Fuel Cycle and Materials Operation; however, the general public has no obvious way to make this distinction.

It is not believed that the identified enforcement policy specifically prevents violations or improves safety records.

Internal audits and effective company communications maintain a level of awareness and control of activities affected by regulations. As deficiencies are identified, they are corrected or scheduled for correction.

Due to the nature of inspections, it is difficult to generate a cheerful reaction. At best, an inspection that results with no findings is an indication to those involved, that programs are acceptable at that point in time. Negative reactions are experienced when violations are identified which are essentially a single error within a multitude of data or items which have insignificant program impact. The time involved in formally responding to these types of findings is hardly justified. A provision should be made to note data error within an overall program which does not affect the final results, rather than issue a violation. Licensees will gladly correct these minor inconsistencies which, in turn, tend to fine tune the program.

Also, violations should be limited to those identified by the inspector during closeout meetings. Unpresented violations do not give the licensee ample opportunity to provide the inspector with relevant data which may satisfy the concern.

The time restraints placed on licensees should be shared by the regulatory agencies. A specified time response should be published which requires the inspection report and the resulting licensee response acknowledgment to be issued within a specified time frame.

GENERAL fj ELECTRIC Secretary of the Commission Page 3 February 26, 1985 Currently, licensees are required to provide a formated response to inspection reports within thirty days of the date of the report. At best, this correspondence takes two to three days to reach the licensee. In some recent cases, it has taken eleven days to be delivered, leaving only nineteen days to formulate a response. If thirty days is the allocated response time, then licensees should have thirty days from date of receipt to respond. Certified mailing may be a way to accomplish this.

With regard to the question of effectiveness that the enforcement policy has had, it appears that the NRC should issue an appraisal of the penalty and level of severity based on actual performance. The appraisal should evaluate the level of compliance before and after the policy and determine the continuance of the policy based on the findings. The conclusion should also consider what is necessary in order to satisfy the policy's goals.

Sanctions should be imposed on any individual who is maliciously or criminally responsible for violations. Intentional acts of these descriptions, at any employment level or from any member of the public, should be subject to individual punishment. Undeliberate violations generated through neglect, ignorance, mistakes, stupidity or other unintentional actions should not create a situation where an individual is imprisoned or subject to monetary fine. The existing policy appears to reflect this approach.

- Regionalization has created problems. An example of this is the timeliness of the NRC review cycle for licensee changes to the Fundamental Nuclear Material Control Plan. Submittals affecting one topic of activity may involve changes requiring NRC approval prior to implementation while other changes require only notification to the NRC within six months of the change. Submittals involving prior approval are sent to the Office of Nuclear Material Safety and Safeguards in Washington, D.C. while notification items are sent to the Regional Office. As a result, the difference in response time from these two locations creates a situation where one of the notification items sent to the Region is identified by the NRC reviewer as needing prior approval and the one that went to Washington was already

GENERAL fj ELECTRIC Secretary of the Commission Page 4 February 26, 1985 approved. The submitted page indexes are wrong for both submittals and a confusing situation is created that is further complicated by additional similar submittals.

The present enforcement policy does not appear to be designed to emphasize "root causes of violations". Licensees would welcome findings that identify gross system problems. Most violations currently identified are isolated incidents within a working system.

While these findings are valid in relation to a specific regulation, they do not contribute to the overall program. In fact, the identification of these items may give the appearance to an uninformed outsider that the system is ineffective. Emphasis should be placed on the overall program. It would be very constructive to specifically identify those non-program related findings so that the general public is provided with a clearer understanding of the true severity and the perspective to which the NRC views the issue.

Industry could greatly benefit from a report that summarizes all violations as they relate to specific topics. Common areas of concern could be indicative of a generic problem requiring immediate attention. Also, resolutions at one facility may be successfully applied at different locations to correct similar problems.

Currently, there does not appear to be an effective method of communicating this type of evaluation.

In summary, the NRC policy of protecting the health and safety, common defense, security, and environment of the public and employees is one to which all responsible individuals and licensees subscribe. (1) A method of communicating the degree of seriousness of each inspection finding is required and the severity level method accomplishes part of this goal. (2) Non-hazardous findings need to be more clearly identified in NRC reports when released to the general public. ( 3) Not al 1 violations re qui re "prompt" corrective action in order to achieve the stated goals. (4) Self-identified violations should not receive a retaliation type of response from regulators when no health or safety situation exists. (5)

Inspectors should be more sensitive to isolated findings which are clearly not indicative of a system's failure. They should concentrate on root causes to system problems. (6) Time limitations should be shared by the NRC as well as imposed on the licensee.

(7) Individuals should receive civil penalties only when their actions have been proved to intentionally violate regulations.

(8) And finally, a published agency program that categorizes and

GENERAL fj ELECTRIC Secretary of the Commission Page 5 February 26, 1985 evaluates all inspection findings for the purpose of determining if any industry-wide problem exists, could prove extremely beneficial in meeting the Commission's stated goals as well as providing industry with useful information.

Sincerely, GENERAL ELECTRIC COMPANY

• /sbm C. M. Vaughan, Manager Regulatory Compliance

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February 27, 1985 LIC-85-090 Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 Attention: Docketing and Service Branch

Dear Mr. Ch i1 k:

Docket No. 50-285 Comments on Enforcement Policy In response to a request for public comment on NRC Enforcement Policy, the Omaha Public Power District, owner and operator of Fort Calhoun Station, Unit No. 1, submits comments for the consideration of the NRC's Ad Hoc Advisory Committee for Review of Enforcement Policy. Certain of these comments have already been provided in response to a March 8, 1984 Federal Register Notice. (Letter OPPD, (W.C. Jones) to NRC (Mr. Samuel J. Chilk) dated May 31, 1984 (LIC-84-154)).

Sincerely, R. L. Andrews Division Manager Nuclear Production RLA/DJM:gl p pc: LeBoeuf, Lamb, Leiby &MacRae 1333 New Hampshire Avenue, N.W.

Washington, DC 20555 Mr. E.G. Tourigny, NRC Project Manager Mr. L.A. Yandell, NRC Senior Resident Inspector Acknowledi 4 S S 124 Empl oyment with Equal Opportunity Mal e Femal e

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Comments Concerning the Present NRC Enforcement Policy I. Comments were requested on the effect that the NRC enforcement policy has had on the prompt detection, correction, reporting, and prevention of violations by licensees. Additionally, comments on how the enforce-ment policy has affected the safety record and the morale of licensees and their employees was requested. A view on the public's confidence in the Commission's enforcement program and the willingness of workers and members of the public to report alleged violations was also requested.

Comments:

The Omaha Public Power District (OPPD) does not believe that the changes in enforcement policy have led to any significant changes in the detection, correction, reporting, and prevention of violations.

OPPD has always made the safe operation of its nuclear facility a high priority. It is a recognized fact that the safe operation of a nuclear facility is more cost effective than unsafe operation whether a severe enforcement policy exists or not. It is counter-productive to operate in a condition which could lead to an accident. The enforcement policy has had a negative impact on the morale of the utility industry and its employees. Most apparent is the instance where the operators of a facility identify, correct and report a violation only to be cited after the fact when an NRC inspector "discovers the problem had existed.

The beneficial exchange of information occurs far less often due to Commission emphasis on material false statements. The policy is leading more to an environment of "policeman," and less to an arena for mutual resolution of real problem issues.

9 II. Comments relating to the following items were requested:

1. Are the civil penalty tables set at appropriate amounts?

2. Upward and downward adjustments of base civil penalties;

3. Classification of violations by severity level;

4. Policy on material false statements;

5. Relative emphasis on negative and positive incentives;

6. Progressive escalation of enforcement sanctions; and

7. Enforcement procedures such as enforcement conferences and publicity policy.

Comments:

Concerning the amounts set forth in the civil penalty tables, some consideration should be given to the variance in size between utilities. For a large utility, it may well be more cost effective (in terms of potential down-time, replacement power, etc.) for a plant to violate its license or Technical Specifications than to shut down.

Size should be taken into consideration utilizing adjustments based upon the degree of "intent" involved in the violation. It would seem appropriate to apply the enforcement policy in a manner which deters intentional non-compliance with severe sanctions; punishing inadvertent and unintentional violations in a manner consistent with severity.

Further, the degree of severity should be judged based upon the concept of contribution to the risk of accidents. It should be noted again that the utility industry, from a purely financial point of view, will tend to operate in as safe a manner as possible, notwithstanding any enforcement policy .

• As we have previously stated, the progressive escalation of enforcement sanctions is a practice which could potentially be abused. Consider the following example. In the course of an inspection, it is deter-mined that a licensee should be cited for three separate instances of "Failure to Follow Procedures." Because each violation is denoted by the same generic title, the decision could be made to aggregate the three violations and raise the Severity Level accordingly. However, titles aside, these violations may be totally unrelated. One may have resulted from a misinterpretation of the intent of a procedure, the second perhaps indicating the need for a procedural review and the last possibly due to a lack of training. Considered separately, none of these situations is indicative of a severe underlying problem or a programmatic deficiency. Further, each may be easily resolved.

However, aggregating the violations under one generic title gives the appearance of serious problems, far in excess of any real severity.

After all, what violation couldn't be attributed to failure to follow procedures with the degree and extent to which nuclear industry activi-ties are proceduralized.

The District also believes that the Commission's emphasis on material false statements leads to a stilted and unproductive regulatory environ-ment. Additionally, the review time by the NRC is lengthened. Ques-tions must be asked by NRC reviewers, answers must be prepared, and a long and careful review not just for technical adequacy (which is proper) but for "word engineering" must be conducted before licensees are willing to supply the information.

As we have previously commented, if the term "material false statement" is to be retained, "materiality" should be contingent upon the safety significance of the underlying information. Further, this "material-ity" should be gauged based upon actually influencing an agency re-viewer as opposed to having the capability for influencing a reviewer.

"Capability" is a subjective term and the capability to be influenced is highly dependent upon the personality of the reviewer; it is believed that basing "materiality" on actually influencing a reviewer is a far more objective and enforceable definition. Also of importance is a consideration of the degree to which the reviewer's conclusion was based on false information.

II I. General

1. Under what circumstances, if any, should the NRC impose sanctions on individuals responsible for violations?

Response

Generally speaking, an individual responsible for a violation should not be subject to NRC sanctions under any condition. The licensee is responsible for the conduct of its employees and thus the licensee should be held accountable. However, this does not preclude the imposition of sanctions against an individual intte event that an individual by action or inaction, willfully violates regulations for the purpose of personal gain or for the purpose of intentional damage to another individual or the facility.

2. What have been the effects of regionalization on the enforcement program and its implementation?

Response

Because of regionalization, the enforcement policy has also become "regionalized". The enforcement interpretations are now more of a regional nature providing no assurance that the inspectors of a parti-cular region are applying the regulations in a manner consistent with those of another region. There is currently a lack of any mechanism to assure that regulatory requirements are being uniformly applied nation-wide.

3. Does the present system identify root causes of violations so that effective corrective actions can be taken? Are lessons learned effectively promulgated to the industry and, if so, by what means?

Response

In most cases, identification of root-cause is left to the licensee, and effective corrective actions are not suggested. Lessons learned from areas such as equipment problems are effectively dispersed to the industry by the Information Notice process. However, identification of root-causes and appropriate solutions are not often part of the Infor-mation Notice process. Industry interaction in other ways (such as pertinent news releases, shared information between utilities) do provide identification of potential problems and possible corrective actions. The NRC could gain much by exposure to and acceptance of INPO programs in this area in lieu of a proliferation of redundant and not as useful NRC paperwork.

4. Should the NRC consider increasing its reliance for compliance on licensee self-identification or evaluation of third parties?

Response

In order for this to become a viable option, the enforcement policy needs to give a licensee credit for finding and correcting its own problems without fear of enforcement action. If the system is such that when a licensee identifies, corrects and reports a violation only to be cited two months later with a civil penalty, this option will never be a viable one. Certainly the approach of allowing the industry 11 credit 11 for being able to monitor itself would be a major step toward promoting a sense of regulatory 11 good-wi 11, 11 and, if properly done, would make great strides toward providing the public with a greater sense of acceptance of the nuclear industry .

consumers DOCKET~'

USNR Power company *as MAR -4 Al 1:Q5 General Offices: 1945 West Parnall Road, Jackson, Ml 49201 * '( 517) 781!*055 _ . O _, r t, C~ r ;,t1.,,, ,-11, GOC1/4{E iiNG & SERVlC!

BRA CH February 27, 1985 Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C . 20555

• Attn: Docketing and Service Branch Consumers Power Company appreciates the opportunity to once again comment on the NRC's Enforcement Policy. These comments are being provided in response to the request for written comments by the Ad Hoc Advisory Committee for Review of Enforcement Policy (50FR1142, January, 9, 1985). Comments were previously provided in a letter from DJVandeWalle to the Secretary of the Commission dated June 13, 1984.

In general, it is Consumer Power Company's opinion that the NRC's Enforcement Policy has not been fully effective in meeting its stated purpose. While it appears that it has resulted in improved licensee attentiveness to ensuring compliance, prompt identification and reporting of noncompliances, and timely corrective action; it has been less effective than it could be, and possibly even counter-productive at times, to achieving improved, licensee performance (i.e., safe, efficient and reliable plant operations). In our opinion, this lack of effectiveness is due to the extremely prescriptive and detailed nature of the policy and the inflexible NRC Staff positions that often times result; the application of the policy by relatively low level personnel within the agency which leads to significant diversity of enforcement actions, and often times, an over-emphasis of minor violations; the inequity of severity categories between enforcement areas which leads to over-emphasis of one area at the possible expense of other areas; and the use of minor civil penalties for relatively minor violations which serves to exacerbate the other problems noted.

It is our belief that these problems could be resolved by limiting the policy to only those matters which the NRC considers to involve a substantial safety hazard; administration of the policy at the upper levels of NRC management; reviewing the examples of violations in each area and severity category to assure comparable enforcement actions for violations of comparable safety significance; and use of civil penalties for only the most safety significant deviations.

Regarding the use of civil penalties, we believe that the NRC has much more effective means of achieving improved performance. The Commission can, for example, use its authority to issue show cause orders to get licensee MAR 15 OC0285-0005A-NL03

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2 attention to a matter of significant safety concern. The potential ramifications of this action are more than adequate to assure that licensee attention will be focused on the problem. Consequently, we would recommend that the use of civil penalties be eliminated except for exceptional cases and then only after explicit review and approval by the NRC Commissioners themselves.

Our responses to the specific requests and questions in the notice are provided below:

1. Regarding the effect the policy has had on prompt detection and correction of violations, prompt reporting of violations and prevention of violations, it appears to have heightened licensee attentiveness to these matters. However, licensee performance in these areas has been and should continue to be based on considerations of plant safety and the consequent requirement to operate in compliance with the license, and not on the fear of potential punitive actions that could be taken by the NRC.

2. As to the effect the policy has had on the safety record of licensees, we believe that the policy has been less than fully effective as discussed above.

3. We have not observed any significant effect of the policy on the morale of our employees.

4. The public's confidence in tqe NRC's enforcement program is, in our opinion, based entirely on the public's confidence in the licensee to operate the plant safely. Therefore, a general public education of nuclear power would go much further in enhancing public confidence than any further stiffening of the enforcement program.

5. We have not observed any unwillingness on the part of our employees to report alleged violations. Employee response in this regard seems to be more effected by management's attitude and handling of alleged violations than by the NRC's enforcement program.

• 6. Regarding the specific features of the policy, we believe that the policy should be amended to address only those matters which the Commission considers to involve a substantial safety hazard, administered by the upper levels of NRC management, and structured to assure that comparable enforcement actions are taken for noncompliances of comparable safety significance.

7. The NRC should not, under any circumstances, impose sanctions directly on individuals. Rarely, if ever, is a violation entirely due to a single individual. Therefore, determining the specific individual(s) responsible for a violation would be difficult at best and arbitrary at worst.

8. Regionalization has tended to increase the effectiveness of the enforcement program because the regional inspectors are significantly more familiar with nuclear power plant operation. On the other hand, delegation of authority under the enforcement program to lower levels of inspection personnel has led to significant differences in enforcement action for similar violations, and, at times, undue emphasis on problems of relatively minor significance.

9. The present system, although redundant to our internal corrective action and audit system, does yield effective corrective actions for violations. Lessons learned are effectively promulgated to the industry.

Means for dissemination of lessons learned include NRC information notices OCO285-OOO5A-NLO3

3 and INPO significant event reports.

It is our belief that the NRC's enforcement program would be even more effective were it to concentrate more on identification of root causes and corrective actions and less on punitive enforcement actions including severity level classifications and civil penalties. Our internal corrective action and audit system has this focus and as a result has become a very positive contributor to improved plant operations.

10. Regarding whether the NRC should consider increasing reliance for compliance on license self-identification or evaluations of third parties, we believe that greater reliance on licensee self-identification is appropriate. The NRC's responsibility is to ensure compliance with rules and licenses. The licensee's responsibility is to operate the plant so as to achieve the highest plant reliability within the confines of the regulations and license conditions. Consequently, it is in the licensee's own best interest to ensure compliance with rules and license requirements and greater reliance on the licensee's self-identification program for assuring compliance would seem appropriate. This must be balanced, of course, against the potential negative impact that using the licensee's program for determining enforcement actions may have on the program itself. We are concerned that such use in establishing Systematic Assessment of Licensee Performance (SALP) ratings, for example, may have a chilling affect on the self-identification program.

Third parties (e.g., INPO), on the other hand, have a responsibility to help licensees improve plant performance and safety, but should not be involved in assuring compliance with NRC rules and licenses. This should not preclude industry-initiated programs of self-regulation in areas in which the industry is more knowledgeable or capable of regulating than the NRC

• Director, Nuclear Licensing DJV 26-85 OC0285-0005A-NL03

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Gentlemen, I am very much concerned becaus e of the report t h t you eefuse to shout down unit l 0

of the San Onofre power unit.

I buil ~ this home about 40 years ago, at great l a bor and expense. Ho ping t hat I would have a safe home in my old age.

The Edison Electric Co, desided otherwise. whithout consulting me nor anyone else of concerned people, it built a could be deathtrap a few miles from my home. t hat if a major earthquacke should come would not only ma ke mine and th 0usa nds of homes unfit tG live in, as we l l as put our lifes in great danger.

Should t hat be permi t ted to contnue without us concerned people have any say in the matter?

P1ease -reconsider and shut the reactor down whi l e pro per investi ga t i on is made as to th e safety of t hat plant.

Respectfu l l y J.B.Abrahamsen.

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So . Laguna , CA 92677 February 23 , 1985 15 HAR -1 A11 :01 Ad Hoc Committee for Review of Enforc ement Policy Docketing and Service Branch Nuclear Regulatory Com.mission Washington , D. C. 20555

Dear Comm i ttee Members:

As a resident of the so - called "Public ~ducation Zone" for the San Onofre Nuclear Generating St~tion , I would like to state my strong objection to the November 1984 restart of

• SONGS #1 despite its non - compliance with Nuclear Regulatory Commission seismic safety st 8 ndards .

SONGS sits atop one earthquake fault and within 21/2 miles of another .

By refusing to respond to calls for public hearings on the issue , the Nuclear hegulatory Commission implies that seismi c risk is not an important fac t or in the licensing process and thereby dodges its own prerequisite of public input .

A tax supported regulatory agency does the tax payers an appalling disservice when it does not compel operator com-pliance with its regulations and fails to adhere to them itself !

l'he Nuclear Regulatory Commission has shown a clear bias in favor of the financial health of the utility and a ca l lous disre6ard for the safety of th~ public .

In the case of SONGS the q uestion of regulatory violation is moot . What we have here is a governmental agaacy that adapts and contorts its rules~ conform to the limits to which the utility is wmlli ng to go;protect public safet The industry controls and regulates itself and the public ag y shieI s' it '(*

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ARKANSAS POWER & LIGHT COMPANY POST OFFICE BOX 551 LITTLE ROCK, ARKANSAS 72203 (501) 371-40'.XJ 1 ,R -1 P2 :50 February 28, 1985 0CAN028512 Mr. Samuel J. Chilk, Secretary U.S. Nuclear Regulatory Commission Washington, 0. C. 20555

SUBJECT:

Arkansas Nucl ear One - Units 1 & 2 Docket Nos. 50-313 and 50-368 License Nos. DPR-51 and NPF-6 Comments on Enforcement Policy (50 Fed. Reg. 1142 (1985))

Dear Mr. Chilk:

The following comments are submitted by Arkansas Power & Light in response to the request by the Ad Hoc Advisory Committee for Review of Enforcement Policy. The Committee on January 9, 1985 requested interested persons to submit their views on NRC enforcement practice and procedures (50 Fed.

Reg. 1142 (1985)). We would like to commend the Committee for the depth with which it has undertaken its examination and look forward to reading its recommendations.

IMPACT OF ENFORCEMENT POLICY Prompt Detection and Correction of Violations by Licensees While the Enforcement Policy clearly plays a role in motivating licensees to detect and correct promptly all violations of NRC requirements, the Policy is one of many incentives for doing so. Clearly, the most powerful incentive we have to detect and correct promptly all violations of NRC requirements is our responsibility not to jeopardize the public health and safety in any way. We view this responsibility as compelling us not simply to satisfy all NRC requirements, but to constantly strive for the best possible level of performance.

In addition, our power reactors represent multibillion dollar assets. As a result, we have the greatest possible economic incentive to operate those facilities safely and to avoid risking in any way their long-term operability.

ME M BER M IDDLE SO UTH UTILI T IES S Y STEM

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Mr. Samuel J. Chilk February 28, 1985 Given these incentives, the impact of the Enforcement Policy on our efforts to promptly detect and correct violations of NRC requirements must be placed in context. While the Enforcement Policy does play a role in motivating us to detect and correct promptly all violations of NRC requirements, there are other more powerful incentives for us to do so.

Prompt Reporting of Violations by Licensees The current Enforcement Policy provides for the mitigation of civil penalties by up to 50% of the base civil penalty for a given violation if a licensee promptly identifies and reports such violations (10 C.F.R. Part 2, Appendix Cat V.B.1). We believe that this is a desirable aspect of the Enforcement Policy and provides an incentive for licensees to report violations of NRC requirements. Whenever a licensee promptly reports a violation of NRC requirements, we believe that mitigation of a proposed penalty is warranted.

The Prevention of Violations See our response to the question of whether the Enforcement Policy has an impact on motivating licensees to detect and correct promptly violations of NRC requirements.

Safety Record of Licensees The NRC currently performs a number of evaluations of licensee conduct.

Broader evaluations, such as the Systematic Assessment of Licensee Performance (SALP) Program, may have an overall greater impact on licensees in terms of encouraging them to improve their safety record than the Enforcement Policy. Nevertheless, a good past enforcement record is always desirable because it is one data point used by NRC and other in evaluating the safety record of a licensee. Therefore, we believe that it is a positive incentive .

Morale of Licensees and Their Employees In our opinion, when civil penalties are imposed on an untimely basis they may discourage licensees and their employees . This is particularly the case when a licensee has implemented corrective actions and after having done so the NRC Staff proposes a civil penalty. Such penalty has the effect of reopening the entire matter and suggesting that corrective actions may not be adequate, even though as a practical matter the involved licensee has moved well into implementing such corrective actions, often with the tacit approval of NRC.

In addition, the current practice of NRC issuing press releases when it proposes civil penalties has an adverse impact on morale. Such releases often do not reflect corrective actions licensees have implemented. We believe that before NRC levies a penalty, it should consider fully whether the penalty is necessary and whether it should be mitigated. This is because once the penalty is announced, the damage has been done in terms of public perception of the affected utility and nuclear power in general.

Mr. Samuel J. Chilk February 28, 1985 Public Confidence in NRC Enforcement We believe that unless the Commission uses its enforcement authority carefully, it could inadvertently undermine the confidence of the public in its enforcement program. This is particularly the case with civil penalties, which often generate considerable publicity. If the Commission is perceived as constantly having to issue civil penalties in order to assure compliance with its requirements, the public perception may be inadvertently created that either power reactor licensees are unwilling or unable to satisfy all NRC requirements (which clearly is not the case) or that civil penalties are simply an ineffective enforcement mechanism (which we do not believe is the case). Several recent changes in the Enforcement Policy designed to avoid the imposition of smaller civil penalties for violations of technical specifications suggest to us that the Staff is aware of this problem.

Willingness of Workers and Public to Report Alleged Violations

• We do not believe that the Enforcement Policy bears on the willingness of workers to report alleged violations. AP&L as a matter of corporate policy encourages its employees to advise management of any safety concerns they may have. We also inform our employees that if they chose to, they may bring their concerns directly and initially to the attention of NRC. We believe that our programs to encourage licensees to express their safety concerns are effective and we have confidence that employees feel free to do so.

SPECIFIC FEATURES OF THE ENFORCEMENT POLICY Tables of Civil Penalties Generally, we believe that the amounts set forth in the table of base civil penalties are appropriate.

Upward and Downward Adjustment of Base Civil Penalties We believe that for the most part the feature of the Enforcement Policy providing for the upward and downward adjustment of base civil penalties is appropriate. However, in our opinion the Enforcement Policy should provide specifically for the 100% mitigation of proposed civil penalties when a licensee initiates extraordinarily prompt and corrective actions. As we discussed earlier in connection with the impact of civil penalties on the morale of licensees and their employees, the purposes of the Enforcement Policy are not serviced when a civil penalty, even if mitigated by 50% as is now permitted by the Enforcement Policy, is proposed in the face of extensive corrective actions implemented by a licensee following a violation.

Mr. Samuel J. Chilk February 28, 1985 Classification of Violations by Severity Level Under the existing Enforcement Policy, alleged violations are categorized by Severity Level. This is done in large measure to reflect the safety significance of such violations. We agree with this approach and believe that it should be carried through to its logical conclusion. Specifically, we believe that all violations in a given severity level (regardless of the specific area of activity regulated by NRC) should be of comparable safety significance. For example, all Severity Level I violations, whether in reactor construction or reactor operation, should be of the same safety significance. If there are no violations in reactor construction that are comparable in safety significance to violations involving reactor operation, which we believe to be the case, then there should be no Severity Level I violations in reactor construction. This approach is more desirable than the existing approach because it more accurately would convey to the public the true safety significance of given violations in terms of overall NRC regulation, rather than viewing those violations in terms of specific and somewhat narrowly focused activities regulated by NRC and set forth in the supplements to the Enforcement Policy, as is now the case .

Policy on Material False Statements We believe that the current Commission policy on material false statements is unlawful. In our opinion, under the Atomic Energy Act, a material false statement must be submitted in writing and under oath. At the present time oral representations, no matter how informal, may constitute material false statements. We do not believe that the Atomic Energy Act contemplates such a result.

Beyond this, the current policy is of questionable regulatory value.

Employees working in the nuclear area cannot help but fear that one day they will be accused of submitting a material false statement. Such an accusation may have devastating personal and professional impacts. Because of this fear and the undefined nature of what constitutes a material false statement, it may well become increasingly difficult to attract and retain the best personnel, in part as a result of this policy.

Relative Impact of Negative and Positive Incentives We believe that the Enforcement Policy should provide explicitly that no enforcement action may be taken when a licensee finds, corrects and reports the violation and has a good enforcement history. This concept is now reflected in the Enforcement Policy in connection with Severity Level IV and V violations. We believe that extending this provision to all violations of NRC requirements may well be a powerful incentive for licensees and as such could materially aid in the achievement of the goals of the Enforcement Policy.

Progressive Escalation of Enforcement Actions We believe that overall the progressive escalation of enforcement actions as contemplated by the Enforcement Policy is generally acceptable, provided that the NRC has the factual premise for escalating such enforcement actions.

Mr. Samuel J. Chilk February 28, 1985 Enforcement Procedures We believe that there are a number of procedural aspects to the Enforcement Policy which could be improved. First, we believe that enforcement conferences are effective if used properly, i.e., for an exchange of ideas between the licensee and Staff regarding alleged violations of NRC requirements and corrective actions which will be implemented by the Licensee. However, at the present time, enforcement conferences are often not used to their fullest possible extent. We believe that such conferences should be expanded in scope so that licensees are able to discuss with the Staff, before it issues formal enforcement documents, the precise nature of the alleged violations, the potential enforcement action under consideration, and the specific corrective actions which the licensee is willing to implement.

We believe that using such a process has a number of advantages. First, it will decrease considerably the adversarial nature of enforcement conferences. At the present time, licensees are given the opportunity to explain their corrective actions. However, they are often not told of the specific violations with which the Staff is concerned, £.:JI.:.., the regulatory provisions allegedly violated. Nor are they often told what enforcement sanctions are under consideration. As a result, the licensee is often forced to respond to staff concerns which have yet to be articulated.

In addition, expanding the use of enforcement conferences would provide for a greater exchange of information. If a licensee is aware from the outset of Staff concerns, it will better be able to tailor its corrective actions so as to address them. They may well aid the overriding goal of the Enforcement Policy, viz., the correction of past violations and the avoidance of future violations.

The second major procedural change we believe is necessary concerns the issuance of press releases. As we discussed earlier, the issuance of such releases by NRC often results in a public misperception as to the level of performance of a specific licensee involved in an enforcement action. One way of remedying this problem is to implement the expanded use of enforcement conferences, as suggested earlier. If at the time an enforcement action is taken the NRC and licensee agree to the alleged violation, the enforcement sanction, and corrective actions, a press release issued in conjunction with the enforcement documents could reflect these three aspects of the matter. In our opinion, this would provide a fuller public record of the enforcement action.

Supplement VIII of the Enforcement Policy We believe that with respect to emergency planning, escalated enforcement action should not be taken when a licensee does not satisfy an emergency planning standard involving assessment of notification unless the licensee had prior notice of such deficiency. If the point of an emergency exercise is to identify deficiencies, such deficiencies should not give rise to escalated enforcement actions.

Mr. Samuel J. Chilk February 28, 1985 OTHER ISSUES Imposition of Sanctions on Individuals We believe that under Section 234 of the Atomic Energy Act, the only individuals who may be subject to sanctions are those who are issued licenses to perform a particular activity, i.e, reactor operators.

Therefore, we have serious questions as to the legality of any effort by the Commission to impose civil penalties on any individuals other than reactor operators.

More importantly, we do not believe that as a matter of policy any sanction should be imposed directly on individuals, with the possible exception of the suspension or revocation of any operator's license and then only after a pattern of repeated noncompliance is established for which corrective action has proven to be ineffective. We believe that power reactor licensees have the responsibility to develop necessary training programs so that individuals they employ are aware of their responsibilities under the Atomic Energy Act. The Commission has often recognized this when it has emphasized the nondelegability of a licensee's responsibilities for work completed by its contractors. Consistent with this, we believe that the Commission should place the responsibility for assuring individuals comply with all binding requirements on the licensee, rather than on the individuals themselves who may have deviated from an NRC requirement.

In addition, sanctions may be imposed directly on individuals who allegedly violate Section 206 of the Energy Reorganization Act and Part 21 of the Commission's regulations. These regulations require that certain types of defects in various reactor components be reported to NRC. For the reasons set forth above, we do not believe that sanctions against individuals as a policy matter further the goals of these provisions. Again, as in our case, power reactor licensees have established Part 21 reporting procedures. If an individual fails to satisfy those requirements, in most cases it will be a reflection of that procedure. Accordingly, enforcement action on an individual basis may be appropriate.

Lastly, we believe that if the NRC establishes a practice of bringing enforcement action against individuals, there will be an adverse impact on the ability of licensees to retain the most qualified individuals. In the long term, this could have adverse consequences on the ability of the Commission to satisfy its regulatory mission.

Regionalization We have one comment concerning the impact of regionalization on NRC enforcement. Records of Severity Level IV and V violations, which are now issued by the regions and subject to no central review, are not located in any one office within NRC which is accessible to us. This makes it virtually impossible to compare other Severity Level IV and V violations for consistency. It also makes it extremely difficult to assess whether a particular Severity Level III violation should have been categorized as a Severity Level IV violation.

Mr. Samuel J. Chilk February 28, 1985 Similarly, with the increased responsibilities assigned to the regions, we have at times found it increasingly difficult to get a clear explanation as to what does or does not constitute a violation of NRC requirements. As a result, licensees may have no real notice as to what will consitute a violation of those requirements until a determination is made at the regional level that the violation took place.

Root Causes of Violation Overall it has been our experience that the enforcement process generally identifies the root causes of particular violations. We believe that NRC issuances such as I&E Bulletin as well as INPO information wires generally are useful in distributing significant information discovered through the enforcement process.

Increased Reliance on Licensee Self-Identification or Evaluations by Third Parties

• We believe that NRC should place increased reliance on licensee self-identification. It should do so by providing for complete mitigation of civil penalties as we discussed earlier.

At the current time, evaluations, such as we do not believe that NRC should rely on third-party those performed by INPO. In our opinion, voluntary participation in the INPO program is a critical element of its effectiveness. This may be compromised should the NRC rely on evaluations it prepares.

We appreciate this opportunity to provide you with our comments on enforcement.

Sincerely,

{?;ed Enos Manager, Licensing JTE:LP:ds

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February 28, 1985 Mr. Samuel J. Chilk, Secretary U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Subj: Comments on NRC Enforcement Practice and Procedures Solicited by the Advisory Committee on Enforcement (50 Fed. Reg. 1142 (1985))

Dear Mr. Chil k :

On January 9, 1985 the Ad Hoc Advisory Committee for Review of Enforcement Policy ("the Committee") solicited written comments on NRC enforcement practices and procedures (50 Fed.

• Reg. 1142 (1985)). The following comments are submitted on behalf of the 18 power reactor licensees set forth below.l are based on our experience with NRC enforcement since 1980, when They we commented o n t h e original Enforcement Policy and provided t h e Commission with a complete draft of what we believed would be the 1 Alabama Power Company; Arkansas Power & Light Company; Baltimore Gas & Electric Company; Boston Edison Company; Commonwealth Edison Company; Consolidated Edison Company of New York, Inc.; Duke Power Company; Georgia Power Company; Long Island Lighting Company; Mississippi Power & Light Company; New York Power Authority; Niagara Mohawk Power Corporation; Northeast Utilities; Pacific Gas & Electric Company; South Carolina Electric & Gas Company; Tex as Utilities Generating Company; Washington Public Power Supply System; Wisconsin Public Service Corp.

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optimum NRC Enforcement Policy. We have since commented on each subsequent amendment to the Policy. In addition, we have interacted with the Staff on issues involving enforcement and have been monitoring every escalated enforcement action taken since the Enforcement Policy was first issued. We appreciate this opportunity to provide the Committee with our views and would welcome the opportunity to discuss them with the Committee during its April 10-11, 1985 meeting.

Our comments are structured as follows. First, we provide a brief discussion of some methodological considerations which we believe are critical to the Committee's inquiry. Second, we outline our views concerning the overall effectiveness of the Enforcement Policy in terms of each enforcement mechanism (e.g.,

enforcement conferences and civil penalties) set forth therein and the extent to which these mechanisms have satisfied the

- articulated goals of the Policy. Third, we suggest several proposed changes to the Enforcement Policy which if implemented would better satisfy those goals. Fourth, we respond directly to the questions raised by the Committee in the January 9, 1985 Federal Register notice to the extent that they are not addressed in the preceding three sections.

I. Methodological Considerations We wish to bring to the attention of the Committee two methodological considerations which, in our opinion, should have a bearing on its deliberations. First, there are several industries with very different characteristics within the jurisdiction of NRC. On the one hand NRC regulates a relatively small number of power reactor licensees which operate multi-

• billion dollar facilities generating hundreds of thousands of dollars of revenues for each day of operation. These licensees are for the most part subject to intense economic regulation by other state and federal agencies. On the other hand, there is a much larger number of non-power reactor licensees such as radiographers, hospitals and universities, some of whom generate relatively small amounts of revenue and many of whom are not subject to any form of economic regulation. Clearly the

- divergent nature of these entities counsels against the Committee making recommendations which fail to account for these differences.2 Second, at least in connection with power reactor licensees, we urge the Committee not to rely extensively on quantitative data to evaluate the effectiveness of the Enforcement Policy.

Because of the relatively few number of licensees and the lack of 2 Because of this we recognize that many of our comments and recommendations may not be applicable to non-power reactor licensees. In such cases we believe that the Enforcement Policy may need to be revised to .reflect more specifically the characteristics of those entities being regulated.

an adequate data base, we believe that a quantitative analysis is unlikely to be reliable and valid. For example, there may be an inclination to determine the effectiveness of the Policy by relating enforcement actions to the number of Licensee Event Reports ("LERs") filed for a given facility or to the frequency and duration of facility outages. Relying on LERs is not in our view an adequate basis to relate licensee performance to enforcement. LERs are not a valid indication of performance levels. One licensee may file more LERs than another licensee because of the manner in which it construes the same LER requirements set forth in 10 C.F.R. § 50.73, or because of the widely divergent scope or level of detail in particular plant Technical Specifications. In addition, some LERs record more serious events than others. Therefore, counting LERs and relating them to enforcement activity is not in our opinion a valid or reliable examination.

Similarly, the frequency and duration of facil~ty outages do not reflect the level of licensee performance due to the effect of the Enforcement Policy. For example, the duration of an outage may indicate the number and extent of backfits imposed by NRC or initiated voluntarily by a licensee. Consequently, a longer outage may reflect changing reg~latory requirements or licensee efforts to upgrade its plant on its own initiative.

For these reasons, we urge the Committee to speak with representatives of power reactor licensees and ask them directly what impact the Enforcement Policy has had on their mode of operation and to consider the comments others actually involved in the enforcement process have submitted, rather than basing its recommendations heavily on quantitative data. Perhaps at some future date this data may be sufficiently developed so that policy decisions may be based on it. However, we believe that such time has not yet come.

II. Overall Effectiveness of the Enforcement Policy Introduction.

The Enforcement Policy has a number of objectives which all flow from the overall mission of NRC to promote and protect the radiological health and safety, including the health and safety of licensee employees, the common defense and security and the environment. These objectives are ensuring compliance with NRC regulations and license conditions; obtaining prompt correction of violations; deterring future violations; and encouraging improvement of licensee performance as well as the prompt identification and reporting of potential safety problems.3 The question is whether the enforcement mechanisms currently in place, i.e., enforcement conferences, notices of violation, civil penalties, and orders, satisfy these goals.

3 10 C.F.R. Part 2, Appendix Catt I.

overall we believe that the enforcement mechanisms in place generally achieve these goals. However, particularly with regard to the civil penalty process, enforcement at NRC continues to be unnecessarily adversarial. As a matter of policy, it would be more conducive to productive interface between the NRC and its licensees, in order to achieve the mutual objective of safe reactor operations, if the process was more cooperative

• As a result, we believe that several changes should be made in the Enforcement Policy which, if implemented, would enhance its effectiveness and improve the extent to which the objectives of the Enforcement Policy are achieved. In summary, we recommend that before NRC take escalated enforcement actions it advise the affected licensee informally of the nature of the enforcement action under consideration(~, specific provisions violated and possible civil penalty amount) and meet with the licensee to

- discuss the enforcement action NRC is considering as well as the corrective actions the licensee has or will be implementing. The goal of this meeting would be to reach an agreement - a remedial action plan - on the matter before the formal enforcement process is invoked. If such agreement were reached, it would be reduced to writing and that agreement would then serve as the formal enforcement record, along with the Notice of Violation and other enforcement documents, if appropriate. The exact procedure envisioned is set forth in Section III of these comments.

- 7 Our proposal is designed to take advantage of those enforcement mechanisms already in place which we believe are effective and to modify those which may be counter-productive or at least minimally effective. Our comments in the balance of this Section discuss each of those mechanisms.

Enforcement Conferences We believe that Enforcement Conferences can be very effective in ensuring compliance with NRC regulations, obtaining prompt correction of violations, deterring future violations and encouraging improvement of licensee performance, provided that they are calculated to lead to an open and frank exchange between licensees and NRC. For this condition to be achieved, NRC must not use such conferences exclusively as fact-gathering tools, but rather should be prepared to identify with specificity its concerns and the scope of a possible enforcement action arising

- out of a specific circumstance. In addition, a licensee must be equally prepared to outline the actions it has taken or plans to take to correct past and avoid future violations. Enforcement conferences are not used to their fullest extent when they amount to nothing more than an opportunity for a licensee to explain its corrective actions without knowing what is of concern to the NRC Staff, as is often the case. In too many instances the existing practice is for a licensee to state its case only to find the Staff unwilling or unable to discuss its concerns with the licensee.

As summarized above, there are a number of procedural modifications we believe should be made to the Enforcement Policy which would in our opinion improve the effectiveness of Enforcement Conferences. These recommendations are set forth in detail in Section III of our comments.

Notice of Violations A Notice of Violation is effective in achieving compliance with existing requirements and in assuring that future similar violations do not occur, at least when relatively minor violations are identified.4 Because more serious violations usually involve enforcement conferences and civil penalties, we do not believe that the effectiveness of notices of violations can be assessed in the context of those violations without regard to such other enforcement tools. Therefore, we do not attempt to do so here.

Civil Penalties We note from the outset that the imposition of civil penalties can be related logically to only some of the objectives of the Enforcement Policy. These include the achievement of compliance with NRC regulations through the deterrence of violations and assuring that "a licensee does not deliberately profit from violations of NRC requirernents."5 We also believe that while the objectives set forth in the Enforcement Policy of 4 10 C.F.R. § 2.201; 10 C.F.R. Part 2, Appendix Cat 1 V.A.

5 10 C.F.R. Part 2, Appendix Cat f I.

encouraging the improvement of licensee performance and the prompt identification and reporting of violations are achieved to some extent by adjusting the amount of a proposed civil penalty, if civil penalties as an enforcement tool are overused or used improperly, the motivational impact of such adjustments may be vitiated. This is because licensees may come to question the overall fairness and legitimacy of the underlying civil penalty process.

Achieving compliance with NRC regulations and obtaining prompt corrective action rest on the premise that the imposition of civil penalties has a "motivat.i,onal impact 116 on power reactor licensees. We generally agree that civil penalties have this impact. However, in our opinion the possibility exists that unless three changes are made in the manner by which such penalties are imposed, their motivational impact may be eroded.

- First, we believe that the Staff should decline to propose civil penalties when a licensee has promptly commenced corrective actions which the Staff reasonably concludes will be effective in achieving compliance and avoiding future similar violations of NRC requirements. In terms of motivating both the specific licensee involved in the enforcement action and all licensees in general, it is difficult to understand how the objectives of the Enforcement Policy will be furthered if, notwithstanding 6 Diver, The Assessment and Mitigation of Civil Money Penalties by Federal Administrative Agencies, 79 Colum. L. Rev. 1435, 1436 (197~).

effective corrective action, NRC insists on imposing a civil penalty even after corrective* action is commenced. This is particularly the case where such corrective action is voluntarily and promptly initiated and is more resource intensive than a civil penalty which the Staff may impose.

Two examples illustrate this point. If an NRC inspection reveals documentation deficiencies in a license applicant's

• construction quality assurance program, and the applicant commits immediately following the discovery of these deficiencies (and before any NRC enforcement action is taken) to perform a detailed reinspection, the subsequent imposition of a civil penalty is unlikely to provide any additional motivation to that or any other applicant to satisfy all governing docmnentation requirements. The specific applicant will have expended far more in corrective actions than the amount subsequently assessed in a

- penalty, and all other applicants will have learned of the noncompliance and its effects. This is particularly the case if as a result of the corrective action plant licensing is delayed.

Similarly, if an operating plant fails to satisfy all applicable surveillance requirements and the licensee agrees to implement an independent audit designed to identify the causes of and eradicate such errors, it is doubtful whether the subsequent imposition of a civil penalty will provide additional motivation to improve the level of performance. In terms of actual monetary outlays and personnel time, the costs of improving performance

will almost certainly exceed the amount of a civil penalty. Both the affected licensee and all other licensees will thus be impressed with the knowledge of how expensive unacceptable performance can be.

We are not suggesting in such cases that no enforcement action should be taken. However, we are saying that under these circumstances the assessment of civil penalties after corrective action is commenced may not be appropriate. Certainly the incremental cost to the affected licensee of such penalty when compared to the efforts needed to improve performance levels do not suggest that much is gained in terms of deterrence.

Moreover, subjecting licensees to the civil penalty process after such corrective actions are implemented undermines licensee morale by supporting erroneously that corrective actions thought to be adequate and effective may be neither and by exposing the

- licensee to adverse publicity resulting from the assessment of the civil penalty.

We recognize that the Enforcement Policy provides for the mitigation of up to 50% of a proposed civil penalty for extraordinarily prompt and extensive corrective action and agree that this is a desirable feature. 7 However, in terms of motivational impacts, it is difficult to understand why this feature of the Enforcement Policy is limited to 50% of a proposed civil penalty and why it does not apply as a matter of policy to 7 10 C.F.R. Part 2, Appendix C, § V.B.2.

violations of all severity levels. It is also not clear why this factor is framed in terms of mitigation when it may be more appropriate in certain cases not to even propose a civil penalty which would then be mitigated. Finally, nowhere does the Enforcement Policy recognize the adverse impact on plant morale a civil penalty may have if it is proposed well after a licensee has commenced or even completed effective corrective actions

• Accordingly, we believe that the Enforcement Policy should clearly provide that in cases where extraordinarily prompt and extensive corrective action is taken, a civil penalty may not even be proposed. We also suggest that the policy provide for 100% mitigation of a proposed civil penalty where extraordinarily prompt and extensive corrective action is taken, regardless of the severity level of the alleged violation. Finally, we suggest that unless procedures along the lines described in Section III

- are implemented, the Policy be modified to state that where prompt and extensive corrective action is taken, unless a civil penalty is proposed within thirty days following the discovery of an alleged violation, no civil penalty will be proposed. A licensee should not be unfairly subjected to an untimely enforcement action because NRC is slow in gathering the facts or making its decision.

The second change that we believe should be made in connection with the issuance of civil penalties is in the practice of NRC issuing press releases when such penalties are

proposed. The Enforcement Policy currently provides that press releases are issued at the time civil penalties are proposed for Severity Level I, II and III violations.8 We believe that this practice is counter-productive to the objectives of the Enforcement Policy and may have a corrosive effect on the relationship between NRC and the regulated community.

Although the Staff has in the the past rejected pleas to end this practice, 9 we believe that a reassessment is in order. As noted above, currently an enforcement conference is usually held during which a licensee allegedly in violation of NRC requirements is provided an opportunity to explain its corrective action. The Staff generally does not disclose the nature of the enforcement action it is considering nor does it respond directly to the licensee's presentation at the meeting. Moreover, while the licensee and Staff often agree with the facts in a particular

- case, the Staff may not advise the licensee of the specific regulatory provision it believes is violated or its theory as to how certain facts constitute such violation.

As a result, the first time a licensee often becomes aware of the exact nature of an enforcement action is when the Notice of Violation and Proposed Imposition of Civil Penalty is issued.

This is also when the Staff issues its press release announcing 8 10 C.F.R. Part 2, Appendix Ct VI.

9 See SECY-83-487, Revised General Statement of Policy and Procedure For Enforcement Actions, November 29, 1983 at 1-2.

the enforcement action. Consequently, in many cases the press will have the Commission's announcement of the.enforcement action before the licensee receives the enforcement documents in the mail or otherwise learns of it. When called by the media under these circumstances, licensees have no choice but to respond, "No comment." All too often that response is viewed by the public as an admission of guilt, or worse, an attempt to be evasive

• In addition, press releases often are issued long after a licensee has implemented corrective action and in many cases they fail to reflect such action. As a result, the misperception is created that the licensee has yet to implement such actions or that the actions implemented are unsatisfactory. This cannot help but to mislead the public and undercut the morale of those actually responsible for implementing the corrective actions.

We readily concede that NRC has no control over what stories 4I the media follows or how they choose to report them. We also recognize that the agency must have an efficient manner for responding to press inquiries regarding enforcement. However, in our view, NRC has the obligation, as an agency with recognized expertise in the regulation of power reactors, to assure that the press releases it issues are calculated both in timing and content to provide all of the relevant facts so that the public has a full understanding of enforcement actions taken by NRC, and in particular, the safety significance of the alleged violation.

We believe that NRC could better satisfy this obligation by

adopting an enforcement procedure along the lines of that set forth in Section III, in which the Staff and a licensee would reach agreement concerning issues raised by an alleged violation before formal enforcement action is taken. In any event, at the minimum, NRC should coordinate its release of enforcement documents to the affected licensees with its issuance of press releases so that licensees have the necessary information to

• enable them to respond to press inquiries regarding enforcement actions.

The third change we believe should be made in the Enforcement Policy involves the imposition of civil penalties for alleged Severity Level III violations of plant Technical Specifications. The Staff has correctly recognized that "routine" civil penalties in the amount of $40,000 to $50,000 may very well have diluted the effectiveness of civil penalties as an

- enforcement mechanism, particularly when the alleged violations involve the failure to comply with plant Technical Specifications. To solve this problem the Staff recommended and the Corrnnission adopted a number of revisions to the Enforcement Policy. These included providing for mitigation of a civil penalty based on a licensee's prior good performance; providing explicit examples in Supplement I of the Policy to illustrate more clearly which Technical Specification violations are to be categorized as Severity Level IV and which are to be categorized

as Severity Level III; and establishing that the Regional Administrators have the authority to determine the safety significance and Severity Level of such violations. 10 We believe that these changes are desirable. However, they do not address the underlying problem of violations involving Technical Specifications - the nature of Technical Specifications themselves. Technical Specifications were intended originally to assure that plant operation remains within the assumptions of the underlying plant safety analysis. At the present time they are a catch-all document which incorporates whatever NRC believes should be imposed on licensees as a legally binding operational requirement. The growth in the number and scope of Technical Specifications is evidence of this phenomenon.

[T]here is neither a statutory nor regulatory requirement that every operational detail set forth in an applicant's safety analysis report (or equivalent) be subject to a Technical Specification, to be included in the license as an absolute condition of operation which is legally binding upon the licensee unless and until changed with specific Commission approval. Rather, as best we can discern it, the contemplation of both the Act and the regulations is that Technical Specifications are to be reserved for those matters as to which the imposition of rigid conditions or limitations upon reactor operation is deemed necessary to obviate the possibility of an event giving rise to an immediate threat to the public health and safety.11 10 SECY-83-487 at 6; 49 Fed. Reg. at 8584, 8586.

11 Portland General Electric Co. (Trojan Nuclear Plant),

ALAB-531, 9 NRC 263, 273 (1979).

The Staff itself has recognized that Technical Specifications have become too complex. In 1983 the NRC Task Group on Technical Specifications concluded that "some Technical Specifications have the potential for adversely affecting safety and some do not appear to be cost effective. 12 11 Further, over two years ago the Commission sought public comment on proposed amendments to Part 50 which were intended to reduce the volume of

• Technical Specifications.13 The amendments have yet to be promulgated. Until this underlying problem is addressed, improved enforcement policy and practice will suffer.

Nevertheless, modifications recently implemented to NRC enforcement practice and policy regarding violations of Technical Specifications do raise one significant point. The critical distinction in terms of civil penalties continues to be whether an alleged violation is categorized as Severity Level III or IV,*

a decision which is now made by the Regional Administrators. But Severity Level IV violations are not subject to review by I&E Headquarters. Nor (unlike escalated enforcement actions) are enforcement actions for Severity Level IV violations centrally available to the industry anywhere within NRC. As a result, it is impossible to assess how this authority is being implemented and whether all Regions are implementing it consistently. It is 12 Technical Specifications -- Enhancing the Safety Impact, NUREG-1024; November, 1984; abstract.

13 47 Fed. Reg. 13369 (1982).

also impossible to determine with any kind of certainty through the use of precedent where the dividing line between Severity Level III and IV violations falls. We believe the failure of NRC to make this information readily accessible is unfortunate, and undercuts its efforts to more precisely use civil penalties to motivate conduct.14 Orders

• In our opinion, orders are perhaps the most effective enforcement mechanism available to NRC for achieving many of the goals of the Enforcement Policy. They clearly are effective in obtaining prompt correction of violations. In addition, because they have often required_corrective actions they are useful in ensuring future compliance with NRC regulations and license conditions. Finally, because of the resources a licensee is often required to use to sati 9 fy the terms of such orders, we believe that they deter future

• violations and encourage the improvement of licensee performance.

III. Suggested Modification to Enforcement Practice and Procedure The previous section provided our views concerning the extent to which existing enforcement mechanisms satisfy the goals of the Enforcement Policy. This section outlines several changes in enforcement practice that we believe should be made to enhance the effectiveness of the Enforcement Policy and improve the 14 See Diver, Civil Money Penalties, supra, at 1496-1498.

extent to which its goals will be achieved. These suggestions are intended to provide a general framework around which more specific modifications to the policy can be built.

Specifically, several of the problems outlined in Section II will be significantly reduced, if not avoided altogether, if the following procedure was incorporated into the Enforcement Policy:

1. Promptly after the discovery of an alleged violation, NRC and the licensee would meet to discuss the incident and corrective actions already implemented or under consideration.

2. Following this meeting NRC would advise the licensee of the enforcement action it is considering. NRC would identify with reasonable specificity the regulatory provisions allegedly violated as well as the likely enforcement action under consideration

( ~ , civil penalty in the amount of $50,000~

confirmatory order, etc.).

3. Following receipt of this information the licensee would advise NRC of its completed or intended corrective actions.

4. Based on this exchange of information the NRC and licensee would jointly assess whether an agreement (in the form of a remedial action plan) can be reached as to the alleged violation, the proposed penalty, and corrective actions to which the licensee is willing to commit.

5. If so, a meeting would be scheduled to craft the exact terms of agreement. After the agreement is ratified by both the licensee and NRC, the NRC would issue, if appropriate, a Notice of Violation, Proposed Imposition of Civil Penalties, or Order along with a press release. Those documents would reflect the agreements reached. In such a case there would be no need for the licensee to respond to the formal enforcement documents. (Of

course, the appropriate regulations in 10 C.F.R. Part Two, Subpart B would need to be amended.)

6. If not, or should NRC conclude that the licensee was not negotiating in good faith, it could commence an enforcement action in accordance with existing procedures.

We believe that this procedure has a number of advantages.

First, it provides an institutionalized mechanism by which

• information and ideas can be exchanged before formal enforcement mechanisms would be implemented. As a result the Staff would have a much better understanding of the corrective actions a licensee is undertaking and the licensee would better appreciate the perception of the Staff as to those actions and the alleged violations. In terms of achieving compliance with existing requirements, such understandings are crucial.

Second, this process may avoid those situations where the

- Staff has proposed a civil penalty and later either withdrew or mitigated it because the proposed penalty was based on a factual error or did not upon further reflection account fully for a licensee's corrective actions, prior enforcement history, or other mitigating factors. Although we recognize that the Staff may withdraw or mitigate a civil penalty after it is proposed, doing so rarely would repair the damage a licensee may suffer in terms of the public perception of its conduct.

Third, our proposed process avoids many of the current problems raised by the practice of issuing press releases when civil penalties are proposed. Should the Staff and licensee be able to reach an agreement concerning the alleged violation, penalty and corrective actions before formal enforcement docmnents are issued, those documents and the related press release will reflect initially the entire disposition of the alleged violations and as a result convey more accurately all relevant facts. This process would in our opinion result in NRC more effectively using its enforcement authority.

IV. Specific Questions Raised In The Federal Register Notice Effect of the Enforcement Policy.

Detection and Correction of Violations. As indicated previously, the Enforcement Policy has to some extent an impact on the conduct of licensees, especially because civil penalties may be mitigated if licensees promptly identify and initiate extraordinary corrective actions. However, this motivational impact is tempered by two other factors. First, should civil penalties come to be viewed by licensees as inevitable given the number of requirements they must satisfy(~., Technical Specifications) and the frequency with which civil penalties are assessed by NRC, the motivational impact of mitigating such penalties may be eroded. This is because licensees could come to feel that the underlying civil penalty was not fairly proposed.

Second, licensees have a far greater incentive to detect promptly and correct violations than the fear of an NRC enforcement action. That incentive flows first from its responsibility and obligation under federal law to operate a safe plant, and also from the fact that the plant represents a significant economic investment that prudent managers will carefully operate

• Reporting of Violations. The Enforcement Policy provides that civil penalties may be mitigated for the prompt reporting of alleged violations.15 Again, we believe that this aspect of the Enforcement Policy has a motivational impact on licensees.

However, such impact may be limited to the extent that a licensee perceives a civil penalty was imposed unfairly. Clearly, the effects of mitigating such penalty on a licensee's motivation are going to be greater when the Staff is viewed as fairly invoking its civil penalty authority and then reducing the penalty actually imposed.

Prevention of Violations. The greatest incentive licensees have to prevent violations and achieve high performance levels flows not from the Enforcement Policy but from the responsibility each licensee feels to affirmatively safeguard the public health and safety. In addition, licensees and their employees engaged in the operation of power reactors are very aware that they are responsible for multi-billion dollar assets. Under these 15 10 C.F.R. Part 2, Appendix C, IV.B.l.

circumstances, while the need to avoid violations (and in doing so avoid enforcement actions) motivates licensee conduct, other factors play an even more important role in preventing alleged violations of NRC requirements.

Safety Record of Licensees. Enforcement history is one factor to be considered when assessing the safety record of licensees. AB noted above, the major motivators for excellence in licensee performance are first the responsibility to operate the plant safely, and also the need to manage such a major interest prudently. Therefore, while the Enforcement Policy plays a role in motivating a licensee to maintain the best possible safety record, it is not the major incentive for doing so.

Morale of Licensees and Their Employees. As indicated in Section II of these comments, in certain cases civil penalties

- and resulting publicity may have adverse impacts on the morale of licensees and their employees. The inevitability of enforcement actions also impairs that morale. We have provided in Section II and III certain changes in NRC enforcement procedures which may solve this problem.

In addition, we believe that the current NRC policy regarding material false statements has an adverse impact on the morale of licensee and their employees. In fact, accusations against an individual for submitting a material false statement, whether or not intentional or of safety significance, have had

devastating personal and professional consequences that far outweigh the gravity of the alleged offense. For this reason alone, we believe that the NRC must reevaluate its current policy regarding material false statements, and we have provided our views on this to the Commission.16 Public's Confidence in the Enforcement Program.

It is difficult for us to assess the confidence of the public in the NRC Enforcement Program. However, we believe that if the NRC fails to use its civil penalty authority with some degree of circumspection, the public may conclude erroneously that licensees are unwilling or unable to operate plants safely and that the Commission is unable to assure compliance with its own requirements. This view could become prevalent if the NRC is perceived as continually proposing one civil penalty after another. We do not believe that NRC is at this point and recent

- changes to the Enforcement Policy designed to reduce the number of smaller civil penalties give us reason to believe that the Staff is aware of this problem.17 Willingness of Workers and the Public to Report Alleged Violations. We do not have any basis to comment on this issue.

16 See notes 20-25, infra, and accompanying test.

17 ~ note 10, supra. and accompanying text.

Features of the Enforcement Policy.

Tables of Civil Penalty Levels. We believe that the base civil penalty tables are set at appropriate levels.

Upward and Downward Adjustment of Base Civil Penalties. As discussed in Section II, we believe that mitigating factors should be considered for violations of all Severity Levels, including Severity Level I violations.18 We have been unable to ascertain any reasons for precluding as a matter of policy the application of these factors to even the most serious violations of NRC requirements.

Classification of Violations By Severity Level. We agree with the approach used in the Enforcement Policy of classifying violations by severity level and in this regard we have the following comments. First, the severity level of a particular violation should,reflect only its safety significance. Severity

- levels should not reflect what the Administrator of Region III characterized as regulatory importance. 19 If an area of activity regulated by NRC, such as transportation or reactor construction, does not pose an immediate and significant potential or actual threat to the public health and safety, then by definition it could not be characterized as Severity Level I. We believe that 18 See note 7, supra, and accompanying text.

19 Transcript of January 30, 1985 Meeting of the Advisory Committee on Enforcement Policy ("Tr.") at 82-83.

NRC enforcement is one means by which the public should be educated as to the true safety significance of an alleged violation.

Second, because not all violations in a given Severity Level for all areas of activity are of the same safety significance, the Enforcement Policy may yield anamolous results. For example, a Severity Level I violation in reactor operations is most likely to have greater safety significance than a comparable violation in reactor construction. Yet the base civil penalty for both is

$100,000. We fail to discern the underlying policy reason for this result. In our opinion, the safety significance of alleged violations in the same Severity Level but in different areas of NRC activity should be roughly equivalent, even if it means that for some areas of activity (such as reactor construction) there are no Severity Level I violations.

Policy on Material False Statements. We submitted detailed comments on the issues raised by the Commission's current policy regarding material false statements.20 We understand that the Committee has reviewed these comments21 and we hereby reaffirm them.

20 June 1, 1984 letter from Nicholas s. Reynolds to Samuel J. Chilk, regarding Revised Enforcement Policy at 2-12.

21 50 Fed. Reg. 1143 (1985).

In addition, we have analyzed the Staff proposal on material false statements 2 2 on a preliminary basis and have some initial reactions to it. First, we believe that the proposal indicates a very positive swing by the Staff away from the unduly rigid (and we believe unlawful) practice of charging licensees with material false statements for providing any inaccurate information to the NRC, whether orally or in writing and whether or not done intentionally.

However, we would not favor promulgating the proposed new reporting requirement as written. That proposal would, as the Staff characterizes it, apply to "some residual safety information which could affect licensed activities but which is not otherwise required to be reported. 112 3 Unlike other Commission reporting requirements, such as 10 C.F.R. § 50.73, there is no clear standard in the proposed regulation which a

• licensee or applicant could apply other than a standard of "significant safety implications for licensed activity.** 2 4 We do not believe that this standard would provide licensees and applicants with sufficient notice of the nature of the proposed residual reporting requirement.

22 SECY-84-421; Material False Statements; October 30, 1984.

23 Id. at 10.

24 Id. at 6.

- 28 -

Second, the proposed rule is silent as to what would occur if a licensee or applicant incorrectly concluded that information it discovered was found to not have significant safety implications for licensed activities and thus was not within the ambit of "residual" information the proposed regulation would mandate be reported. The Staff apparently believes that in such a case the provision would not apply. It states, as follows:

The standard "significant safety implications for licensed activities" is somewhat vague and may make assessment of reporting obligations difficult. In view of the lack of a clear definition (and the difficulty of providing a more specific description for this residual category of information) and the potential for unfairness in using an "after the fact" test, the rule does not reach situations where a licensee concludes that a matter was not significant even though NRC concludes otherwise.25 However, the language of the Staff proposal is not necessarily consistent with this explanation. If the proposed regulation establishes a legal duty to report "residual" safety-significant information and a licensee or applicant fails to do so because it misperceives the nature of the information, it then has arguably breached the duty to report imposed by the proposed regulation such that an enforcement action could be taken. Yet the Staff has explained that in such a case the regulation would not apply. Although we agree with the Staff that this result is correct, we believe that it must be reflected in the express 25 Id. at 11.

- 29 -

language of the proposed rule. One way of doing so may be by clarifying in the rule that if a licensee or applicant reasonably concludes that particular information does not have a significant safety implication for licensed activity and this conclusion turns out not to be the case, then the duty to report such information established by the proposed regulation would not apply and no ~iolation of the rule would exist

• In any event we understand that the Staff is modifying its proposal in view of the Commission's reaction to it and that this residual reporting requirement will not be included. We believe that deleting such proposed requirement is appropriate.

Relative Emphasis on Negative and Positive Incentives.

With the exceptions noted in Section II of our comments,26 overall we believe that the proper relative emphasis is placed on negative and positive incentives insofar as the Enforcement

- Policy itself is concerned. However, should the Staff be perceived as overusing or abusing its civil penalty authority, the effectiveness of such penalties may be undercut.

Progressive Escalation of Enforcement Sanctions. We generally agree with the use of progressively escalating enforcement sanctions, provided the Staff has a reasonable factual basis for doing so.

Enforcement Procedures. We provide detailed comments on enforcement procedures in Sections II and III of these comments.

26 See note 7, supra, and accompanying text.

Supplement VIII. We provided comments on Supplement VIII (emergency planning) in our June 1, 1984 comments at 22 and reaffirm them here. We note that the Staff also has developed a supplement addressing violations of fire protection requirements. 27 If the supplement is issued it should be included in the Enforcement Policy, perhaps as Supplement IX.

Other Questions

• Sanctions on Individuals. It is necessary from the outset to identify the class of individuals against whom the Cormnission envisions taking enforcement action. If in fact the Commission intends to apply its enforcement authority under the Atomic Energy Act to all non-licensed employees of power reactor licensees, we submit that the Commission may not legally apply Section 234 of the Atomic Energy Act (civil penalties) to those employees. The legislative history of Section 234 is clear that

- Congress intended that Section to apply to a limited type of non-licensee. Its purpose for enacting Section 234 was to enable NRC to impose civil penalties against persons who failed to obtain a license when required to do so, or who once had a license but allowed it to expire and continued performing licensed activity.28 There is no indication in the Act, the 27 Fire Protection Policy Steering Committee Report; Generic Letter 85-01; January 9, 1985 at Enclosure 4.

28 AEC Omnibus Legislation - 1969: Hearing before the Joint Committee on Atomic Energy, 91st Congress, 1st Session 31-34 (1969) (Colloquy between Committee Members and the Committee (footnote continued)

legislative history, or elsewhere that Congress authorized the NRC to impose civil penalties against all non-licensed employees of licensees. In short, we believe that the authority of the Commission to impose sanctions directly on individuals extends to individuals licensed pursuant to 10 C.F.R. Part 55 to operate power reactors and to individuals subject to Section 206 of the Energy Reorganization Act.29 In any event, as a matter of law, civil penalties cannot be imposed on individuals under Section 206 unless those individuals willfully violate that provision. As to licensed operators, for the most part non-willful violations of NRC requirements can be traced to, for example, plant procedures or training programs.

By taking action against the corporate licensee responsible for such procedures or programs, the underlying situation giving rise to the violation will be addressed directly. Moreover, we

- believe that taking enforcement actions directly against licensed operators who inadvertently violate NRC requirements will depress the morale of these employees, thereby making it more difficult for licensees to attract and retain the best possible staff.

(footnote continued from previous page)

Staff with Joseph Hennessey, AEC General Counsel and other AEC representatives).

29 See 48 Fed. Reg. 44170 (1983) (explaining authority of Commission to issue notices of violations to non-licensees).

Regionalization. As a result of regionalization there have been some instances where Regions have taken divergent enforcement actions for the same or very similar alleged violations.30 In addition, there has been a greater willingness of some Regions to issue orders than others.31 Moreover, regionalization has had a significant impact on Severity Level IV and V violations because enforcement actions involving those violations are processed solely in the Regions.

However, the documents recording these enforcement actions are not centrally filed or maintained, as we discussed previously.

As a result, we are unable to determine the consistency with which Severity Level IV and V citations are issued. Nor are we able to determine the dividing line between Severity Level III and IV violations.

Root Causes of Violations. We believe that the current

- enforcement process could more effectively identify root causes of violations if it was less adversarial and encouraged a more effective exchange of ideas and information. One way it could do so is to place greater emphasis on objective interface between the NRC and the licensee, as we discuss in Section III of these comments.

30 Compare Duke Power Co. (Oconee Units 1 and 3); Docket Nos. 50-269 and 50-287; EA No. 83-41; June 2, 1983 with Philadelphia Electric Co. (Peach Bottom Atomic Power Station, Units 2 and 3); Docket Nos. 50-277 and 50-278; EA No. 82-7; March 29, 1983.

31 Tr. at 10-11.

overall lessons learned are effectively transmitted to industry through I&E Bulletins and other NRC issuances (as well as industry information services). However, we believe that NRC should issue such bulletins and other notices only when absolutely necessary.

Licensee Self-Identification and Third-Party

• Evaluations. We believe that NRC should place increased emphasis on the identification of violations by licensees. One way it could do so would be to provide for the complete mitigation df civil penalties or for not even proposing civil penalties in the circumstances described in Section IIr.32 NRC should rely on third-party evaluations when those performing such evaluations determine that such reliance is justified and when the NRC determines that such reliance is appropriate.

Respe nolds tman I COOK YNOLDS 1200 Seventeenth Street, N.W.

Washington, D. c. 20036 202/857-9800 32 See note 7, supra, and accompanying text.

Atomic Industrial Forum , Inc .

7101 Wisconsin Avenue Bethesda, Maryland 20814 Telephone : (301) 654-9260 TWX 7108249602 ATOMIC FOR DC DOCKETED USN~C February 28, 1985 Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Attn: Docketing and Service Branch

Dear Sir:

The NRC published a notice in the January 9, 1985 Federal Register (SO F.R. 1142) in which the Ad Hoc Advisory Committee for Review of Enforcement Policy requested written comments on

• the effectiveness of the NRC Enforcement Policy .

The Atomic Industrial Forum's Committee on Power Plant Design, Construction and Operation has been concerned with the devel-opment of the NRC's Enforcement Policy for several years. Our main concern has been that this Policy emphasizes punitive rather than remedial measures. We provided written comments to the NRC, January 7, 1981, on the "Proposed General Statement of Policy and Procedure for Enforcement." On March 9, 1982, the revised "General Statement of Policy and Procedure for Enforce-ment Actions" became effective. Although the new Policy improved the NRC's procedures to decrease penalties based on mitigation factors, we remained concerned with the effect of this Policy on the nuclear industry. Subsequently we provided comments to Mr. Richard DeYoung, Director of Inspection and Enforcement in a letter of May 6, 1983 and again to the NRC on June 1, 1984 in response to an NRC request for comments.

We believe that objective and uniform enforcement is essential for safe nuclear utilization and acceptance by the public, but it should not rely so heavily on the use of civil penalties.

We are of the opinion that the Enforcement Policy can be improved and made more effective. Enclosed for your consid-eration are our comments and answers to the questions which were requested by the Ad Hoc Advisory Committee for Review of Enforcement Policy.

I would be willing and available to further discuss our views with the Advisory Committee if time *is made available.

J.W. Williams, Jr.

Chairman, Committee on Power Plant Design, Construction, and Operation .

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I .I. Arn:tlAR REGULATORY COM I DOCKETING & SERV!r ~ Tl I' OFF ICE Of' THE , Y OF Tl-:t *o~~- '

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AIF COMMENTS ON EFFECTIVENESS OF THE NRC'S ENFORCEMENT POLICY The following comments are listed in the order published in the Federal Register notice.

I. Effect of Enforcement Policy on:

1. The prompt detection and correction of violations by licensees.

Comment Minimal effect - While the Enforcement Policy may be a motivating factor, it is not a significant factor in causing corrective action. Most violations are identified and corrected without thought of NRC enforcement.

2. The prompt reporting of violations by licensees.

Comment Possibly negative effect - Licensees have probably become more concerned with prompt notification and reporting, but we believe there is a spectrum of inconsistency of reporting. There is a need for both timely and accurate reporting. However, the Enforce-ment Policy has possibly caused some licensees to report prematurely before they have all the facts while other licensees will take time to make sure the problem is real before getting the NRC involved .

Once a violation has been identified by a licensee, there is generally little reluctance to report it promptly.

3. The prevention of violations by licensees .

Comment Minimal effect - Utility licensees work to protect their investments and provide re li ab l e s e r v ice to their customers. The prevention of most violations is a matter of licensee performance. The imposition of a civil penalty possibly has a short term effect, but it does not have the long term effect of seeking excellence through positive motivation.

4. The safety record of licensee.

Comment Minimal or indeterminate effect - same comments as for #3.

5. The morale of licensees and their employees.

Comment Negative effect - Competent people with technical aptitude needed to be nuclear operators and engineers plus existing skilled personnel, will opt for jobs elsewhere rather than subject themselves to a situ-ation perceived to be one of excessive pressure and career risk. Fines and threats of fines tend to reduce open communication and sharing of informa-tion. Also, the imposition of a civil penalty many months after a notice of violation has a negative effect on morale .

• 6. The public*s confidence in the Commission's enforcement program.

Comment Probably negative effect - The fining process does not enhance the public's confidence in nuclear power. The publicity associated with civil penalties tells the public that neither the NRC nor the licensee is doing their job and sensa~ionalizing by the media further results in a continuing erosion of public confidence.

7. The willingness of workers and members of the public to report alleged violations.

Comment Negative effect - There is a dual effect, neither of which is helpful to the safety of the plant nor the industry in general. On the one hand, the number of allegations made at new construction plants has in-creased. Often, the allegations are made only for the sake of delay or as a means of obstruction rather than an attempt to assure a safe plant. On the other hand, there is sometimes a hesitancy among workers to report violations because of the perceived impact it might have on their employment. Thus the policy does not prevent frivolous allegations nor encourage real ones. Various utility/licensee worker reporting pro-grams such as the Detroit Edison Safe Team program have a more positive effect on encouraging the re-porting of legitimate concerns and then providing a feedback mechanism.

II. Comments relating to features of the Enforcment Policy:

1. Are the tables of civil penalty levels set at appropriate amounts?

Comment The fact that a licensee has received a civil penalty with the attendant publicity is generally of more significance than the size of a fine except for the very large fines.

2. Upward and downward adjustment of base civil penalties.

Comment This is an important feature which has been improved in the revised Enforcement Policy but which could be improved further. Civil penalties should not be

• assessed at all where the licensee's corrective action as presented at the enforcement conference is judged to be satisfactory. Civil penalties should be consistent with the safety significance of the vio-lation and normally reserved for willful or grossly negligent violations or situations where the li-censee's corrective action is inadequate. In the latter case, an order could be considered in lieu of the penalty, if appropriate. Minor adjustments have little significance. The fact that a fine is assessed is of greater significance. More prevalent use of complete mitigation for acceptable corrective action would represent a truly positive incentive to the licensee.

3. Classification of violations by Severity Level.

Comment There seems to be little difference between level IV and V violations as far as they are treated by the NRC and the licensee. Also, the public doesn't see any difference between level I and II. Possible levels might be:

level I - mandatory fine or worse level II - possible fine/no fine level III - no fine

4. Policy on material false statements.

Comment Material false statements (MFS) are considered serious violations if there is dishonesty. The problem is, however, in determining whether the false statement was made knowingly. We are aware of the NRC's ongoing Staff and Commissioner dialogue to arrive at a proper definition of a MFS. This is appropriate because the policy on MFS has had a chilling effect on a free flow of communication with the NRC. The definition of a MFS as proposed in the

NRC Memo from Mr. Dircks to the Commissioners dated February 7, 1985 (

Subject:

Modification of the Staff's Proposal in SECY-84-421, Material False Statements) is acceptable to us. Following is the proposed definition from the memo.

"A "material false statement" is defined as an in-accurate or incomplete written or oral statement which was made knowing the statement was inaccurate or incomplete or a written statement which was made with careless disregard for whether the statement was accurate or complete, and which has the capability to influence a reasonable agency expert."

However, we feel strongly that an oral MFS should only be considered as such in the context of formal communication between a licensee official and the NRC.

5. Relative emphasis on negative and positive incentives.

Comment Current incentives are primarily negative. The biggest positive incentive which could be provided would be total mitigation of penalties based on acceptable corrective action following issuance of the Notice of Violation. As currently administered, the NRC generally imposes civil penalties based on the seriousness of the event, with insufficient consideration of subsequent corrective action.

Penalties, if appropriate, should be imposed as timely as possible after the enforcement conference instead of many months later. The current policy results in very negative media coverage at the time of the event and then again many months later. The decision on whether or not to impose a penalty should be based on the NRC's satisfaction with the corrective actions taken by the licensee. These should be the topic of discussion at the Enforcement Conference, and, if determined to be adequate, the pena l ty shou l d be entirely mitigated.

6. Progressive escalation of enforcement sanctions.

Comment This is an area in which there could be significant non-uniformity among regions. Progressive escalation should be exercised with careful judgement. There should be a statute of limitations on old violations.

7. Enforcement procedures such as enforcement confer-ences, publicity policy, etc.

Comment Enforcement conferences, when used properly, can present a constructive opportunity for improvement of performance. They should be a basis for mitigation of penalties. The publicity policy should be revised to provide advance notification to the licensee of at least 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br />. We recognize that utility licensees in their own best interests must maintain an open and candid relationship with the public and media. The NRC should foster this attitude and not undermine the licensee's efforts. Also, we recommend that the NRC issue positive press releases when deserved.

• 8. Supplement 8 of the revised enforcement policy:

We recommend that this new category be deleted as a specific area. If the NRC attempts to second guess every licensee event classification, the end result could be a tendency by licensees to over-classify events. This has very negative implications from a standpoint of impacts on the public and on public perceptions regarding risks associated with the nuclear industry. For these reasons, NRC should re-strict their enforcement to failures to report rather than failures to properly classify events.

III. Comments on Additional Questions:

1. Under what circumstances, if any, should the NRC impose sanctions directly on individuals responsible for violations?

Comment The NRC, in imposing sanctions directly on indi-viduals below the level of a responsible Company Official, is assuming a managerial role without managerial involvement and responsibilities. If the NRC decides it will retain the rights to impose sanctions on individuals, it should be limited to those persons it has licensed and to Company officials in accordance with 10 CFR Part 21.

Normally, all other disciplinary responsibilities should remain with the Company Management. Where criminal sanctions are considered by the Justice Department, NRC sanctions should be withheld so as not to influence or prejudice the case.

2. What has been the effect of regionalization on the enforcement program and its implementation?

Comment There appear to be random inconsistencies of en-forcement. It is possible that the large increase in numbers of small civil penalties is partly a result of regionalization. However, with region -

alization has come improved understanding of the circumstances surrounding incidents. Overall, it is not clear that there is any effect which can be attributed to regionalization.

3. Does the present system identify root causes of violations so that effective corrective actions can be taken? Are lessons learned effectively promul-

• gated to the industry and, if so, by what means?

Comment The present system is relatively effective in identi-fying root causes. The NRC does a satisfactory job in sharing information with the industry via notices, bulletins, circulars, and generic letters. However, industry, via INPO and NSAC reports and other in-dustry reporting and data systems such as Nuclear Network seems to do as good or better job in accomplishing the same goal. Further, the impact of these systems has increased as licensees become more aware of their importance and put a quality effort into the information which is the basis for these systems.

4. Should the NRC consider increasing its reliance for compliance on licensee self-identification or evaluations of third parties?

Comment The NRC already relies heavily on licensees to identify their own violations . Self-identification should continue to be fostered. There is a place for third party evaluations but we believe that these should normally be limited to INPO evaluations or an organization that the l icensee has contract ed to perform an evaluation. Also, there are situations where the NRC has contracted to have a team review of one discipline (equipment qualification, fire pro-tection) conducted at a large number of facilities.

Under all circumstances any decisions as to enforce-ment action should be made by NRC and not the third party.

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~ DEPARTMENT OF HEJ.\~~H l.J~Nl~C 4815 WEST MARKHAM STREET

• LITTLE ROCK , ARKANSAS 72201 TELEPHONE AC 501 661-2000 BILL CLINTON BENN. SALTZMAN, M.D.

DIRECTOR 15 FEB 28 P1:44, -

GOVERNOR February 22, 1985 Secretary of the Commission Nuclear Regulatory Commission Washington, D. C. 20555 Attention: Docketing and Service Branch Gentlemen:

• This letter is in response to the Ad Hoc Advisory Committee for Review of Enforcement Policy's solicitation of comments on the various aspects of the enforcement policy and selected questions.

This Division has the following comments on the questions presented.

1. Regarding the NRC imposing sanctions directly on individuals responsible for viola-tions against a license, we are of the opinion that until the Commission starts to directly license individuals in lieu of facilities, it will not be effective to penalize individuals directly. However, if a National Registry and Licensure Board for Industrial Radiographers, as once proposed, had been put into practice, direct sanctions against a 11 licensed 11 radiographer would have been possible. Another con-cern is the fact that an individual employed by a licensee may not be invested with authority to maintain compliance with the license or to correct the violations.

2. While most aspects of regionalization have been positive, there appears to be one notable exception. Consistency between regions may be lacking. It is suggested that safeguards be instituted to provide a greater degree of uniformity beyond min-imum standards.

3. It is unlikely that the present system can identify the root causes of violations to provide a means of effecting corrective actions. A specific program designed to identify causes and to relate the cause to corrective action would be required and the current policy does not seem to contain such a program.

4. It is strongly recommended that the Commission not increase its reliance for compliance on Licensee self-identification or evaluations by third parties. As an Agreement State, it has been our experience that less effective programs may be unabl ~ to identify problems and that thi rd pa r t y evaluations often go unheeded. Furthermore, as the Commission has a mandate from Congress to enforce regulations, it should not depend on the licensee and/or a third party to carry out this mandate.

We appreciate the opportunity to comment on the posed questions.

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EDISON ELECTRIC

• INSTITUTE The association of el ectric c?mpanies .

111119th Street , NW ~ fEB 28 Pl :25 ,

Washington , D.C. 20036 February 2 8 , 1985 Tel: (202) 828-7400 FFICc-~eF ECRHAR" HC~ING" SUV!Cf.

'lftAN H Secretary of the Commission

u. s. Nuclear Regulatory Commission Washington, DC 20555 ,..,. ~_,;,,, ... ~~ .,~,..,.' ,..,.,,,,.,:

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Attn: Docketing and Service Branch Re: Ad Hoc Advisory Committee for Review of the Enforcement Policy; Request for Written Comments, 50 Fed. Reg. 1142 (January 9, 1985)

Dear Sir:

The Edison Electric Institute is pleased to submit the following written comments in response to the above referenced Federal Register notice, and to indicate our desire to provide an oral presentation to the Ad Hoc Advisory Committee to summarize our viewpoints.

The Edison Electric Institute (EEI) is the national asso-ciation of investor-owned electric companies. Its members serve approximately 96 percent of all customers of the investor-owned segment of the electric utility industry and 73 percent of all ultimate customers in the nation. EEI's members currently operate 71 nuclear power plants with full power operating licenses and 4 with low power licenses, and will operate 27 additional plants now under construction. The NRC enforcement policy and its effects on safe and reliable plant construction and operation are of direct importance to these members.

We commend the NRC for its action in establishing the Ad Hoc ' ii Advisory Committee. The Committee review of the enforcement policy is a positive and appropriate step to take in ensuring that the enforcement policy, as it has evolved, is actually serving its intended purpose to the maximum advantage. Our principle concern abou t the po lic y , v oiced in o u r J une 1 , 1984 comments to the NRC, is that its approach has focused for the most part on punitive enforcement measures without adequate consideration of the negative impact of these measures, and has not provided reasonable positive reinforcement processes.

In developing the enclosed comments, EEI surveyed its members regarding the need for and possible use of positive reinforcement tools or processes (incentives) that would rein-force existing licensee strengths and provide benefits for a job well done, and on the need to address aspects of the current

~ledaed t,yand * .

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• Secretary of the Commission February 28, 1985 Page Two program that can have a negative impact on the motivation and ability of licensees to perform well. This effort is premised on the approach that sound long-range enforcement includes both the carrot and the stick.

The responses from our members indicated that there are a number of areas where steps could be taken to improve the effec-tiveness of the enforcement program. These steps can take the form of either providing increased incentives or of removing the negative impacts of some present practices. It should be noted that reducing negative aspects of the policy equates to a posi-tive incentive. Areas identified include the use of civil penalties, timeliness of enforcement actions, communication between the NRC and licensees, and inspection frequencies.

Significant improvements in the enforcement policy can be achieved administratively without any changes in existing regula-tions. This should result in a more balanced and effective enforcement program.

We appreciate the opportunity to provide these comments. As indicated earlier, we would welcome the opportunity for an oral presentation to discuss these comments with the Ad Hoc Advisory Committee.

Sincerely,

• Mills ident

SPECIFIC EEI COMMENTS TO THE NRC AD HOC ADVISORY COMMITTEE FOR REVIEW OF THE ENFORCEMENT POLICY The primary responsibility for safe operation of nuclear power plants is and must be in the hands of the licensees. The accident at Three Mile Island emphasized the utility licensee's enormous incentive to maintain safe and reliable plant operation*.

The industry has taken major steps to put in place new and stronger institutional arrangements, improved liaison with its regulators, and-improved communication and cooperation within the industry to disseminate operating data among all operators.

Notwithstanding the industry's commitment and motivation, the NRC has the responsibility to have in place a meaningful enforcement program to help ensure that its requirements are fulfilled. We are concerned, however, that the enforcement program as it is currently implemented does not serve its purpose to the best advantage of either the NRC or the licensees.

Basically, action under the NRC' s enforcement program is initiated when a violation of NRC requirements is identified.

The NRC response to a violation should be commensurate with the overall significance of the violation in respect to the protec-tion of public health and safety. If it is not, it can have a serious negative impact on attitude and morale. The perception of working in a negative environment is causing a loss of experi-enced people who do not wish to continue working in a negative regulatory atmosphere. This has serious long term implications and in the short term undoubtedly detracts from the effectiveness of the enforcement program.

• 0 Use of Civil Penalties Overwhelmingly, licensees identified the use of civil penalties as possibly the least effective action in terms of achieving improvements to licensee performance and_increas-ing the protection of public health and safety. The NRC's use of civil penalties is regarded by many licensees to be unjustified, particularly in instances where the licensee identifies the issue and takes timely corrective action, only to receive a civil penalty as a "reward." Civil penalties, in a variety of instances, elicit no additional corrective actions and have a very negative effect on plant personnel morale. The strong negative connotations associ-ated with large fines by the media and public have no balancing positive effects. Also, the present NRC practice is such that when a civil penalty is proposed, the licensee receives notification of the penalty, its basis, and its amount at the same time that the public announcement of the penalty is made. This can create considerable difficulty for the licensee in responding to the large amount of public

interest generated by the penalty. The present program misleads the public as to the safety of the nuclear power industry and is a further obstacle to the future use of this energy source in this country.

The use of civil penalties thus has an extreme effect on licensees, but the effects are generally unrelated to the enforcement arena and are not the primary motivation for improvement. NRC could achieve an equal degree of improve-ment in licensee performance if it used the civil penalty only for cases of willful or negligent violation, or where the licensee's response is inadequate. The stated purpose of the NRC' s enforcement policy is to promote and protect the radiological health and safety of the public including employees' health and safety, the common defense and secu-rity, and* the environment by:

0 Ensuring compliance with NRC regulations and license conditions; 0 Obtaining prompt correction of noncompliance; 0 Deferring future noncompliance; and 0 Encouraging improvement of licensee's performance, and by example, that of industry, including the prompt identification and reporting of potential safety problems. 47 FR 9989 (March 2, 1982)

As presently used, civil penalties do not serve these goals.

The threat alone of potential penalty would be sufficient to encourage the licensee to be responsive. In most cases, the licensee would be responsive even without this threat.

Therefore, although civil penalties have an effect, they are not effective.

The enforcement policy currently contains provisions for mitigation of civil penalties. We believe that increased use of mitigation of penalties for licensee discovered and corrected items of noncompliance would provide positive motivation for licensees. We note that the opinion that flexibility in the mitigation of civil penal-ties could be increased was also voiced by some NRC Regional Administrators when they appeared before the Ad Hoc Advisory Committee on January 30, 1985.

o Timeliness of Enforcement Actions Another major criticism of the enforcement program has been the untimeliness of certain enforcement actions, especially the civil penalty. Civil penalties are fre-quently imposed months after a violation has been identified and corrective action taken. The issuance of a civil penalty in this instance has little remedial effect and, as noted before, has a negative effect on licensee morale.

Giving increased authority to take action to the Region has some potential for speeding up the process. It would still

be important, however, for the Regions to operate under uniform guidance from headquarters I&E.

0 Communications Efforts Management level conferences between the NRC and licensees regarding potential enforcement action should take place as soon as possible after the discovery of a problem, and should be used as a basis for exchange of information that can be used by the NRC in evaluating the appropriate level of enforcement action. The current industry percep-tion is that the NRC's decisions have been made before such meetings take place, and that the action a licensee already has taken or the information brought to the conference has no effect on the ultimate outcome. Meetings held as soon as possible after an incident could help the NRC to reach a decision in a timely manner, and perhaps alleviate some of the concerns mentioned earlier about the delay in NRC action.

0 Inspection Frequency Licensee personnel must expend a substantial amount of time and effort interacting with NRC inspectors. Reducing the frequency of NRC's inspections and audits is attractive to licensee management for two reasons. First, inspections and audits can divert attention away from genuine safety issues to regulatory concerns of lesser real significance.

Secondly, audit and inspections are expensive in that they require experienced manpower to support and respond to the activity.

Reducing the frequency of quality assurance reviews, audits, and inspections at plants with good inspection records and increasing the frequency at plants with poor inspection records could be a valuable motivator. Not only would this incentive promote more effective use of licensee's personnel, but the NRC's resources would also be used more efficiently as well. More attention could be focused on licensees who are in fact in need of more guidance and assistance. To assure acceptability of the incentive, a reasonable minimum frequency of inspections should apply to all licensees.

0 Incentive Programs at Other Agencies As a part of our overall look at potential improvements to the enforcement policy, we also reviewed inspection and enforcement programs of other regulatory agencies that had an identifiable incentive approach in their programs. The findings, summarized in Appendix A to these comments, are provided for your information. It would appear from this review that the adversarial atmosphere that exists between the NRC and its licensees is not present to the same degree at these agencies.

o Individual Sanctions Individual sanctions should be considered only for instances of willful or grossly negligent violations and only where the utility is shown to be totally exonerated.

o Other Issues There are two other issues to which we recommend the Committee pay close attention. First we understand that several industry representatives will be providing specific comments on the issue of material false statements. While we are not providing specific comments on this topic, we agree that this is an area of significant concern to licen-sees, and we urge the Committee to consider it carefully.

Similarly, another area we believe that the Committee should examine is the policy of the NRC Office of Investigations.

The industry perceives that the manner in which investiga-tions are being conducted can have a very negative effect on operating personnel.

APPENDIX A INSPECTION AND ENFORCEMENT PROGRAMS OF OTHER REGULATORY, SAFETY AND PROFESSIONAL ORGANIZATIONS

I. BACKGROUND NRC in 1977-1979 undertook a major, eleven-part study to assess whether its Inspection and Enforcement (I&E) program was effectively structured to accomplish its mission to protect public health and safety and environmental quality.

As part of the effort, Teknekron, Inc., conducted for the NRC, a study to identify ways to improve the effectiveness of I&E activities through a detailed review of I&E programs of other organizations*. A final selection of 20 I&E programs were screened, including:

0 Alaska Pipeline Inspection Program (Alaska}, Department of Interior o American Gas Association (AGA}, Insp~ction and Testing Section, AGA Laboratories o Army Corps of Engineers (Corps), Department of Defense o Atomic Energy Control Board of Canada (AECB) o Bureau of Drugs, Food and Drug Administration (FDA},

Department of Health, Education, and Welfare o Bureau of FoodsJ Food and Drug Administration (FDA},

Department of Health, Education, and Welfare 0 Bureau of Motor Carrier Safety (BMCS), Federal Highway Administration, Department of Transportation o College of American Pathologists (CAP}, Commission on*

Inspection and Accreditation o Consumer Product Safety Commission (CPSC}

o Division of Military Applications, Energy Research and Development Administration (ERDA/DMA) o Divisions of Radiological Health and Nuclear Safety, Illinois Department of Public Health (Illinois)

• "Evaluation of Inspection and Enforcement Programs of Other Programs Regulatory, Safety, and Professional Organizations,"

NUREG/CR-0051 and NUREG/CR-0052, Teknekron, Inc., May 1978 A-1

o Flight Standards Service, Federal Aviation Administration (FAA), Department of Transportation o Meat and Poultry Inspection Program (MPIP), Department of Agriculture o Mining Enforcement and Safety Administration (MESA), Coal Mine Health and Safety Program, Department of Interior o National Aeronautics and Space Administration (NASA), Office of Space Flight, Reliability/Quality and Safety o Nuclear Energy Liability and Property Insurance Association (NEL-PIA) o Occupational Health and Safety Administration (OSHA),

Directorate of Federal Compliance and State Programs, Department of Labor

• o o

Office of water Enforcement and Stationary Source (Air)

Enforcement, Environmental Protection Agency (EPA)

Radiologic Health Section, California Department of Health (California) o United States Coast Guard (CG), Commercial Vessel Safety

~rogram, Department of Transportation.

Based on a preliminary review, six programs were identified for further evaluation based on NRC interests in resident inspection experience, enforcement, inspector management, inspection methods, and management techniques. These six programs included:

• 0 0

0 0

Coast Guard FAA MPIP Corps of Engineers 0 FDA (Bureau of Foods and Drugs combined) 0 Canadian AECB A-2

For this current effort, the information on only those programs that had some identifiable incentive approach were updated. These programs include the FAA, MPIP, and MESA (now MSHA). Department of Transportation programs were briefly reexamined, because of their safety-related nature, even though they displayed no real incentive approaches. The results of these examinations are discussed in detail below.

II. RESEARCH RESULTS Flight Standards Service I&E Program, Federal Aviation Administration The inspection and enforcement program of the Flight Standards Service, now part of the Aviation Standards Branch of the Federal Aviation Administration (FAA), contains many similarities to the NRC's enforcement program. Both programs deal with highly visible industries in which safety is a key concern; both involve high-level technology; both are decentralized; and both must place major responsibility for compliance with regulations and for safe operation on the regulated industry by virtue of resource limitations.

Given these similarities, it is not surprising that NRC's and FAA's

.inspection programs are also quite similar. The major difference seems to be that FAA field personnel can exercise considerable judgement in taking enforcement actions. FAA has developed a list of suggested sanctions, but inspectors can and do consider mitigatinq circumstances in recommending or taking action. Regional personnel can issue emergency grounding or seizure orders without headquarters' authorization. This type of flexibility could be viewed as an incentive that encourages good performance on the part of the industry.

A-3

FAA has several techniques that bear on how frequently inspections are conducted. The agency conducts a type of performance appraisal inspection that is a thorough review of all aspects of an air carrier's operations, including recordkeeping systems. The frequency of such inspections is roughly determined by past performance of the carrier, though it can be done on the recommendation of an inspector or his supervisor, or triggered by particular events (often a pattern of accidents or a loss of money in the previous operating period). A second method also involves "performance", but uses a percentage "trigger." If an airline performs X percent of a given category of industry operations (say DC-10 take-offs and landings in the U.S.),

then it should have no more than X percent of the problems associated with that operation, if the performance of all airlines were of equal

.quality. Hard data can indicate whether an airline is above or below its "problem quota" and therefore indicate whether more (or less) inspection effort may be needed.

Several years ago, FAA tried a statistical approach to determine the frequency of inspections of general aviation (private/company plane) repair stations. Statistics were used to determine the minimum sample size required to reach a predetermined confidence level, and repair stations were selected at random up to the sample size. This program was cancelled after two years because FAA felt that safety could not adequately be assured using this method in an area where the human

.factor plays such a dominant role. Interestingly, the Agency did feel that the method had application to other areas, and now uses random sampling to inspect general aviation aircraft and pilots' certificate cunrency. This use of random sampling partially avoids the human factor (by focusing on the pilot rather than the combination of the pilot and repairman), and carries the interesting possibility of keeping all parties "on their toes."

A-4

Another longstanding FAA. program is the "national *immunity program,"

under which a person who violates FAA regulations or certificate conditions can report the violation to a neutral party (NASA, in this case) and thereby avoid FAA action. This is directly analogous to NRC licensee-identified violations, except in the way that th~ violations are subsequently treated and to whom they are reported. This FAA program still exists, with some modifications. Namely, some of those who reported incidents were not totally truthful (for example, a pilot would report that he made an error "for the first time" in California and it was later found that he had made the same error in Denver and New York), so immunity is now granted only once fbr any single offense, and not for any criminal act *

• FAA has changed the. emphasis of its program since the late 1970s to include education and accident prevention. A "White Hat" (the good guys) inspection program provides the equivalent of a management/operations audit for smaller, commuter airlines, with the aim of encouraging safe operation and compliance. No action is taken against an operator for noncompliant items found during the course of such an inspection. However, correction is required within a specified period of time, and the FAA knows what to look for in subsequent inspections *.

A policy that has been proposed, but apparently not yet adopted, would

.stress the opportunity to correct certain types of problems before the FAA takes action, if an agreement is made to assure that the problem does not recur. This policy would apply only to certain types of situations, primarily actions to suspend pilots' licenses for failure to meet a requirement not related to safety. Some of these situations are "Catch-22s." For example, if a pilot {typically general aviation, not commercial) could not log enough hours of flying time for reasons beyond his control, and thereby faced a license suspension that would make it even harder to regain fully current status, the suspension would be deferred if a legally enforceable agreement were made to A-5

review the necessary training procedures within a specified time. This also appears to be a one-time option: repeat offenses would not be tolerated.

The FAA generally considers its inspection and enforcement program successful. Decentralization of the program to the regional and local offices has provided a greater federal presence locally and much-more thorough knowledge about an airline's operations on the part of the inspectors. However, deregulation has prompted the larger carriers to drop less profitable routes and fostered entry into the market of smaller operators and commuter lines that are now operating larger planes. Most of the domestic air fatalities (about 81 percent) since July of 1982 have involved these smaller operators, many of whom

• contract ou.t their maintenance work. It is* likely that the FAA will make some adjustments to its program or staffing patterns to p~ace more emphasis on commuter and small business airplane operators.

The FAA inspection program has not been perfect, however. In 1973 or 1974, baseball player Roberto Clemente was involved in airlifting food to the victims of the Honduras earthquake. The FAA had previously ordered the inspection of large aircraft, but the privately-owned DC-7 on which Clemente left Puerto Rico to return to the U.S. had not been checked. It crashed, killing Clemente, the pilot, and the co-pilot.

• Clemente's family sued, and the FAA was held liable on grounds of

~negligence. FAA argued that insufficient resources and manpower excused the failure to inspect. The district court disagreed, saying that inspection of all such aircraft was agency policy (Vera Zabala Clemente v. United States, C.A. No. 778-73, D.P.R., Nov. 23, 1976).

However, on appeal to the First Circuit, the lower court's ruling was overturned, apparently because all of the elements required to establish negligence could not be shown (it could not be proven that the lack of inspection caused the crash, nor could the era.sh have been reasonably foreseen).

A-6

Meat and Poultry Inspection Program The Meat and Poultry Inspection Program (MPIP) in the Department of Agriculture is one of the few other programs to base inspection frequency on past compliance history. While MPIP does not deal with high technology, it is similar to NRC's current program in that resident inspectors are placed in all meat and poultry slaughtering and processing plants. MPIP is required by law to examine every animal before it is deemed fit for human consumption. Besides these resident inspectors, MPIP uses a compliance staff, which inspects truckers and warehouses farther along the food distribution chain, and an in-plant compliance staff, which audits performance of the resident inspectors and the overall operations of the direct processing plants

• The compliance staff uses computerized systems to track its inspection activities. Facilities that process meat or poultry, and those that truck or otherwise handle meat products, are placed in risk categories that are directly related to the number of violations uncovered in past inspections. The compliance staff uses five risk categories, with inspection of firms in the *riskiest" category (poorest past compliance history) conducted at least every 90 days~ firms in category 5 are ins*pected at least every four years. The in-plant staff uses four categories, with inspection frequencies ranging from every six months

• to every three years.

MPIP's program has evolved over the course of years and continues to do so. Supervision of the in-plant inspectors has been and continues to be a weak point, because the indus*try is so dispersed. The establishment of the compliance staff in 1966 and the in-plant compliance staff in 1972 represented an attempt to exercise more control and supervision over the actions of the in-plant inspectors.

While there are still gaps in the program, it has been basically quite successful in keeping adulterated meat and poultry products off the A-7

market. MP!P feels that the compliance staffs have led to improved performance. The number of violations per 100 reviews by the com~liance staff was reduced from eight to one in about eight years and now averages about one. The in-plant compliance staff lists fewer than 30 .plants (out of about 7,000) consistently in the worst review categories.

The actual inspection procedures have also changed over time in response to improvements in automation, in animal genetics and health, and in flock management. In the mid-1970s, inspection procedures (for poultry) were modified to account for more uniform birds and increased processing line speeds. Effective November 23, 1984, a 0 New Line Speed 0 , (NELS), inspection system became effective for broilers and

• Cornish Hens, and certain features of NELS can be considered as incentives. NELS is optional. An establishment that wishes to adopt NELS must meet certain physical plant standards and develop and gain approval for a quality control program. Modifying the plant and developing a QC program will cost money (though the annual cost to the economy is estimated to be less than $100*milliOn), but the incentive is an increase in line speed to a maximum of 91 birds per minute, up from 70. This potential 30 peftent increase in productivity is expected to far outweigh any costs incurred. NELS also offers the incentive to both the industry and MPIP of more efficient use of

.manpower resources.

Mine Safety and Health Administration (MSHA)

This program, which before the passage of the Mine Safety and Health Act of late 1977 was under the jurisdiction of the Mining Enforcement and Safety Administration (MESA), is now located in the Department of Labor rather than Interior. The 1977 Act institutionalized many enforcement requirements (mandatory fines for all violations, etc.) for coal mines and extended many requirements of the 1969 Coal Mine Health and Safety Act to metal and nonmetal mines. In the 1976-77 time frame A-8

of the Teknekron study, interviews with MESA personnel predated the 1977 law, and focused exclusively on the coal mine inspection program.

Since 1969, minimum inspection frequ~ncies for underground and surface coal mines have been specified by law - once per three months for underground mines and twice a year for surface mines. "Spot*

inspections could also be conducted, and the frequency of these was apparently based on a perceived level of risk (for mines perceived to be more dangerous, spot inspections could occur as frequently as every five working days, on the average).

In about 1976, this "perception of risk" was crystallized in the "Mine Profile Rating System", which rated individual mines according to their

- disabling injury frequency rates and compliance records over the previous year, as well as their health and safety management capabilities and programs. This system was not intended to rate mines against one another but against an *absolute* point system, in which a total of 1000 points (200 for disabling injury rate, 300 for compliance with federal regulations, and 500 for health and safety management programs) was a perfect score. The system first covered "large" mines (150 or more employees), but was to be extended to smaller operations as conditions warranted. Because large operations received proportionally more citations, a scaling factor based on the number of employees was to be applied. A major purpose of the system was to

.focus inspection resources on mines with poor records in order to use federal manpower more effectively and to improve industry performance.

While tests of the MPRS were reported favorably by MESA and apparently by the mines at which the system was tested, MPRS did not last very long. Current contacts could not say why the approach had been discontinued, but it ~learly is no longer in use and appears never to have been widely applied. Based on past experience with programs of this sort, a number of reasons for MPRS's demise can be suggested:

A-9

o Because numbers were produced, the system carried the potential for ready comparisons between mines, even though not so intended. In the long run, neither the mine operators nor MSHA would have found this potential palatable unless ways to make all mines "acceptable" were found. No one wants to be lowest on the list, nor does the inspection agency wish to be accused of letting relatively poor performers continue to operate. This is a generic problem with many forms (not all) of licensee performance evaluation and, by extension, with incentive systems based on performance.

0 MESA recognized that large and small mines could not be scored equally in terms of the MPRS categories, because size of operation influenced numbers of citations and the format of health and safety functions. This appears to have been related to the number of employees and the.multiple roles that some employees might perform. MESA found it difficult to properly adjust the rating scheme to individual differences.

This situation is analogous to utilities operating their first nuclear plant as opposed to those with many plants.

,o While tests showed that different inspectors did not rate a particular facility very differently, there was enough variation to cause MESA to revise its inspector instruction and audit programs. Given a reasonably uniform population of licensees as well as uniform inspection guidelines and training, this problem could be minimized but not eliminated.

Department of Transportation There are no clear incentives apparent in the inspection and enforcement programs of the Bureau of Motor Carrier Safety (BMCS) or the Federal Railroad Administration (FRA) of the Department of Transportation (DOT). These programs are similar, (inspecting A-10

equipment, crew time records, hazardous materials, etc.), and are implemented primarily on an as-needed basis determined by spot checks or by complaints. FRA has one substantial advantag~ over BMCS.

Inspection and regulation of the vast interstate traffic on roads is virtually impossible on anything but a spot-check basis, whereas inspection of the railroads can be far more complete simply because of I

numbers, schedules and specified location.

The only possible incentive found in these DOT programs is a relatively new feature at the FRA called "system assessments." These are essentially p~rformance appraisal inspections from which no fines result, but are intended to foster compliance and safety through teaching. assistance. The basis for these inspections is a computerized

- accident/complaint system that can alert FRA if a problem may be developing with a particular railroad. It is not known whether pre-determined trigger levels are built into the system or whether a person periodically scans it to sense a potential problem developing.

In either case, the goal is to prevent accidents by providing information.

III. CONCLUSIONS A general conclusion from an examination of these I&E programs is that very few direct positive incentives exist, either in the recent past or now. Using compliance records to determine inspection frequency (i.e.,

less frequent inspection as a consequence of good performance) is the most common, but even this is relatively rare. Reduced inspection frequency may be to some degre~ incompatible with a resident inspector program such as NRC's, though balancing the content of the resident/regional/special inspection areas could compensate for this.

A trend that has appeared, at least partly due to an emphasis on deregulation, is "management audit" inspection, in which the aim is to make a thorough examination of an entire operation with no penalties assessed. These inspections emphasize education about requirements and A-11

overall safety, but also serve to alert the inspecting agency about where potential problems may occur. Finally, a long-standinq "self-reporting" program of the Federal Aviation Administration has been tightened to reduce the possibility that repeat offenses could escape without penalty.

One important observation from an examination of these programs and from the Teknekron and TRW reports is that incentives must be linked to some means of measuring "performance". This in turn implies that an evaluation of the performance of the regulating agency's own program in meeting its goals is also needed. These have always been difficult parameters to measure, but they need to be considered in any regulatory

. program if the goals of safety and the provision of public service are

• to be met. Particularly when public health and safety is the goal, using only surrogate or indirect measures, such as compliance with regulations, may be misleading. Within the strictures of th~ Atomic Energy Act's goals of protecting public health and safety and the fairness requirements of the Administrative Procedures Act, NRC could probably adopt any or all of the incentive mechanisms in use by other agencies. Some are already in use by the NRC to some extent.

Performance Appraisal Team Inspections are basically management audits (though there is no "amnesty" for noncompliances discovered), the current enforcement policy provides some flexibility through mitigation or escalation of penalties. Penalties may be reduced where the

.licensee identifies, reports and quickly effects corrective action. It is possible that these types of mitigating actions could be expanded or strengthened, but at least the seeds are there.

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TE L EPHONE GERALD CHARN0FF, P .C. 1202 1 822- 1032 February 28, 1985

• Mr. Samuel J. Chilk Secretary U.S. Nuclear Regulatory Commission Washington, DC 20555

Dear Mr. Chilk:

The Commission's Ad Hoc Advisory Committee on Enforce-ment Policy has solicited public comments on a number of aspects of the present NRC enforcement policy, which took effect in March of 1984. We previously submitted extensive comments on June 1, 1984 in response to an earlier request by the Committee for views on that policy. A copy of those comments is provided with this letter and we should appreciate your making these views available to the Advisory Committee.

That letter comments on a number of matters with respect to which the Advisory Committee has again requested comment.

In this letter we add some comments based on our own observations and information from some of our clients con-cerning the impact of the present enforcement policy on the matters listed by the Committee (see 50 Federal Register 1143) and to respond in more detail to the four specific questions raised by the Committee.

I. Implications of Present Policy on Correction of Violations, Morale, Safety and Public Confidence We recognize that during the past year, in isolated instances, there has been some tendency by the NRC to give greater recognition to licensee responsiveness to identified problems. However,

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SHAW , PITTMAN , POTTS & TROWBRIDGE A PARTNERSHIP OF PROFESSIONAL CORPORATI ONS Mr. Samuel J. Chilk Page Two February 28, 1985 these instances have been insufficient to alter the valid perception that the NRC's enforcement policy still is too often applied in an unduly adversarial manner. We believe this hinders rather than advances the Commission's goals. The detection and reporting of violations is in nearly every instance an action of the licensee. Most, if not all utilities, have a superb record of reporting promptly any detected violations or suspected violations of requirements, and of making every effort to take timely appropriate

• corrective action. This candor is inconsistent with the NRC's adversarial approach which threatens, in the long run, to undermine it. An inappropriate zeal for fault-finding by the NRC, in the final analysis, will discourage such candor, deny the NRC timely information, and lead to a perception that the NRC is unable to discern the difference between excellence and perfection. One utility, in pointing out that the enforcement policy "does not encourage, motivate, inspire, support or reward operators to do a better job," added that the relationship which the NRC has established r with its licensees is markedly different from the policies utilized in other countries, such as France and Japan, which are repeatedly held up by the NRC as examples of good performance .

• Moreover, NRC's publicity concerning the fines it imposes appears almost calculated to persuade the public that there has been some deliberate failure to attend to the public safety in appropriate fashion. Rarely, if ever, does the NRC acknowledge that the so-called violation was detected and reported by the offending licensee.

This may enhance the NRC's image as a tough regulator.

But it surely leads to a misunderstanding by the public of the integrity and care with which licensees and their employees operate their plants and achieve the nuclear industry's fine safety record.

II. Responses to Specific Questions A. Under what circumstances, if any, should the NRC impose sanctions directly on individuals responsible for violations?

For a number of reasons, we strongly believe

SHAW, PITTMAN, POTTS & TROWBRIDGE A PARTNERSHIP OF" PROF"ESSIONAL CORPORATIONS Mr. Samuel J. Chilk Page Three February 28, 1985 the NRC should not consider imposing sanctions--civil or criminal--directly on individual employees of licensees, except in the most egregious circumstances:

1. It is entirely appropriate for the NRC to hold its licensees responsible for compliance with all applicable requirements. It is the licensee, and its management, which have the greatest incentive to assure proper operation, maintenance and safeguarding of its nuclear facilities. It therefore must recruit, train, and manage its employees to obtain their best possible performance.

Sanctions on individual employees could be perceived as excusing management responsibility.

2. The industry must continue to attract and retain capable and highly motivated personnel.

The specter of a governmental entity publicly levelling accusations against individuals, with whose conduct it may disagree, can only provide a disincentive to such persons from entering and remaining in the industry. Few other industries expose their personnel to such potentially morale-shaking challenges.

Within the utility industry, personnel engaged in non-nuclear activities generally don't

• 3.

face such pressures .

The potential of such sanctions would operate at cross-purposes with NRC's and licensees management's need to know promptly of any performance which may be inconsistent with regulatory requirements. Would the possibility of such sanctions improve the industry's fine record of detecting and reporting such violations to the NRC? We doubt it.

B. What has been the effect of regionalization on the enforcement program and its implementation?

Conceptually, regionalization has within it the potential for uneven application of the NRC's

SHAW , PITTMAN , POTTS & TROWBRIDGE A PARTNERSHIP OF PROFESSIONAL CORPORATIONS Mr. Samuel J. Chilk Page Four February 28, 1985 enforcement policies. And, arguably, this has been manifest in a few circumstances. Nevertheless, we are not aware of any significant evidence that regionalization itself is disrupting fair application of the agency's enforcement policies.

C. Does the present system identify root causes of violations so that effective corrective actions can be taken? Are lessons learned effectively promulgated to the industry and, if so, by what means?

This, of course, is or should be the central question in any review of the Commission's en-forcement policies. For quite some time NRC has often asked its licensees to determine the root causes of alleged violations. Nevertheless, it is not clear that a system rooted in adversarial charges, backed by civil and criminal penalties, will better identify root causes of violations than would a system based on mutual respect and professional cooperation. Indeed, elsewhere, e.g., in aircraft accident investigations, official inquiries into such events are not permitted by law to be used in civil litigation, in order to obtain maximum cooperation in such inquiries. See 49 USC §144l(e)

While NRC, as noted, often asks licensees to identify root causes of license violations, the agency itself rarely does more than determine whether the licensee .'s effort was apparently sufficient, unless the matter involves a functional failure or a precursor to a safety issue in which case the Office of Analysis and Evaluation of Operational Data may determine the generic implications, if any. It would probably be helpful if NRC were to annually review and assemble the root causes of other license violations and publish its analyses in a manner calculated to alert all licensees to such root causes in order to encourage better overall compliance with requirements.

SHAW , PITTMAN, POTTS & TROWBRIDGE A PARTN ERSH I P OF PROFESSIONAL CORPORAT I ONS Mr. Samuel J. Chilk Page Five February 28, 1985 D. Should the NRC consider increasing its reliance for compliance on licensee self-identification or evaluations of third parties?

Yes. We have elsewhere endorsed the concept of NRC designated representatives within licensee and contractor organizations to monitor and approve quality assurance practices. This would enable the NRC to rely upon a larger number of qualified individuals to assist it in assuring compliance with its regulations and it would build the cooperative ties necessary to assure joint responsibility to maintain nuclear plants in compliance with applicable laws and regulations.

III. Conclusion We are pleased that the Commission has asked the Advisory Committee to review its enforcement policy.

We hope that our views herein and in the attached letter of June 1, 1984, will be helpful to the Committee in its deliberations.

Enclosure

P.O. BOX 33189 CHARLOTTE, N .G. 28242 HAL B. TUGKER TELEPHONE Vl C E PRESIDENT (704) 3 7 3 - 4 ~1 NUC LEAR PRODUCTION February 27, 1985

• as 11 -1 P2 :ss Mr. Samuel J. Chilk, Secretary U. S. Nuclear Regulatory Commission Washington, D. C. 20555 Attention: Docketing and Service Branch

Subject:

Duke Power Company Comments on The Ad Hoc Advisory Committee For Review of Enforcement Policy

Dear Mr. Chilk:

In the Federal Register, January 9, 1985, the Nuclear Regulatory Commission's Ad Hoc Advisory Committee for Review of Enforcement Policy requested public comments on NRC enforcement practices and procedures. Duke Power Company has reviewed the Federal Register notice and is pleased to provide the following comments.

First, the Committee invited public comment on the effect, if any , that the enforcement policy has had on:

The prompt detection and correction of violations by licensees; The prompt detection and correction of violations by licensees is best accomplished by assuring the facility has a very knowledgeable staff which places plant safety above all other operational consid-rations. When the station's staff detects safety problems and these are then promptly converted by the NRC into violations, or more severe sanctions, then the station's staff is not encouraged to seek out additional problems. The proposed enforcement policy does not go far enough to use the regulatory process as a means of constructive interface between the utility and the regulator to maximize the safety and reliability of the plant.

The prompt reporting of violations by licensees; When station problems are promptly reported, the NRC's current policy routinely converts these reports into written violations, escalated enforcement actions, poor SALP r eviews, enforcement conferences, and other actions which are clearly punitive in nature. We feel this could, in time, actually hinder prompt reporting.

For items identified by the licensee , the NRC should view the se as a positive input to the re gulatory process and not proceed with an enforcement action. Minimally, this should be true for first time violations without regard to severity level.

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Mr. Samuel J. Chilk, Secretary February 27, 1985 Page Two The prevention of violations by licensees; The prevention of violations can best be accomplished by having a highly qualified and motivated station staff that perceives the regulatory process as contributing to the safety of plant operations.

However, the current NRC enforcement policy is perceived to be only punitive in nature, discouraging good performers from trying to improve and encouraging poor performers to become even more defensive in their relationship with the NRC.

The safety record of licensees; Duke Power views the regulatory process in general as contributing to plant safety, a common goal shared by the NRC and utilities. The enforcement policy is only one element of an effective regulatory program, an element which often promotes a negative and adversarial interface between the industry and the NRC.

The morale of licensees and their employees; The current NRC enforcement policy is felt to have a negative effect on the morale of licensees and their employees. We based this opinion on observations and feedback from our own employees.

The negative effects of civil penalties and the publicity which follows, often continuing months after a violation was initially issued, does effect employees on a personal basis.

The public confidence in the Commission's enforcement program; The large number of civil penalties which have been issued to the industry tends to destroy the public's condidence in the ability of licensees to safely operate their plants and the NRC's ability to accomplish its regulatory function. When notices of violation and/or civil penalties appear in the media frequently, the public perception is exceptionally bad. This is despite the fact that the majority of civil penalties levied are based on events identified by the licensees.

The willingness of workers and members of the public to report alleged violations; This question is also related to the item answered above concerning the prompt reporting of violations by licnesees.

Although we have no quantitative evidence, it is unlikely that a negative enforcement policy will promote a willingness among workers - the most knowledgeable source of information for the NRC - to report alleged violations. This is especially true when a worker knows that a possible violation may result in a civil penalty and adverse media coverage for his or her utility.

• Mr. Samuel J. Chilk, Secretary February 27, 1985 Page Three Secondly, the Committee invited comments on the effect, positive or negative, of the following features of the NRC's enforcement policy.

Upward and downward adjustment of base civil penalties; Extenuating circumstances and mitigating factors - particularly if a violation item is identified by the licensee - should be considered in all enforcement situations; for all violations in all severity levels. More importantly, no civil penalties should be assessed at all when a licensee has initiated corrective action which is determined by the NRC Staff to be sufficient.

Classification of violations by Severity level; We agree with the concept of classifying items into Severity Levels based upon the identified impact on plant safety. However, we feel there is inconsistency in the application of the criteria for classifying violations by Severity Level. This inconsistency will be seen in applications made by individual NRC personnel as well as between the I&E Regions (See a related comment on the effects of regionalization which follows).

Relative emphasis on negative and positive incentives; Incentives contained in the current NRC enforcement policy are viewed as mostly negative in nature. Two items we feel should receive positive emphasis in the NRC's future enforcement policy are the mitigating effects of licensee initiated corrective action and the fact that most items leading to enforcement action are discovered and reported by the licnesees themselves. Based on Duke's experience, the current enforcement policy does not give the utility sufficient credit for timely self-initiated corrective actions. For example, the NRC's decision process on whether or not to issue a civil penalty should consider the corrective action steps taken by the licensee. These steps could have already been completed long before the NRC's time of decision.

Progressive escalation of enforcement sanctions; We are generally in agreement with the practice of escalated enforcement sanctions provided the previously mentioned points regarding consistent classification of Severity Level, and the mitigating effects of licensee self-identification of violation items are considered.

Enforcement procedures such as enforcement conferences, publicity policy, etc.;

Duke Power feels that enforcement conferences provide an opportunity for the NRC and the utility to discuss an incident which may lead to

Mr. Samuel J. Chilk, Secretary February 27, 1985 Page Four a violation and an enforcement action. At such a conference, we as the licensee, are provided an opportunity to discuss an incident in question, the sequence of events which led to it, the actions taken to mitigate the event, and the corrective actions which have been or will be taken to prevent recurrence of similar events in . the future. Also, any questions which NRC staff members may have are discussed. In short, the enforcement conference serves as a useful forum for an exchange of information and viewpoints between the licensee and the NRC staff relating to a specific incident which might lead to a notice of violation and a proposed imposition of a civil penalty. As such, Duke Power sees the enforcement conferences as one of the positive elements of the existing enforcement policy.

We have the following comments on the NRC's publicity policy. First, timing is an important consideration. The NRC should consider the corrective actions taken by the licensee and all mitigating factors identified by the licensee prior to issuing a press release. Utility licensees should be provided advance notice of a forthcoming press release, as we understand is currently the policy in some regional offices. Secondly, the NRC should recognize the nature of the utility licensee and the importance of its public image. The NRC should consider the negative impact that adverse media coverage has on the utility while adding little benefit to the regulatory process or plant safety.

The NRC press releases should emphasize utility initiatives taken on the subject incident and where warranted contain positive statements as well.

Additionally, the Committee requested comments on the following questions.

Under what circumstances, if any, should the NRC impose sanctions directly on individuals responsible for violations?

Individual sanctions should be used only in cases of flagrant violation of NRC regulations and only as permitted by law. Sanctions should be limited to responsible company officials and NRC licensed persons.

These sanctions should not replace the normal managerial functions of a company as it relates to personnel matters.

What has been the effect of regionalization on the enforcement program and its implementation?

Regionalization has allowed individual interpretation of NRC regulations by the regional staffs which has resulted in unwarranted and inconsistent imposition of citations; an obvious side effect of the move to regionalization. Also, some regions are perceived as being more agressive, relative to enforcement policy, than others. There could be some overall improvement in the understanding of station incidents since the regions are more closely identified with an individual company.

Mr. Samuel J. Chilk, Secretary February 27, 1985 Page Five Does the present system identify root causes of violations so . that effective corrective actions can be taken? Are lessons learned effectively promulgated to the industry and, if so, by what means?

The present system does not necessarily identify root causes of violations in order that effective corrective actions can be taken. The current enforcement policy could increase the identification of root causes by promoting and encouraging a cooperative atmosphere between the NRC and the utility. This could be done through the day to day interface of utility/NRC personnel and the positive benefit that can be gained from enforcement conferences, as we discussed above. There is a feeling among utilities that no credit is given for self initiated corrective actions in the current enforcement policy and this atmosphere tends to reduce the identification of root causes. The sharing of information and lessons learned through the enforcement process is considered to be satisfactory both from the NRC communications and through industry organizations as well.

Should the NRC consider increasing its reliance for compliance on licensee self-identification or evaluations of third parties?

The NRC should increase its reliance for compliance on licensee self - identification and not by third party. The elimination of civil penalties for licensee identified enforcement items is an obvious means of promoting self-identification. Third party evaluations should ideally be limited to INPO. We recognize, due to resource limitations, that the NRC must rely on contractors to perform some evaluations from time to time. In these situations, the NRC should be aware of these organizations inexperience with regulatory and licensee programs.

In any case, all responsibility for decisions on enforcement items

• should remain totally within the NRC

• Duke Power would like to commend the NRC on the establishment of the Ad Hoc Advisory Committee. As we had previously commented, we feel a study of this nature is beneficial to the entire industry. Also, we were pleased to see that progress is being made on many of the important concerns identified by the industry on the NRC's enforcement policy. Hopefully, the NRC will move toward resolution of these items in the near future. In conclusion, we are optimistic that the long term enforcement policy adopted by the NRC will provide a positive influence on the industry. An effective and positive enforcement policy which encourages an active interchange between the utility and the NRC will be helpful in our efforts to assure the safe and reliable operation of our nuclear power plants.

Very truly yours, JSW:slb

• as CHARLES CENTER

• P. O. BOX 1475

• BALTIMORE, MARYLAND 21203 n:

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MANAGER NUCLEAR POWER D EPART MENT February 27' 1985 IR.1,lcJtR0c/

Secretary of the Commission U. S . Nuclear Re gulatory Commission Washington, DC 20555 ATTENTION : Docketing and Service Branch

• SUBJECT : Response t o Ad Hoc Advisory Committee For Review of Enforcement Policy; Re quest for Written Comme nts (50 FR 1142; January 9, 198 5)

C-entl eme n:

Baltimore Gas and Electric Company appreciates t he opportunity t o comment further regarding the Ad Hoc Committee ' s examination of e xist i ng NRC regulations related t o En forcement Policy . While our Company commented directly t o t he Agency ' s earlier proposed policy in May 1984, our Company s ubmits t hese additional comments for your Committee's consideration . We are also i n basic agreement with more detailed comments being submitt e d by Bis hop , Li berman , Cook, Purce ll & Reynolds .

We agree t hat t his aspect of NRC Regulation warrants critical

• examinat ion . As will become apparent from ow~ responses t o your specific questions, we firmly be lieve t hat t he existing policy, wit h i t s emphasis on punit ive fines, needs revision.

The Company ' s responses t o t he series of questions liste d i n t he Federal Register notice are as follows:

'lhe Effect that the Existing Policy has had on:

NO. 1: The prompt detection and correct ion of violations by licensee s .

RESPONSE : The existing Enforcement Policy has had littl e or no effect on the prompt detect ion and correct ion of violations by lice nsees .

Ot her means exist which have a far greater impact on detection and correction of violat ions including utilities ' own quality assurance programs and t he Systemat ic Assessment of Licensee Pe rfor mance (SALP) . An even more basic factor which is perhaps Mkftowfldged ~Gard **

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the greatest incentive of all for detection and correction of potential violations is the owner's concern for its substantial capital investment in plant and equipment and the protection of its own employees and reputation. The possibility of a serious accident at a nuclear power plant, as in the case of TMI, is likely to have such a devastating effect upon the licensee and its customer that the imposition of an enforcement penalty fades into insignificance by comparison .

NO. 2: The prompt reporting of violations by licensees.

RESPONSE: Because of the severe nature of the potential for imposition of civil penalties, the present rule inhibits rapid transmission of information between either Agency and licensee or between licensees. We would direct the Committee ' s attention to other regulated industries, such as that of airline transportation, for example, wherein the reporting of violations is actually

• NO. 3:

encouraged, in order that the regulated industry may benefit from easy and rapid dissemination of information . This is a far more effective means of achieving the ultimate goal of public health and safety than that of punitive civil penalties.

The prevention of violations by licensees .

RESPONSE : The present policy has little or no effect insofar as the pre-vention of violations is concerned . Once again, the mechanisms described in response to question number 1 above are far more effective .

NO . 4: The safety record of licensees .

RESPONSE : The enforcement policy has had little effect on our Company's safety record . It is at least arguable, however, that the existing enforcement policy has the potential for retarding a

• license ' s safety record on the same reasoning indicated in the response to number 2 above . If the measure of effective-ness is a reduction in the number of violations, a comparison to the pre-civil penalty period level of violations to the current level would likely indicate that the imposition of civil penalties does not accomplish the purposes of the policy.

Perhaps of greater significance towards improvement in this area are the establishment of the NRC's Resident Inspector Program and also the Institute of Nuclear Power Operations (INPO).

NO . 5: The morale of licensees and their employees .

RESPONSE : Logic would suggest th~t the imposition of a civil penalty will not improve morale . *-* 'Such actions tend to create antagonism between an employee and his fellow employees and between an employee and his employer/ company in general .

NO . 6: The public's confidence in the Commission's Enforcement Policy .

RESPONSE : The use of large civil penalties by the NRC does not promote public confidence in nuclear safety . To the contrary, because of the larger amounts and greater number of civil penalties, the public tends to conclude, erroneously, that the public safety is frequently in jeopardy because of the licensee ac-tivities . The irony of the situation is that the nuclear power industry has an outstanding safety record and poses less of a threat to the public safety than most other industries .

NO . 7: The willingness of workers and members of the public to support alleged violations.

RESPONSE: As has been indicated in responses to earlier questions, the existence of an enforcement policy which promotes large civil penalties has a "chilling" effect upon the willingness of plant workers to report alleged violations . Beyond the potential of monetary civil penalties, perhaps even more significant is the potential for adverse notoriety and media attention. In this respect, the current policy probably works at cross-purposes with its intended goal of enhancement of public safety . We believe that no enforcement action should be taken when a licensee discovers, reports and corrects a violation, regard-less of the severity level of the violation provided it is the first time such a violation has occurred.

The Policy Features To Which Said Effects Are Attributab1e NO . 1: Are the tables of civil penalty levels set at appropriate amounts?

RESPONSE : No . The penalty levels encourage civil penalties at a far higher level than is appropriate for the vast majority of violations .

In addition, the current policy tends to create an adversarial relationship between licensees and the NRC, and is perceived to be totally punitive. Such penalties are out of line with those levied by other government agencies. It is doubtful that t he more frequent and larger fines have increased nuclear safety to any noticeable extent. We recommend that for some areas of ac-tivity regulated by the Agency, such as reactor operations, there should be no violations categorized as Severity Level I .

NO . 2: Upward and downward adjustment of base civil penalties.

RESPONSE: The basic philosophy behind these principles, as with those cited in numbers 3, 5, and 6 below, is reasonable, provided the policy itself is applicable to fewer cases and that large penalties are imposed only in exceptional circumstances . Any positive effects of these principles, however, tend to become obscured in their overall application due to the high base levels in the existing

policy and the frequency with which they are used. It would make far more sense from an overall perspective to use these principles for determining whether any civil penalty should be imposed rather than the far more typical instances of the imposition of large and medium-range fines . The SALP appears to be more effective in im-proving long-term licensee performance and is far more effective for identifying degradation in a utility's performance in a pre-ventive way as opposed to enforcement after the fact. On the other hand, the SALP should not be utilized as a tool for enforce-ment purposes, as that would hinder the effective utilization of that program.

NO. 3: Clarification of violations by severity level.

RESPONSE: See response to number 2 above .

NO . 4: Policy on Material False Statements .

• RESPONSE: Our Company does not believe that the present policy regarding Material False Statements is effective for the enhancement of safety . In addition, it is of questionable legality in its application . The Atomic Energy Act, Section 186, cites Material False Statements as grounds for revocation of a license to oper-ate a commercial nuclear facility . In citing this sole example, the Act emphasizes the burden placed on the licensee for provid-ing precise and factual information to the Commission regarding nuclear facility operations. We are concerned that such an im-portant condition for maintaining a license currently escapes any clarifying guidance in the Code of Federal Regulations with regard to the type of communication that is considered subject to enforcement actions as Material False Statements . Incorporat-ing guidance into the Code of Federal Regulations specifying that only written communications under oath would be subject to the Material False Statement policy, appears on the surface to be

• one of the more direct means of clarifying the Commission's policy on this issue. However, the suggested threshold of written cor-respondence under oath would likely result in an excessive ad-ministrative burden on the licensee, since we anticipate that all such correspondence would probably require notarization by the Agency . Therefore, we endorse the requirement of a writing, but not that it be made under oath.

Of equal importance, however, is the recommendation that the Material False Statements'allegation be reserved only for more serious violations. In fact, this type of penalty should be utilized only when the alleged violator is guilty of having submitted false written information, with an actual intent to deceive and under circumstances where that intent is provable.

Obviously, this will tend to make this type of inference closely analogous to what is typically considered fraud in other legal contexts . Such a restrictive interpretation would limit the number of such cases significantly . That, however, would be a desirable result for at least two reasons. First of all, we

believe that this type of allegation was intended only for the most flagrant violations . Secondly, the stigma of having been accused and found responsible for a violation designated "material false statement" is calculated to have a devastating effect upon the career and/ or employability of any person associated with such a penalty . For these reasons, we firmly believe that this type of penalty should not be utilized in instances involving lack of foresight, innocent mistakes or even faulty judgment .

There are other aspects of the Enforcement Policy which can be utilized for such instances .

We offer the following examples which illustrate, in our opinion, those types of correspondence that should be exempt from the Commission's policy of Material False Statements:

1. Any written correspondence that involves topics other than public health and safety or nuclear safety should be exempt from the Commission's policy of Material False Statements .

2. Any written correspondence t hat, during the course of NRC review, does not result in an action by the Commission to effectively de-crease the margin of safety or increase the risk to the public health and safety, even though the correspondence may have had the potential to influence a NRC reviewer as a result of statements t herein,should be exempt from those provisions.

3. Clerical or typographical errors should also be exempt from the Commission's policy of Material False Statements .

• We recommend these clarifications because many examples may be cited where a licensee has committed to provide corrective actions or backfit modifications to satisfying issues prevalent at that time. However, changes resulting from the regulatory process have often obviated or upgraded the requirements for responding to the original issue (or in some cases new or conflicting issues have arisen) . Generally, the licensee will commit to new cor-rective actions as a result of these changing requirements .

Rarely, however, will the licensee review and retract incomplete or outdated commitments and provide justification for not imple-menting these commitments . To do so would represent a time con-suming and unproductive expenditure of resources . As an example ,

there has been a tendency for the NRC Regional Staff to review such correspondence and interpret, out of context, certain written statements we have provide d. Under duress and t he threat of being accused of having made a Material False Statement, we would be required to expend staff tin1e researching historic data in an attempt to reconstruct events as they were interpreted at the t ime said suspect correspondence was sent to the Commission .

Considering t he dynamics of the regulatory process and Industry response to this changing environment, if taken out of context ,

much of the historic record could fall suspect to Material False Statements .

Any regulation being applied to an operation for the purpose of controlling activities to an acceptable level of risk should be flexible enough to recognize the imperfections in those activities.

In this regard, we have proposed in subparagraphs 1 through 3 above, examples of written correspondence that should be exempt from the Commission's policy of Material False Statements . In doing so, we emphasize there is a reasonable and prudent limit to the amount of review that should be performe d by licensee managem nt to ensure written correspondence is accurate and factual with regard to clerical activities . Going beyond what is considered reasonable and prudent manage ment review, in order to guarantee that such correspondence is completely accurate, has the offsetting effect of expending lice nsee resources on trivial and counterproductive activities.

As indicated above, the two most significant changes which should be made regarding Material False Statements are that the False Statement be in writing, and that it had been made with intent to deceive . Incorporation of the foregoing considerations into Commission Policy will have a positive effect on the quality of communications bet ween the licensee and the Agency .

NO. 5: Relative emphasis on negative and positive incentives.

RESPO SE : See response to number 2 above . In addition, other kinds of positive incentives could be explore d, such as greater use of positive press releases for instances of good performance .

NO. 6: Progressive escalation of enforcement sanctions .

RESPONSE : See response to number 2 above . In addition, t he time period for recurrences of an event for purposes of escalation may be imposed over too long a period and may not be indicative of a licensee's present degree of culpability.

NO . 7: Enforcement procedures such as enforcement conferences, publicity policy, etc .

RESPONSE: Typically, an enforcement conference is held several months before a civil penalty is imposed. At these meetings, the licensee ' s in-tended corrective and preventive measures are normally sufficient to satisfy the Agency . Consequently, any civil penalty which follows serves little purpose other than that of punishment. The threat of a civil penalty is seldom required to compel such cor-rective and preventive commitments.

One of the most harmful aspects of NRC enforcement is that of media pressure which occurs upon publication of the notification to the utility that the imposition of a civil penalty may be forthcoming in response to a violation . The timing of these media events is significant because it captures public attention .

If, at a subsequent time, the Agency changes its position, by either withdrawing its enforcement action completely or through a significant reduction in the amount of the penalty to be im-pose d , such measures are frequently not publicized and the harm-ful result of the public announcement is all that remains .

NO. 8: Supplement 8 of the revised Enforcement Policy .

RESPONSE : There is nothing in Supplement 8 of benefit to NRC enforcement .

All items contained in that portion of the revised policy which are proper subjects of enforcement can be handled under other categories of the same policy . Its inclusion only tends to con-fuse matters.

Additi onal Questions NO . 1: Under what circumstances, if any, should the NRC impose sanctions directly on individuals responsible for violations ?

RESPONSE : The NRC should not impose sanctions on individuals unless criminal activities are involved .

NO . 2: What has been t he effect of regionalization on t he enforcement program and its implementation?

RESPONSE : Regionalization of the enforcement program has l e d to a diminished level of technical expertise available for investigation of problems .

In addition , there would appear to be some inconsistency between regions on policy and program implementation . The enf orcement pro-gram should be centralized at the I&E headquarters .

NO . 3: Does the present system identify root causes of violations so that eff ective corrective actions can be taken? Are l essons l earne d effectively promulgated to the industry and , if so, by what me ans?

RESPONSE: Because the licensee has such a short time for response to notice of a violation, root causes are often not found . In t he area of security, there is litt le dissemination of l essons learne d infor-mation regarding violations because it is safeguards information .

Othe rwise , IE Information Notices promulgate lessons l earned effectively . However, INPO appears to be the most effective means for dissemination of operating experi ence and recommendations .

NO . 4: Should t he NRC consider increasing its reliance for compliance on licensee self-identification or evaluations of t hir d parties?

RESPONSE: The NRC should increase i ts reliance for compliance on licensee self-identification and that of third parties such as INPO and NUMARC . Using organizations such as INPO to evaluate licensee programs encourages t hem to meet more than the mere standard of the r e gulation . In addition, the root cause of licensee problems is more l i kely to be ascertained t han under t he present policy which is too adversarial. Far better r esults would be obtained through a more cooperative NRC - industry relationship . The Commission should continue its willingness to support NUMARC initiatives.

Sunmary In conclusion, our Company believes t hat weaknesses in the present Enforcement Policy stem from the fact that there are too many enforcement actions, t hat too many result in civil penalties, that t he penalties impose d are too large, that t he Agency approach to media relations does serious

• damage to affected licensees, and t hat the existing policy for enforceme nt of Material False Stateme nts has t he potential for doing serious harm to innocent parties . If the principle goal of t he Enforcement Policy is the enhancement of public he alth and safety, and our Company be lieves t hat it is, t he foregoing weaknesses in NRC enforcement must be corrected .

Very truly yours,

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Secretary of the Commission

u. S. Nuclear Regulatory Commission Washington, DC 20555 Attn: Docketing and Service Branch

SUBJECT:

Comments on the Advisory Committee for Review of Enforcement Policy *

• I send these comments to you as a private citizen who has spent a great deal of time looking at effective enforcement and its relationship to the nuclear power industry.

Question 1: What effect does the Enforcement Policy have in prompt detection and correction of violations by licensee?

Response: The Enforcement Policy, particularly with its enlarged civil penalties, has had a negative effect on the detection and correction of violations by licensees in my opinion. What such a policy has done is make it an offense to have erred and because such an offense is reacted to with a violent penalty, individuals are less likely to report such offenses. In fact, because the penalty is imposed without regard to consequence or whether or not such act was done deliberately, the penalty tends only to be punitive in nature and a great barrier to the continuing health and safety of the general public being protected *

• Question 2: What effect has the Enforcement Policy had on the prompt reporting of violations by licensees?

Response: None whatsoever other than the suspicion on the part of any student of human nature that people will not promptly report anything that is going to bring down on them a major fine and lots of extremely bad publicity. The records of the actions taken by the NRC as published do not indicate any improvement whatsoever in the reporting of violations. If anything, they indicate that people are even more afraid to report. Whereas in the past, (when reporting did not involve major civil penalties), reasonable and decent communication lines could be kept open between the licensees and the Nuclear Regulatory Commission to keep them promptly informed of everything.

Question 3: What effect has the Enforcement Policy had on the prevention of violations by licensees?

Response: None whatsoever.

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Question 4: What effect, if any , has the Enforcement Policy had on the safety record of licensees?

Response: Looking at the measurable parameters of major events and significant personnel errors, it has had no effect whatsoever.

Question 5: What effect, if any, has the Enforcement Policy had on the moral of licensees and their employees.?

Response: It is ironic that perhaps the most important thing effecting the health and safety of the public living near nuclear plants, (the morale of the employees) is put fifth on this list. The Enforcement Policy has had a major impact in decreasing the morale and effectiveness of employees in nuclear power plants and also has had a major impact in decreasing in the margin of safety of the general public living around such plants.

When a driver is picked up for speeding, such speeding is by intent and the penalties are always scaled to reflect that. The person who slips over the line and goes one or two miles more per hour is given little if any penalty in any state. The person who by intent drives 15, 20, or 30 miles per hour above the speed limit is given a significant, punitive penalty to prevent reoccurrence of such event because it was done with intent. This lesson is lost on the Nuclear Regulatory Commission through its Enforcement Policy.

Fines are handed out indiscriminately and do not reflect the magnitude of the event. The response is always given that the Enforcement Policy says a certain size fine has to be given. The public confidence in the ability of the employees to handle the plant has been rapidly diminished by the NRC's new Enforcement Policy. The morale of employees has been greatly reduced because this gives people a tendancy not to spend their time looking for major safety issues, but rather to concentrate on ensuring that every minute regulation is followed so they personally will not be responsible for a fine to their employer. It is distracting and it is dangerous.

Question 6: What effect has the Enforcement Violation had on the publics confidence in the Commissions Enforcement Policy?

Response: The current Enforcement Policy with large fines has, of course, has greatly undermined the publics' confidence. While interveners and anti-nuclear groups love it because it is anti-nucleir in nature, the general public feels that where there is smoke there is fire. They are used to seeing civil penalties in the range of $1,000 or $2,000 for major issues. Crimes for relatively major white collar felonies seldom generate a fine of over $5,000

• to $10,000, yet the Nuclear Regualtory Commission starts with $40,000 fines.

Therefore, the public feels that these incidents are serious, however minor or major they may actually be or major in significance. Each time the Nuclear Regulatory Commission levies another big fine, the public confidence in the safety of the plants and in the NRC's ability to enforce the rules (which should be done without fines altogether) is greatly reduced.

Question 7: What, in fact, has the Enforcement Policy had on the willingness of workers and members of the public to report alleged violations?

WPl.2.31 Response: It is like a glass of cold water has been thrown over both sides.

Members of the public who live near a plant know that the report of a violation generates a fine which they pay through their electric rates therefore, they are much less likely to report a violation. After all, who wants to pay a fine which goes to a treasury in Washington, DC rather than to promote nuclear safety. The employees, frightened to death that this may cost them their job, have a greatly reduced willingness to be involved in such matters. The old spirit of look for everything wrong and tell it all to the Nuclear Regulatory Commission is rapidly being diminished in American nuclear plants.

The future of the Enforcement Policy, which has had these negative effects, is of course the civil penalties. In this connection, a committee particularly invites comments relating to the following features on the Enforcement Policy.

1. The tables of civil penalties set at the appropriate amounts. Answer: Of course not. They are incredably large. They were set solely to stop intentional, deliberate violations (avoiding shutting a plant down to fix something) and because they do not reflect the size of a nuclear plant, they are grossly punitive in nature on small plants and appropriate only on the largest generating facilities.

2. Upward and downward adjustment of base civil penalties. Answer: By the time you adjust a base civil penalty down, the damage is already done because the public and the people working in the plants only react to the initial massive fine.

3. Classification of Violations by Severity Level. Anwser: The NRC staff is incapable of classifying violations accurately by Severity Level. Very minor things receive very high severity level citations.

4. Policy of material false statements. Response: This policy leaves a great deal to be desired. The implication is that the party is guilty unless they can prove that such statement was not made through any intent or ignorance. This policy is weak in that it does not differentiate between unintentional errors (frequently of a minor magnitude) and deliberate misleading of the Nuclear Regulatory Commission.

S. Relative emphasis on negative and positive incentives. Response: The emphasis on positive incentives is so small that most people are unaware that it exists.

6. Progressive escalation of enforcement sanctions. Response: This is totally useless unless fines are totally eliminated or unless there is a deliberate intent to violate the rules to begin with.

7. Enforcement procedures such as Enforcement Publicity Policy, etc. Answer:

Your current publicity policy negates the positive benefits of everything else. By running to the press and that implying something major in the way of an error has occurred in a nuclear plant with a large accompanying civil penalty, any extreme positive benefit of the enforcement conference is almost completely wiped out.

WPl.2.31 The third section of questions. In addition, comments are requested.

1. Under what circumstances, if any, should the NRC impose sanctions directly to individuals responsible for violations.

Never, unless it can be proved first, that the violation was willful and done by deliberate intent to compromise the health and safety of the public and second, none unless it can be proved that the individual directly violated direct supervisor requests not to conduct such an action.

2. What has been the effect of regionalization in the Enforcement Program and its implementation?

None, other than the fact that there is a diversity in the response in both civil penalties and actions to the same event.

3. Does the present system identify root causes of violations so that effective corrective actions can be taken?

Not particularly. The old system of much smaller civil penalties was quite effective in this area.

Are lessons learned effectively promulgated in the industry and if so by what means?

Lessons learned are printed in extremely lengthy documents. Fortunately, most NRC Resident Inspectors are very high quality and are capable of assisting the licensee in highlighting those things which have great significance. Licensee staffs read enormous volumes in which significant lessons learned are unfortunately all too buried within insignificant issues. The Bulletin, Notice and Circular action by the NRC, while too frequently used to be fully effective, is an effective means of alerting the industry to hardware problems which could cascade into other plants *

• 4. Should the NRC consider increasing its reliance for compliance on licensee self identification or evaluation of third parties?

Definately. It should not under any circumstances invite additional parties in. Third parties are simply additional layers of regulation. It should begin to rely more and more on licensees because, in fact, the highest probability of finding such situations rest with the licensee and responses to self identified licensee findings should under no circumstances contain any civil penalty whatsoever unless it was of a major magnitude and the original violation was performed intentionally.

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Secretary of the C o ~ &: .S£F< VIC' U.S. NUCLEAR REGULATORY c-.mshION Washington, DC 20555 * ., ..

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Attention: Docketing,, &* se::dy-\i..ce Branch

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Gentlemen:

RESPONSE TO NRC AD HOC ADVISORY COMMITTEE RELEASE NO. 85-3, DATED JANUARY 9, 1985 PUBLIC COMMENTS ON ENFORCEMENT POLICY I am employed by Wisconsin Electric Power Company, holding an SRO license on Point Beach Nuclear Plant Units 1 and 2. Prior to this I worked at Commonwealth Edison Company's Zion Station, also holding an SRO license on those units. I have a Bachelor of Science Degree in Mechanical Engineering from the University of Wisconsin-Milwaukee and am a Registered Professional Engineer in the State of Wisconsin. My experience in nuclear power exceeds 13 years.

The NRC should not undertake to impose sanctions directly upon individuals responsible for violations. First, such definition can be difficult, if not impossible, to define. Because of this difficulty, the cost may exceed the value of any gain.

Most importantly, however, would be the negative impact upon the morale of employees upon whom sanctions are imposed. The most important aspect of nuclear power plant operation is the positive attitude and dedication of employees. Further erosion of these aspects will have negative impacts upon plant operation. Employees may attempt to cover up acts rather than identify and correct such acts. This would result in reduced safety. I think future emphasis should be placed upon positive incentives rather than negative incentives.

As part of a positive incentive policy, the NRC should place more reliance upon licensee self-identification rather than third party or NRC identification. This will result in a reduction in the adversarial, us and them, concept which now exists between licensees and the NRC.

More reliance upon self-identification will promote the attitude within the licensee's organization that they are doing evaluation, self-inspection, etc., for their own good, as opposed to the negative attitude that they are meeting a regulator's mandate.

Thank you for the opportunity to submit these comments.

Very truly yours ~ J /J

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U. S. NUCLEAR EGUlATORY COMMJSSK:8 .

DOCKETING & SERVICE SECTION

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Ger11q1a Power Company 333 Piedmont Avenue Atlanta Georgia 30308 TelPpt-ionE 404 526 6724 ivla 11119 Andress Post Office Box 4545 Atlc111ta Georgia 30302 R. E. Conway Sf*r r v1Cf Prf it it Off ICE (}f SECRL !M~D-85-0078 OOCl\ ETING & SEIWIY! . N 8~ANCH 1413 February 19, 1985 Mr. Samuel J. Chilk, Secretary U. S. Nuclear Regulatory Commission Washington, 0. C. 20555

• ATTENTION:

SUBJECT:

Docketing and Service Branch Comments to Ad Hoc Advisory Committee for Review of Enforcement Policy; 50 Federal Register 1142; January 9, 1985 Gentlemen:

Georgi a Power Company (GPC) appreciates the opportunity to submit the following in response to the Committee's request for comments on the enforcement policy. GPC is co-owner and operator of the Edwin I. Hatch Nuc 1ear Pl ant Un its l and 2 ( NRC Docket Numbers 50-321 and 50-366), and co-owner and constructor of the Vogtle Electric Generating Plant Units 1 and 2 (NRC Docket Numbers 50-424 and 50-425). Upon completion of construction and receipt of operating licenses, GPC will al so be the so 1e operator of Plant Vogtle. GPC's experience in operating nuclear power plants dates back to 1974 when Unit 1 of Plant Hatch received an operating license. Thus, GPC has at least ten years of experience in dealing with the NRC regarding operating matters and even more experience in the design, licensing, and construction of nuclear power plants. Our relationship with the regulatory body has always been respectful, honest, and candid. It has been and will continue to be our policy to put nuclear safety first. It is in that context that these comments are offered.

I. Introduction The present enforcement policy is discouraging and does not promote a positive attitude toward nuclear safety. The current policy has helped foster a public perception that nuclear power is unsafe and that plants are not operated any safer today than at the time of the Three Mile Island accident (nearly six years ago). Many licensees feel that civil penalties are inevitable regardless of how well one maintains the highest standards of safety.

&tS1 NUCl.fAA R~fOIV COMMfSSIOB l>OCKETING &. SERVICE SECTION OFFICE OF THE SECRETARY Of THE COMMISSION

Georgia Power , \

Mr. Samuel J. Chilk, Secretary U. S. Nuclear Regulatory Commission February 19, 1985 Page Two We are encouraged that the enforcement policy is being reviewed by an independent committee and hope that the committee wi 11 understand and support the nuc 1ear utility industry I s concern with the enforcement policy. As with enforcement proceedings, review and comments on the enforcement policy itself have been an adversarial process between the NRC and the regulated industry. The concerns expressed herein have been expressed numerous times in the past few years, largely to no avail. It is our hope that an independent and unbiased committee will take a detached look at the enforcement policy and recognize the validity of our concerns.

I I. General Comments The stated purpose of the NRC enforcement program is to protect the health and safety of the public by:

Ensuring compliance with regulations and license conditions Obtaining prompt correction of violations Deterring future violations Encouraging improvement of licensee performance The committee should evaluate the enforcement policy's effectiveness in meeting these goals. These goals deal with either the correction of existing violations or the deterrence of future violations. These are desirable goals, which both NRC and the licensee share, and which should be the subject of the general regulatory process. However, the enforcement policy imposition of a notice of violation and civil penalty generally serves a punitive role, which is not the stated intent of the policy. Generally, punitive enforcement schemes are reserved for intentional or willful violations of the law, or for cases of gross disregard of the law. That has rarely, if ever, been the case with the penalties imposed under the NRC enforcement policy.

GPC submits that to effectively achieve the stated goals, more emphasis should be placed on cooperative regulation by NRC and less on adversarial enforcement mechanisms. Publicizing a particular violation may cause the particular licensee short-term discomfort, but the long-term cumulative effect of such publicity may be undeserved harm to the nuclear power industry's reputation and acceptability to the public.

Georgia Power , \

Mr. Samuel J. Chilk, Secretary U. S. Nuclear Regulatory Commission February 19, 1985 Page Three III. Effect of Current Enforcement Policy:

l. On the prompt detection and correction of violations:

In almost all incidents, detection, prompt or otherwise, is not the result of enforcement, but the initiation of enforcement.

We do not believe that the policy seriously affects promptness of corrective actions. In most instances, corrective action will expeditiously be taken due to the licensee's natural concern about the plant and its license. Certainly, in some instances, where follow-up actions are part of the correction process, the incentive of a reduced penalty may help spur on this process.

However, in actual practice we have found such penalty reduction to be difficult to achieve, thereby effectively negating the effect of this feature of the enforcement policy. We recommend instead that the enforcement policy utilize far fewer penalties for initial violations, and instead focus on penalties if the required correction is not implemented in a timely fashion.

2. The prompt reporting of violations by licensees:

Here, again, we do not believe that the enforcement po 1icy has affected our norma 1 practices of prompt reporting. In fact, GPC has not always been given adequate credit for prompt reporting, as is provided in the enforcement policy. We do believe that failure to report a violation, once the licensee is actually aware of it, is serious, and the enforcement policy should focus more directly on the failure or delay in reporting.

3. The prevention of violations by licensee:

The vast majority of violations are discrete events which may or may not reflect weaknesses in hindsight, but usually do not indicate weakness in the licensee's general resolve to avoid violations. To this extent, we believe the enforcement policy is particularly ineffective; yet that is one of its stated purposes.

On the other hand, once a general area of difficulty is identified, by a violation or otherwise, perhaps an enforcement policy can play a more useful role in dealing with repeat violations or inattentiveness to an area of concern.

Georgia Power , \

Mr. Samuel J. Chilk, Secretary U. S. Nuclear Regulatory Commission February 19, 1985 Page Four

4. The safety record of licensees:

We simply do not believe the enforcement policy has had any real effect on our safety record, or that of other licensees. The real incentives for a licensee to operate safely overwhelms the enforcement pol icy as an incentive. Both the investment that the nuclear facilities represent and the public scrutiny of almost anything done by the nuclear power industry are ample incentives to operate safety, as is our natura 1 concern for the safety of the public.

5. The morale of licensees and their employees:

In the totality of today's difficult and frustrating atmosphere of operating nuclear plants, it is difficult to say that the enforcement policy has a significant effect on morale, although in the last four years, dealing with the policy has been frustrating and mostly unsatisfactory. Perhaps the committee needs to consult psychologists on this matter, but we believe that most people, especially the highly motivated people generally working at nuclear plants, respond much better to positive reinforcement (which management tries to provide) than by the constant threat of a negative action, such as an enforcement penalty. In short, we may not be able to determine exactly what the effect of the enforcement policy is on morale, but we know it is not positive *

• 6. The public's confidence in the Commission's enforcement program:

This may be an area where the enforcement policy has an opposite effect from that desired. The public is not aware of the details or process of the enforcement policy. What they see are occasional reports of fines for licensee violations. The current enforcement policy results in far too many civil penalties, which ultimately are publicized. The public may feel good that a particular action is being taken, but after hearing about a large number of violations, as there has been in recent years, the ultimate impression is that the system is not working.

7. The willingness of workers and members of the public to report alleged violations:

With respect to workers, see our comments in l and 2 above. We do not believe the enforcement policy has any relevance to reporting of alleged violations by members of the public.

Georgia Power , \

Mr. Samuel J. Chilk, Secretary U. S. Nuclear Regulatory Commission February 19, 1985 Page Five IV. Particular Features of the Enforcement Policy

l. The table of civil penalty levels:

Since we do not agree with the current concept of generally imposing civil penalties, and since the numbers are more or less arbitrary and have effectively eliminated discretion, we do not concur with either the particular values in the table or the concept of the table. Furthermore, as applied, we do not believe the same base civil penalty should be applied to all supplements.

Clearly, violations in some areas have much different safety significance than in other areas.

2. Upward or downward adjustment of basic civil penalties:

In theory, this adjustment allows some desirable discretion in enforcement, especially in that a penalty could be eliminated under the circumstances indicated in the policy. In practice, our experience has shown that this adjustment process has not always been utilized in accordance with the purposes of the policy. In any case, we believe the focus is misplaced, as discussed above.

Once the notice of violation with civil penalty is issued and made public, the disincentive for the licensee to ask for such an adjustment is strong, since either success or failure will result in more publicity for an initial occurrence which has probably been forgotten by the public.

3. Classification of violations by severity level:

Certainly, it is important to have some method of distinguishing among severe violations, serious violations, and relatively inconsequential violations. The problem with the severity levels as now applied is that the description in the supplements of a particular severity level is applied to a situation with little independent reasoning. In some cases, although a given violation falls within the description of a particular level, the actual situation does not deserve to be assigned that level. Although the enforcement policy states that the severity levels are not controlling and that the level should be related to the significance of the event, in practice we believe that this has not always been the case.

Georgia Power , \

Mr. Samuel J. Chilk, Secretary U. S. Nuclear Regulatory Commission February 19, 1985 Page Six Furthermore, as noted above, equal severity levels for different supplements have different safety significance. Whether the concern is appropriate penalties or simply appropriate relative characterization, we believe some adjustment is necessary in the defined severity levels for the various activity areas.

4. Policy on material false statements:

Georgia Power Company has participated in extensive comments on the po 1icy regarding materi a1 fa 1se statements ( See comments in response to 47 Fed. Reg. 8583 (1984) submitted on June 1, 1984, by Shaw, Pittman, l"o'tts--gj" Trowbridge and by Bishop, Liberman, Cook, Purcell & Reynolds). We believe this is a serious area of concern and recommend that the Ad Hoc Advisory Committee review our detailed comments in this area. In general, our concerns in this area relate to what constitutes "material false statements." We believe that such statements should be limited to false statements made with intent to deceive which are cap ab 1e of affecting agency decision making.

5. Relative emphasis on negative & positive incentives By its very nature, an enforcement pol icy represents the "stick 11 rather than the 11 carrot 11 and, as such, is mostly concerned with negative incentives. The only positive incentives in the policy have to do with reducing a civil penalty once it has been imposed

• Perhaps one of the most glaring deficiencies in the enforcement policy is the lack of positive recognition for a good history of compliance by a utility. Since this policy, as well as all nuclear plant regulation, is concerned about long term safe operations, a policy which recognizes and credits the licensee with a history of superior performance would be beneficial.

6. Progressive escalation of enforcement sanctions:

Certainly, it seems appropriate to take action against licensees who do not learn from their mistakes. Whether or not civil penalties are sensible in the context of general regulation of nuclear operations, we can all agree that increased NRC involvement may be necessary for serious violations which are repeated . It should be noted, however, that very few times has the NRC found the escalation of sanctions to be necessary. We believe this is a reflection of the responsiveness of the licensees and of the remainder of the regulatory program in accomplishing its responsibilities.

Georgia Power <<\

Mr. Samuel J. Chilk, Secretary

u. S. Nuclear Regulatory Commission February 19, 1985 Page Seven

7. Enforcement procedures such as enforcement conferences and publicity policy:

We believe that enforcement conferences are useful and perhaps the preferred form of enforcement, provided that the agency comes to the conference with an open mind on the situation to be reviewed.

To the extent the enforcement conference is concerned with setting the severity level of the civil penalty, we feel that the true usefulness of the enforcement conference is diminished. The conference should instead focus on the causes of the violation with the objective of mutually and cooperatively working to eliminate the cause.

With regard to the publicity policy, we have already stated our concern that the cummulative effect of such a policy is to harm the industry as a whole rather than to promote safety at the plants.

v. Responses to Specific Questions

1. Under what circumstances, if any, should the NRC impose sanctions directly on individuals responsible for violations?

We do not believe that NRC has the authority under the Atomic Energy Act to impose civil penalties directly against unlicensed employees of licensees. Therefore, no sanctions should be imposed on employees in carrying out their work duties. Such a policy would chill the hiring and continued employment of capable and conscientious people who would rather not work under such a continued threat. Discipline of employees should remain the exclusive province of the licensee.

2. What has been the effect of regional ization on the enforcement program and its implementation?

We cannot discern any significant effect of the regionalization of enforcement. It seems to us that the Regional Office still takes its direction from the Office of Inspection & Enforcement in such matters.

3. Does the present system identify root causes of violations so that effective corrective actions can be taken? Are lessons learned effectively promulgated to the industry and, if so, by what means?

In the enforcement policy system, root causes are generally examined and discovered by the licensee, to the extent that there are 11 root causes 11

• However, that does not mean the enforcement

Georgia Power , \

Mr. Samuel J. Chilk, Secretary U. S. Nuclear Regulatory Commission February 19, 1985 Page Eight policy in its present form is a necessary precedent to a system of determining the causes of violations. The identification process could be an integral part of a more positive enforcement policy where the licensees and the NRC focus and cooperate on identification and correction of the cause of violations, rather than a punitive enforcement policy where the 1i censee and the NRC are adversaries.

We do not feel that lessons learned are effectively promulgated to the industry.

4. Shau 1d the NRC consider increasing its re 1i ance for comp 1i ance on licensee self-identification or evaluations of third parties?

Certainly, in order to identify specific violations as they occur, the NRC must rely on the individual licensee to a large extent, along with the NRC's own inspections. Insofar as improvement of the general level of compliance, industry wide efforts, such as the Institute of Nuclear Power Operations, may prove to be of great benefit in identifying general problems, evaluating plant operations, sharing information among the licensees, and developing improved training and procedures which wi 11 generally improve the operation of nuclear plants. This is an example of a more positive approach to compliance than through the present enforcement policy.

VI. Conclusion The main thrust of our comments is directed to the idea that enforcement and compliance should be mostly a cooperative effort between the regulator and the licensee, with adversary proceedings being limited to the most severe situations, or situations where cooperation breaks down. GPC believes the enforcement policy in its present form has caused the NRC to lose sight of the positive role it can play in contributing to safe nuclear generation. We hope that the comments and recommendations of the Ad Hoc Advisory Committee will reinstate balance in regulation of licensees by the NRC.

Respectfully submitted, SCR/LTG/mb f;ZJ

MICHAEL J STAPLEY, M.P.A., ACTING EXECUTIVE DI RECTOR February 19. 1985 -SS FEB 22 P2 :11 Off IC[ OF CfCRt. T r-< I OOCKE:TING & SER VICf Secretary of Conm1ss1on BRANCH .

U.S. Nuclear Regulatory Conm1ss1on Docketing and Service Branch 1717 "H" Street, N.W., Room 1121 Washington, D.C. 20555 Re : Comments on Policy and Procedure for Enforcement Actions. Ad Hoc Adv1sory Comm1ttee for Review of Enforcement Policy Request,

Dear S1r:

Federal Register Vol. 50 No. 6 We agree with the Comm1ssion's policy that self -

identification and reporting of violat1ons should be encouraged and that credit should be given for v1olations promptly identified, reported and corrected. Likewise, escalation should be used when corrective action is not prompt or only minimally acceptable or where the licensee has attempted to cover up a violation by false statements, or falsification of records, etc. This should tend to improve morale among the majority of licensee's who are making an effort to comply and should promote prompt detection, correction and reporting of violations .

We feel that the current definition of material false statement should remain in its present form and should not be limited to written statements under oath. A false statement should not be contingent upon safety significance or on actually influencing an agency reviewer.

When an individual wilfully violates a regulation, condition of a license, falsifies records or makes material false statements in order to cover up a violation of significant safety implication, sanctions should be imposed upon the individual.

s;tt*

Larry F.

Bureau nderson, Director Radiation Control AJP: cw KENNETH L. ALKEMA , DIRECTOR

• DIVISION OF ENVIRONMENTAL HEALTH 150 WEST NORTH TEMPLE

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THE STATE . OF WYOM ING ED HERSCHLER GOVERNOR

@epailmenl o/ 8n1ftitonmenlal 9l.ualily LAN D QUA LITY DI VISIO HERSCHLER BLDG . -THIRD FLOOR TELEPHONE 307-777-; 7 ,...6 f A11 ~ EYENNE. WYOMING 82002 122 WEST 25TH February

• 7, , 1985

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.j Samuel J . Chilk Secretary of the Commission Nuclear Regulatory Commission Washington, D. C. 20555

• Attention :

Dear Mr. Chilk:

Docketing and Service Branch Wyoming Department of Environmental Quality, the Land Quality Division (WDEQ/LQD) has reviewed the "Nuclear Regulatory Commission's Ad Hoc Advisory Committee for Review of Enforcement Policy ' s request for public comments . " We would like to respectfully submit comments on the following items .

(Part III)

2. What has been the effect of regionalization on the enforcement program and its implementation . "

The regional field office located in Denver , Colorado has been helpful to

• WDEQ/LQD . The close proximity of that office to Wyoming has allowed for coordination between the State of Wyoming and the NRC with regard to uranium mine sites in the State of Wyoming .

elimination of differing requirements on operators , increased During the past year joint meetings and inspections have been held with greater frequen c y than was possible prior to the opening of that office . This has resulted in agency efficiency , and a reduction of paper work .

....Al,,,'A;-.\()° '

3. "Does the present system identify root causes of violations effective corrective actions can be taken? Are lessons effectively promulgated to the industry and , if so , by what means?

The NRC apparently has the discretion to move t neir "restricted area boundaries" when tailings pond seepage is detected .

this procedure is recommended so that the amount of groundwater pollution is not significantly increased.

Care in following

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Page Two We thank you for the opportunity to provide input . Please feel free to contact our office if you have any questions regarding our comments.

Sincerely ,

~ti!~

Lyle D. Randen Administrator LDR : KMO/kv

R.

Advisory committee on Enforcement Policy.

U.S .N .R .C.

Washington, D.C *. 20555 Sirs:

Please Accept this letter as my comments on the e nforcement-* policy of the NRC.

l. 1 The NRC lolicy on Enforcement has no effectiveness. The NRC depends u on fines and stoppages as the ultimate weapon to enforce its policy. Only in P2:42 one or two cases at TMI has the Department of Justice been allowed to J>i.rqsue criminal prosecution. r "~

Fines are ineffective because the perpetrator does not pay the fine.The operator ~

or manager guilty of the violation does not pay the fine. The fine is passed ofi to ratepayers, stockholders, or taxpayers. the actual person who committed the action may not get any remedial action a.t all. In fa.ct at 'fi-II, the p'rson who enterred the control room and ordered the pumps to be throttled

• which aggrevated the accident is not even known. The ~RC leveled its fine and doesn't even appear concerned as to who the actual party that committed the act is. The guilty party is still proba'Blly in the employ of MEI' ED and active on the TMisland.

Stoppages are not paid for by the guilty party. The Pennsylvania Public utility Commisaon has just given Philadelphia Electric a rate increase (1-23-85) for replacement energy used while the Salem plant was out of commission due to errors of PECo mnagement and operation.

Having ratepayers pay for stoppages doesnot seem avery effective method to obtain compliance from the operating managemnt and operating staff *.

Therefore there are no effective controls for NRC to *..i implement its enforcement pl.icy.

2. The attitude of the NRC Staff and commissioners is a most important

.* consideration to the Nuclear Industry. The attitude of the Gommissioners is well displayed in the transcripts of the commission meetings of the restart of TMI#l. (Octobr 1981 thru Jan 26 , 1984.) The Union of Concerned Scientists News Release of June 19, 1984, details many instances of questionable, biased or misplaced interest mn the part of the Commissioners. In fact, the Commisioners appezr mare concerned with pubic reaction and company solvency than safety.

The attitude of the Staff is even more problemmatical. I am enclosing a letter' f~~m Freida Berryhill of Wilmington DE detailing some discourtesies heaped upon intervenors by the NRC staff.

2.

The attitudeof the Commissioners

. . , Staff and trial bozrds are a11* antagonistic to effectvie ~ interventnn These tt*

a . . same a itudes are also antagonistic and barrier to effective enforcement. There is no incentive for licensees to com 1 whe~ a) the.attitude of the staff' commissioners and hearing boards are all PY

?bviously biased toward the licensee and a ainst the * * .

in the Kemeney and pogovin Reports on the T~I acc"d nt intervenors. _Thi:; is documented 0 1 i e and the attitude has n yworsened as spelled out i th C0 . . *-

n e mmission Transcripts on the TMI restart J. . Even. assuming that th e NRC ha s proper enforcement tools and attitude,

• which it ovviously does not, the NRC does not havethe staff d

. an management to enforce policy effectively. These deficiencies include, but are not limited the foll~ng:

In a Report to The Congress in September, The General Accounting Office described

Management Weaknesses Affect Nuclear Regulatory Commission Efforts To Address

- ~fety Issues CoIIDllOn to Nuclear Power Plants" GAO/RCED 149 The record of nuclear power under the Nuclear Regulatory Commission over the past 10 years makes imperative a full-fledged Congressional review and investigation.

Numbers of well-informed observers have voiced the opinion that in embarking on promotion of nuclear power for electric generation, the wrong choice was made in the type of reactor in 1954.

The custom-made character of US commercial reactors has made a difficult if not impossible regulation of the industry by the NRC The siting of large scale reactors of untested design close to densely populated regions makes it impossible to evacuate the public in the event of a severe accident The cost of numbers of nuclear plants, in part to incorporate needed safety design following the lessons of the Three Mile Island accident, threatens massive rate increases to the detriment of rate payers and th~ business and industrial community .

. In spite of attempts to resolve safety engineering features of light-water reactors, schedules have slipped and the Advisory Committee oc Reactor Safeguards has question-ed the practice of allowing reactors to operate with unresolved safety proelems.

More and xoore scientific studies indicate that levels of radioactivity to which employees in nuclear plants and the neighboring public is exposed will result in intolerable health effects - increases in cancer, infant mortality and genetic damage.

At every stage in the nuclear fuel cycle, higher and higher levels of radioactive releases are reportedrirom the grc.YWing piles of uranium mill tailings to the frightening increase in low and intermediate nuclear wastes. With the stepped-up programs for procurement of nuclear weapons, the problem intensifies.

Despite attempts at reform, the list of license events at nuclear plants keeps increasing and even the heaviest fines fail to make management of nuclear operations take their responsibilities seriously. In the light of the fact that shut downs at reactors in Japan are only one-sixth the number of US shut downs for comparable reactors, clearly our nuclear reactors are not properly managed.

J.

Now I saa.11 try to answer those questions raised by the Committee.

1. Prompt detection and correction of violations.

using the undervoltage trip assembly failure at Salem as an example , I really do not believe that tthere has been any effect from the enforcement policy in developing promptness. The switches that failed had not been properly mantained in 10 years and they had given warming of failure several times in the proceeding months. I cannot see how anything in that situation can be characterized as promoting promptness. I think ~n that situation, the policy promoted sloth and procrastination.

Overall the enforcement po licy or lack of it promotes sloth and procrastination which are worsening.

2.Prompt reporting.

Prompt reporting also can be characterized as filled with sloth and procrastingtion.

Even worse, much of the reporting is not done as a violation but as some less

. gnificant factor. Only slowly does the NRC then reclassify, if necessary to a violation. Ma.ny deficiencis in the Limerick Inspection reports were first included as an open item and only after long review upgraded to a violation.

J.Prevention of violations.

This :I> r eally a joke . There is no such thing as attempting to prevent violations in the enforcement policy. Surely there is no incentive for the licensee or his subcon+/-ractors to prevent violations. There is almost 100% assurance that they, themselves will not :i:a,y the fine and that thefine will be mitigated by the staff.

4. Safety record?

TMI#2 and the Salem A'IWS are excellent examples of a lack of safety. The best safety record is at Ma.rble Hill. It's cancelled. The only safety record that is sure is the safety record of a cancelled plant .

• . Morale:

Who cares. ? The NRC will not enforce anything because it can't.

6.Pubic confidence:

Those in the industry that have to keep their jobs:lO{)fo Public at large: 0%

7. Willingness:

Who cares? The RC will not pursue and the union will help get you fired for opening your mouth.

Answers to NRc questions on Page ~2 of notice.

4.

Vival penalties are dumb because they are put upon the ratepayer, stockholder, I

or taxpa.yer, The management and the operator have no liabilitycnd therefore

mllt no reason to fear pen~lties.

Sanctions should always be placed against offending individuals unless a clear company policy exists that the act was inspired by company policy.

A statement from the individual that a particular manager caused his beltet' that an action was company policy shall be treated as a mitigating circumstance.

Regionalization has helped hide many violations from the public which does not have access to all the documentation in all *areas. Regionalization has been a means to keep information from the general public and it is working.

Root causes of any problem are ignored or hidden by the NRC, Licensee or anybody else who ca.res to hide anythi.ng. 1/4e still de not knew where the *Tubleline falsified materials went in nuclear power plants.

Licensees will identifj nothing unless forced by the NRC or a breakdown in equipment .

• Respectfully submitted,

I Union of Concerned Scientists NEWS RELEASE June 19, 1984

Contact:

Jane Se03al, (202} 296-5600 54 6-598 9 (home}

• SECRET TMI .MEETINGS TRANSCRIPTS SHCW THE NRC IGNORES ITS RESPONSIBILITY

'Ihe U.S. Nuclear Regulatory Commission continues to avoid nuclear plant safety issues in its effort to find a rationale for prompt restart approval for 'Ihree Mile Island Unit 1. Transcripts of secret NRC meetings on the

• pro?)sed 'IMI-1 restart indicate sane comnissioners fail to understand basic noclear plant operations or the legal issues before them, and some prefer to

. decide the issues before the facts are in. 'Ihe comnissioners appear unwilling to consider the impact of revelations of the past tv.0 years involving '!MI such as an operator-exan cheating scandal or criminal indictments for leak-rate test falsifications. 'Ibey don't consider whether the plant should restart, but

• when.

In the Union of O:>ncerned Scientists' view, the commissioners' efforts seem directed largely at avoiding substantive questions or potentially complicating factors and keeping such issues from µililic view. 'Ihe transcripts indicate comnission disdain for input from members of the public, althoU3h some input is recpired by law. 'Ihese problems emerge as patterns, not isolated instances.

"Instead of government t.mder the sunshine law, the commission provides goverrment in dark corners," said Ellyn R. Weiss, UCS general counsel. "Until now, our \\Qrk on this case has focu.sed largely on the competence and integrity of GPU Nuclear, 11 the utility that operates the plant. "But now we are forced to question the competence and integrity of the NRC.

26 Church Street* Cambridge , Massachusetts 02238

• 617-547- 5552 1346 Connect icut Avenue, NW

• Suite 1101

• Washington , DC 20036

• 202 -296-5600

IJ. S. NUCLEAR 'lEGVI ATO=?V r nMMI SSION DOCKET!~-*~ & srn.v* ~- - *r.N Off a~ (..,.,.;*

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C 3228 East Fairchild La Crosse, WI 54601 January 25, 1985 *as :a-7 P 1 :1 s Secretary of the Commission U. S. Nuclear Regulatory Commission Washington, DC 20558 Attention: Docketing and Service Branch

Dear Committee Members:

The following comments are in response to the request for written comments from the Ad Hoc Advisory Committee for review of Enforcement Policy, published in the January 9, 1985, Federal Register (FR Doc. 85- 654).

I am a nuclear power worker. Therefore, you may think I have a prejudiced view. It is true. On the other hand, I speak from knowledge and experience; I do not see how anyone not associated with the nuclear industry could answer your questions knowledgably.

I do not believe the enforcement policy has any effect on promptness of detection of violations and probably negligible effect on timing of correction of violations. If we detect a violation, we are going to correct it, no matter what the severity level. I do think that once a violation has been detected and determined to be reportable, the enforcement policy does lead to quicker reporting of the violation. However, whether a possible violation will be detected and reported to licensee management may be less likely with the current enforcement policy. I am not aware of any unreported reportable violations which have occurred since March 1982, but I have been involved in discussions of the same. From the standpoints of employee morale, workload, and plant improvements, it would be more advantageous to just fix some violations than report them to anybody.

The morale of the entire plant workforce goes down when a plant is fined. Tempers are higher, resentment of the NRC is stronger and less productive work is performed. Angry, resentful people can be more careless than normal.

The existence of the enforcement policy, itself, hurts morale. People sometimes feel they are working in a fishbowl, with the NRC just waiting for them to make a mistake. Some of the better operators have left the nuclear industry rather than work in such an atmosphere. There are so many rules, some of which have little or no importance, that the odds are someone is going to violate one of them unintentionally sooner or later.

~i,ycard.. .

U.I. NUCLEAR REGUlAfORY ~OMMfSSIQII DOCKETING & SERVICE SECTION OFFICE OF THE SECRET ARY OF THE COMMISSION Document Statistics

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Secretary of the Commission January 25, 1985 Page Two Does the enforcement program prevent violations?

Probably. More often the enforcement policy prevents activities from being accomplished than violations from being made. If there is any question about whether something can be done (and with the way Technical Specifications are written, questions do arise), the activity is generally not done rather than a violation risked. We would rather err on the side of caution than argue a violation later. Sometimes, though, not doing the activity, such as a PM, may result in adverse consequences. I do not believe, however, that the enforcement policy has affected the safety record of the industry, depending on your measure of safety record.

I do not feel monetary penalties should be set for unintentional violations. Since they are set, I agree that repeat violations should get stiffer fines, and fines should be mitigated depending on circumstances, including self-identification, prompt reporting and corrective action taken.

I strongly believe that fines should be set proportional to plant rated power level. A $100,000 fine has double the effect on a 500 MWe plant, than a 1000 MWe plant and twenty times the effect on a 50 MWe reactor. To be at all equitable, a fine for a specific violation should have equal impact no matter what size facility incurs it.

I definitely think the material false statement policy has had a negative effect. It makes people less likely to volunteer or provide information. Word engineering can become more important than engineering.

When that terminology has been thrown at us, generally it has been due to differences in word or phrase interpretation. Also, it does nothing to improve NRC licensee relationships. When/if the licensee makes an error, it is a "material false statement," but when the NRC errs, it either does not matter or we have to write another letter correcting their error .

• I think the present system identifies root causes of violations, if the licensee wants to identify them, and sometimes even when they do not. On the other hand, the NRC sometimes states something as being the cause of the violation, which in reality it is not. The licensee then has to spend the time arguing or take action on a misidentified "cause."

The INPO Network system does do a good job of disseminating information throughout the industry, though sometimes in such volume and in such manner as to decrease from optimum effectiveness.

While I would be willing to present my viewpoint to the committee, I am not eager.

Lynne S. Goodman LSG/lam

1142 Ad Hoc Advisory Committee for

• Deterring future noncom pliance: ;1nd Foll owing its review of the comments

• Encouragi113-improvement of licensee*, received the Committee may wish to Re\'lew of Enforcement Po:lcy; performance, and by example, that of Request for Written Comments have representative viewpoints induatry, including the prompt identification summarized orally to the Committee On March 3, 1982. the Nuclear and reportill8 of potential safety problems. 47 FR 9989 (March 2, 1982). during a public meeting. Commenters Regulatory Commission adopted a should indicate if they would be willing comprehensive sta teme:-; t of The Committee recognizes that to make such a presentation and. if so, enforcement policy. applica ble to comments were solicited on the revised indicate a person to contact concerning matters involving the public health and Enforcement Policy (49 FR 8583, March a possible presentation. If presentations safety, the common de frns e and 8, 1984) and has reviewed the comments are requested. the Committee may.

security, and the environmznt. 47 FR received in response to that request. depending upon the number of 9987 (March 9, 1982). The policy was Additionally and more particularly, the comments received and the number of based on an interim policy published on Committee now invites comments from persons expressing a willingness lo be October 7, 1980 (145 FR 66i 55J. The policy the public on the effect. if any. that the heard, ask several commenters lo statement specified criteria for the enforcement policy has had. on: consolidate their presentations.

issuance of notices of violation. 1. The prompt detection and Comments are due on or before imposition of civil penalties. and correction of violations by licensees; February 28, 1985. Comments received

2. The prompt reporting of violations issuance of orders with the principal after this date will be considered if it is criterion being the "severity" of the by licensees: *

3. The prevention of violations by practical to do so. Comments should be violation. The policy statement submitted to: Secretary of the licensees:

established five "severity levels", and Commission, U.S. Nuclear Regulatory

4. The safety record of licensees; provided guidance for classifying 5. The morale of licensees and their Commission. Washington, D.C. 20555, violations in each category. As a general employees: Attn: Docketing and Service Branch.

no sanctions were to be*imposed 6. The public's confidence in the Deliver comments to: Room 1121, 1717 H w-hazard violations (those classed Commission's enforcement program: and Street, NW, Washington, D.C. between erity. Levels IV or V). while more 7. The willingness of workers and 8:15 a.m. and 5:00 p.m. weekdays.

s violations (those in Severity members of the public to report alleged Copies of comments received may be Levels I-III) would be subject to the violations. examined at the NRC Public Document imposition of civil penalties and, in To the extent that the enforcement Room, 1717 H Street, NW, Washington, some cases, appropriate orders. The policy has had an appreciable effect, D.C.

policy statement presented a formula for positive or negative, to what particular For further information contact Karen establishing the "base civil penalty" for feature of the policy, if any, is that effect Cyr, Office of the Executive Legal violations, based on their severity level attributable? In this connection, the Director, U.S. Nuclear Regulatory and a ctivity category, and standards for Committee particularly invites Commission, Washington, D.C. 20555.

adjus ting base penalties for escalating comments relating to the following Telephone: (301) 492-7269.

or mitigating factors. features of the enforcement policy: Dated at Washifl8ton, DC this 3rd day of On March 2, 1984, the Commission 1. Are the tables of civil penalty levels January, 1985.

made several revisions to the set at appropriate amounts? John C. Hoyle, enforcement policy, including an 2. Upward and downward adjustment Advisory Committee. Management Officer.

increase in the base penalty (from of base civil penalties;

$80,000 to $100,000} for the most severe [FR Doc.85-654 Filed 1--8-85; 8:45 am]

3. Classification of violations by categories of violations and increases in IIIWNO CODE 7590-01_.

Severity Level; the percentages by which base amounts 4. Policy on material false statements:

may be adjusted. 49 FR 8583.(March 8, S. Relative emphasis on negative and

. The revised policy statement also positive incentives; ted an "in-depth study of the 6. Progressive escalation of

• rcement program" to be conducted enforcement sanctions; "by a small committee of individuals 7. Enforcement procedures sucli as from outside the agency to be selected enforcement conferences, publicity by the Commission." policy, etc: and On August 31, 19_84, (49 FR 35273, 8. Supplement 8 of the revised Sept. 6, 1984) the Commission enforcement policy.

established the AD Hoc Advisory In addition. comments are requested Committee for Review of the on the following questions:

Enforcement Policy to undertake this _ 1. Under what circumstances, if any, study. In aid of its undertaking, the

• should the NRC impose sanctions Committee is soliciting comments from directly on individuals responsible for interested persons on the extent to violations?

• which the NRC's enforcement policy has 2. What has been the effect of served the purpose announced by the regionalization on the enforcement Commission upon its promulgation. program and its implementation?

namely: 3. Does the present system identify to promote and protect the radiological health root causes of violations so that and safety of the public Including employees effective corrective actions can be health and safety. the common defense and taken? Are lessons learned effectively security, and the environment by: promulgated to the industry and, if so,

• Enauring compliance with NRC by wha1 means?

regulations and license conditions: 4. Should the NRC consider increasing

• Obtaining prompt correction of its reliance for compliance or licensee noncompliance; self-identification or evaluations of third parties?