[Federal Register Volume 59, Number 162 (Tuesday, August 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20618]


[[Page Unknown]]

[Federal Register: August 23, 1994]


                                                   VOL. 59, NO. 162

                                           Tuesday, August 23, 1994

NUCLEAR REGULATORY COMMISSION

10 CFR Part 2

 

Reexamination of the NRC Enforcement Policy

AGENCY: Nuclear Regulatory Commission.

ACTION: Proposed rule; Request for public comment.

-----------------------------------------------------------------------

SUMMARY: The Nuclear Regulatory Commission (NRC) is reexamining its 
enforcement program and requests public comment on whether the scope, 
purpose, procedures, and methods of its enforcement program are 
appropriate, and how they may be improved. The NRC is soliciting 
comments from interested public interest groups, the regulated 
industry, states, and concerned citizens. Comments from both reactor 
and materials licensees are requested. This request is intended to 
assist the NRC in a review of its enforcement program which is being 
conducted to make recommendations for improvements in the regulatory 
process.

DATES: The comment period expires October 24, 1994. Comments received 
after this date will be considered if it is practical to do so, but the 
Commission is able to assure consideration only for comments received 
on or before this date.

ADDRESSES: Submit written comments to: David Meyer, Chief, Rules Review 
and Directives Branch, Division of Freedom of Information and 
Publication Services, Office of Administration, Mail Stop: T6D59, U.S. 
Nuclear Regulatory Commission, Washington, DC 20555. Hand deliver 
comments to: 11555 Rockville Pike, Rockville, Maryland, between 7:45 am 
and 4:15 pm, Federal workdays. Copies of comments received may be 
examined at the NRC Public Document Room, 2120 L Street NW. (Lower 
Level), Washington, DC. After September 1, 1994, it is expected that 
comments may also be provided electronically by accessing the NRC 
bulletin board system (BBS) that is a subsystem of FedWorld, which is 
operated by the National Technical Information Service. The NRC BBS can 
be accessed directly by a toll free number, (800) 303-9672, at modem 
speeds up to 9600 Baud with communication parameters set at 8 data 
bits, no parity, 1 stop bit, full duplex, and ANSI terminal emulation. 
Select the ``Subsystems/Databases'' option from the ``NRC Main Menu'' 
and then the ``Enforcement Program'' option. The ``Help/Information 
Center'' from the ``Enforcement Program Menu'' provides selections on 
``Request for Comments on the Enforcement Policy'' and ``How to Leave 
an Official Comment.'' The NRC BBS can also be accessed from the 
FedWorld ``Subsystems/Databases'' menu, which could facilitate user 
access using the Internet. FedWorld's access via Internet is Telnet 
access: fedworld.gov (192.239.92.3); FTP site access: ftp.fedworld.gov 
(192.239.92.205), and World Wide Web (Home Page): www.fedworld.gov 
(this is the URL).

FOR FURTHER INFORMATION CONTACT: James Lieberman, Director, Office of 
Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555, 
(301) 504-2741. Questions on the NRC BBS may be directed to Tom Dunning 
at (301) 504-1189.

SUPPLEMENTARY INFORMATION: On May 13, 1994, the Executive Director for 
Operations directed a Review team composed of Senior NRC managers to 
reexamine the NRC enforcement program. The Review Team is chaired by 
James Lieberman, Director, Office of Enforcement, and includes James 
Fitzgerald, Acting Director, Office of Investigations, Roy Zimmerman, 
Associate Director for Projects, Office of Nuclear Reactor Regulations, 
William Brach, Deputy Division Director, Division of Industrial and 
Medical Nuclear Safety, Office of Nuclear Materials Safety and 
Safeguards, Luis Reyes, Deputy Administrator Region II, and Jack 
Goldberg, Deputy Assistant General Counsel for Enforcement.
    The purpose of this review effort is to (i) perform an assessment 
of the NRC's enforcement program to determine whether the defined 
purposes of the enforcement program are appropriate, (ii) determine 
whether the NRC's enforcement practices and procedures for issuing 
enforcement actions are consistent with those purposes, and (iii) 
provide recommendations on any changes the Review Team believes 
advisable. It is expected that the Review Team will complete its review 
and issue its report, including recommendations, by the end of January 
1995.
    The NRC's enforcement program is guided by the Commission's 
``General Statement of Policy and Procedure for NRC Enforcement 
Actions'' (Enforcement Policy). The Enforcement Policy is published in 
the Code of Federal Regulations at 10 CFR part 2, appendix C to provide 
widespread dissemination of the Commission's Enforcement Policy. 
However, it is a policy statement and not a regulation. The Enforcement 
Policy notes that the Commission, as appropriate under the circumstance 
of a particular case, can deviate from it.
    The Commission's Enforcement Policy was first published in 1980 as 
an interim policy. 45 FR 66754 (October 7, 1980). On March 9, 1982 (47 
FR 9987), the Commission published a final version of the policy. Since 
that time, the Enforcement Policy has been modified on a number of 
occasions to address changing requirements and additional experience. 
The current Enforcement Policy is reflected in the 1994 Code of Federal 
Regulations as supplemented by a July 15, 1994 (59 FR 36026), 
modification to provide additional severity level examples.
    Since the Enforcement Policy was first promulgated, the purpose and 
the four objectives for the NRC enforcement program have remained 
essentially unchanged. Section I of the Enforcement Policy states that:
    The purpose of the NRC enforcement program is to promote and 
protect the radiological health and safety of the public, including 
employees' health and safety, the common defense and security, and the 
environment by [the following four objectives]:
     Ensuring compliance with NRC regulations and license 
conditions;
     Obtaining prompt correction of violations and adverse 
quality conditions which may affect safety;
     Deterring future violations and occurrences of conditions 
adverse to quality; and
     Encouraging improvement of licensee and vendor 
performance, and by example, that of industry, including the prompt 
identification and reporting of potential safety problems.
    In summary, the Enforcement Policy provides for a graduated set of 
sanctions based on the severity of the violations. Normally, each 
violation or grouping of violations is categorized into one of five 
severity levels based on the relative importance of the violation, 
including both the technical significance, i.e. the actual and 
potential consequences, and the regulatory significance including any 
willfulness associated with the violation. Formal sanctions include 
Notices of Violations, civil penalties, and orders. In determining the 
particular sanction to be used, consideration is given to (i) the 
severity level of the violation, including its duration, (ii) the 
licensee's response to the violation, including whether the licensee 
identified the violation and corrected it, and (iii) the licensee's 
past performance, including whether the violation was a recurring one, 
the licensee's compliance history and general performance, and whether 
there were prior opportunities to discover, correct, or avoid the 
violation. The Enforcement Policy provides for the ability to exercise 
discretion to increase or reduce sanctions (including dispositioning 
certain violations as non-cited violations) to provide appropriate 
regulatory messages to encourage improved performance. Enforcement 
actions involving orders or violations at Severity Level I, II, or III 
are considered more significant and are referred to as escalated 
actions. In addition to formal enforcement sanctions, NRC also uses 
administrative actions such as Demands for Information, Confirmatory 
Action Letters, and Letters of Reprimand.
    In accordance with its charter, the Review Team, is to consider, 
but not be limited to, the following issues in conducting its 
assessment of the enforcement program:
    (i) The balance between providing deterrence and incentive (both 
positive and negative) for the identification and correction of 
violations,
    (ii) The appropriateness of NRC sanctions,
    (iii) Whether the Commission should seek statutory authority to 
increase the amount of civil penalties,1
---------------------------------------------------------------------------

    \1\In 1993, the Commission conducted a reassessment of the NRC's 
program for protecting allegers against retaliation. The Review Team 
which performed that reassessment recommended, among other things, 
that the NRC should seek an amendment to section 234 of the Atomic 
Energy Act of 1954 to increase the current maximum civil penalty of 
$100,000 to $500,000 per day per violation to be normally used for 
willful violations including those involving discrimination. 
Recommendation II.D-3, ``Reassessment of the NRC's Program for 
Protecting Allegers Against Retaliation,'' NUREG-1499 (January 
1994). The Commission did not act on this recommendation, but 
instead, the Commission approved a staff proposal to defer action on 
the recommendation pending a review of the NRC Enforcement Program.
---------------------------------------------------------------------------

    (iv) Whether there should be different enforcement policies and 
practices for material licensees in contrast to power reactors or large 
fuel facilities, and
    (v) Whether the Commission should establish open enforcement 
conferences as the normal practice.2
---------------------------------------------------------------------------

    \2\In 1992, the NRC established a two-year trial program for 
conducting enforcement conferences open to attendance by members of 
the public (57 FR 30762, July 10,1992). This trial program was to 
end July 11, 1994 upon which date comments were due on whether NRC 
should routinely conduct open enforcement conferences. However, in 
light of the reexamination of the enforcement program, the trial 
program was extended pending the outcome of the enforcement program 
review (59 FR 36796, July 19,1994).
---------------------------------------------------------------------------

    Public comments are sought on these issues to assist the Review 
Team in its reassessment. In addition to general comments on the above 
issues, the Review Team seeks comments on a number of specific issues.
    Comments are sought from both reactor and material licensees, 
vendors, other persons who are subject to NRC enforcement jurisdiction, 
state and local governments, and other members of the public who may 
have an interest in NRC enforcement actions. Although the Review Team 
is interested in as many comments as possible, commenters are not 
obligated to and need not address every issue.
    In providing comments, please key comments to the numbering system 
used to identify the specific issues by providing the issue number 
before the particular comment (e.g., Response to A.3). General or 
anecdotal comments (such as a general comment to the effect that some 
enforcement conferences have not been effective or that some 
enforcement cases have been inconsistent with the Enforcement Policy) 
will not be particularly useful. Rather comments should be as specific 
as possible and should reference specific cases, as appropriate, so 
that the Review Team can understand and evaluate the comment. Responses 
which call for a ``yes'' or ``no'' answer should be accompanied with an 
explanation as to why the commenter agrees or disagrees with the issue. 
When the term licensee is used in the issues listed below, it refers, 
as applicable, to licensees, vendors, and other persons subject to NRC 
enforcement actions.
    Comments may be provided in hard copy or through the NRC electronic 
bulletin board( BBS). Instructions for accessing the NRC BBS are 
provided in the ADDRESSES section above.
    Following evaluation of the comments, the Review Team may hold a 
public meeting in the Washington, D.C. area for the purpose of 
clarifying comments. In that regard, commenters are requested to 
indicate whether they would desire to participate in a public meeting. 
It is expected that the Review Team would invite specific commenters to 
participate on panels of commenters with similar views. If a meeting is 
to be held, it will be announced in the Federal Register and on the NRC 
BBS.
    Comments are requested on the following specific issues:

A. Purpose and Objectives of the NRC Enforcement Program

    1. Is the purpose of the enforcement program stated above the 
proper area of focus for the NRC enforcement program? If not, why not 
and what should the purpose be?
    2. Are the four objectives of the NRC enforcement program stated 
above (i.e., ensuring compliance, obtaining corrective action, 
deterring future violations, and encouraging improved performance of 
other licensees and vendors) appropriate? If not, why not and what 
should the objectives be?
    3. Does the enforcement program as implemented achieve the stated 
purpose and objectives? Explain why or why not.
    (a) Are enforcement sanctions effective in obtaining comprehensive 
and lasting corrective action, i.e., does the time and effort spent in 
developing responses to enforcement actions result in a more thought 
out approach for corrective action and implementation of that action 
than would otherwise occur?
    (b) Do some types of sanctions result in more extensive, 
comprehensive, or lasting corrective action than others?
    (i) If so, which types of sanctions are more effective than others, 
i.e., (a) Notices of Violation at Severity Level V, at Severity Level 
IV with and without a civil penalty, at Severity Level III with and 
without a civil penalty, at Severity Level II with and without a civil 
penalty, and at Severity Level I with and without a civil penalty, and 
(b) orders?
    (ii) If so, why? For example, do some sanctions get more management 
attention than others, i.e., do all senior licensee officials, such as 
the Vice Presidents, President, Chief Executive Officer or Board of 
Directors, get copies of every sanction including non-cited violations, 
or do senior officials only get copies of certain types of sanctions 
such as civil penalties or orders, or for that matter do they get 
copies at any time?
    (iii) If not, what changes could be made to improve corrective 
action?
    (c) Has the NRC's past use of sanctions created deterrence, i.e., 
does the threat of sanctions contribute to the desire to maintain 
compliance?
    (i) If not, what changes could be made to provide more deterrence?
    (ii) Commenters are requested to address the deterrence value of 
each type of sanction: (a) Notices of Violation at Severity Level V, at 
Severity Level IV with and without a civil penalty, at Severity Level 
III with and without a civil penalty, at Severity Level II with and 
without a civil penalty, and at Severity Level I with and without a 
civil penalty, and (b) orders.
    (iii) To what extent does the issuance of press releases contribute 
to the deterrence?
    (iv) Should press releases be issued for Notices of Violation, 
Confirmatory Action Letters, Demands for Information as well as civil 
penalties and orders? If not, why not?
    (d) Do NRC sanctions against particular licensees result in 
improving the general performance of the regulated industry by 
encouraging other licensees to take actions to prevent or identify and 
correct similar violations at their facilities after learning of the 
violations and sanctions imposed on other licensees?
    (i) Licensee commenters should address whether they are normally 
aware of enforcement actions issued against other licensees at the 
level of (1) non-escalated Notices of Violations, (2) escalated Notices 
of Violations without civil penalties, (3) civil penalties, and (4) 
orders.
    (ii) If commenters are aware of enforcement actions issued against 
other licensees, how do they become aware of them (e.g, NUREG 0940, 
``Enforcement Actions: Significant Actions Resolved,'' NRC Information 
Notices, NMSS Newsletters, press releases, law firm news letters, 
industry newsletters such as Inside NRC or Nucleonics Weekly, NRC 
inspectors, Federal Register, or other sources)? Should NRC consider 
better ways to provide licensees and vendors with information about NRC 
enforcement actions such as use of an electronic bulletin board or an 
enforcement newsletter?
    (iii) If commenters are aware of enforcement actions issued against 
other licensees, is the information from those actions used to improve 
performance? How is it used to achieve better performance (e.g., 
discussed during staff meetings, incorporated into training, or made 
the subject of required reading)?
    4. Agency-wide (i.e., from region to region) consistency and 
predictability in the nature and type of sanctions have been important 
considerations in developing enforcement sanctions. As a result, the 
Enforcement Policy has become substantially more detailed since the 
initial policy was published in 1980. While flexibility is provided, 
deviations from the norms of the Enforcement Policy require approval or 
consultation with senior NRC officials, and in some cases, the 
Commissioners.
    (a) If the enforcement program as implemented does not provide an 
appropriate degree of consistency and predictability, what are the 
problem areas and what changes could be made for improvement in this 
area?
    (b) Should the Enforcement Policy be simplified and allow for more 
staff judgement and issuance of enforcement actions with less 
management review? If so, provide examples where changes could be made. 
If so, why and how?
    5. When developing enforcement sanctions, how should the NRC 
attempt to balance punishment and incentives? [Note: this question 
addresses issuance of sanctions in general, questions on issuance of 
civil penalties are addressed in section E. of this notice.] Comments 
are requested on whether the remedial value of enforcement would be 
improved by:
    (a) Basing sanctions solely on the occurrence of the violation and 
its technical and regulatory significance to maximize the incentive to 
discourage violations from occurring. Under this approach, in 
formulating a sanction, NRC would consider whether the violation 
occurred, but would not consider whether the licensee identified the 
violation and corrected it and would not consider the licensee's past 
performance, i.e., some or all sanctions would be issued somewhat like 
a traffic ticket. For example, an overexposure would have a fixed 
penalty for a given type of licensee. Commenters who favor this 
approach should address the question of whether this approach would 
tend to discourage licensees and employees from identifying violations 
that are not self disclosing and broadly correcting violations as those 
actions would not affect the sanction.
    (b) Basing sanctions solely on the licensee's response to the 
violation. Under this approach, NRC would not issue a sanction if the 
licensee promptly identified, reported it if required, and promptly and 
comprehensively corrected the violation; that is the NRC would not 
consider past performance, duration, multiple occurrences, prior 
opportunities to identify and correct the violation earlier if the 
licensee identified and corrected the violation prior to NRC 
identifying the violation, the NRC scheduling an announced inspection 
in the area that encompasses the violation, or an event that disclosed 
the violation. Commenters who favor this approach should address the 
question of whether this approach would reduce the incentives to 
identify violations, including responding to opportunities to identify 
potential violations, or assuring lasting corrective action because the 
licensee may take the risk that NRC might not identify the violation as 
a result of the limited, audit nature of the NRC inspection program. 
How should reporting of a violation be considered? For example, should 
full mitigation be allowed if a violation was not reported?
    (c) Basing sanctions on a combination of approaches (a) and (b) 
above, similar to the current NRC approach. Commenters who favor this 
approach should address which factors should be included in 
establishing sanctions and the weight that might be appropriate for 
each factor.
    6. The Enforcement Policy is intended to provide regulatory 
messages to improve performance such as encouraging identification of 
violations, being responsive to information that may suggest the need 
to take action to determine the existence of a violation, taking 
prompt, comprehensive and lasting corrective action, and addressing 
performance problems.
    (a) Does the enforcement correspondence that transmits the 
enforcement actions adequately convey the above messages?
    (b) Does the enforcement correspondence that transmits the 
enforcement actions adequately convey the significance the NRC places 
on the violations, the areas where improvement in performance are 
needed, and the reasons for the sanctions?
    (c) Is the enforcement correspondence understandable? Should it be 
simplified? If so, how?
    7. Should there be different enforcement policies and procedures 
(e.g., correspondence, enforcement conferences, inspection 
documentation, civil penalty assessment factors) for large licensees, 
such as power reactors and major fuel facilities, and for smaller 
licensees? If so, how should the policies and procedures differ?

B. Severity Levels of Violations

    Violations are normally categorized in terms of five levels of 
severity to show their relative importance within a particular activity 
area such as ``reactor operations'' or ``health physics.'' The level of 
severity assigned is intended to be based on the violation's actual or 
potential safety consequence and regulatory significance within the 
selected activity area. Specific examples of severity levels for 
particular violations are given in the Enforcement Policy supplements 
to improve consistency and enhance the ability to apply the policy.
    1. Should the NRC continue to use the existing severity levels to 
categorize regulatory and safety significance of violations? If not, 
why not and how should the Enforcement Policy be changed?
    2. Is there a benefit to have both a Severity Level IV and V? 
Should severity levels be used at all if violations are not associated 
with a civil penalty?
    3. Recognizing that not all violations are of equal significance, 
are there sufficient examples to categorize the range of significance 
of violations?
    (a) Do the existing examples appropriately reflect significance? If 
not, why not?
    (b) If the existing examples are not sufficient, what other 
examples should be included?
    (c) Should the examples be revised to be more general? More 
specific?
    (d) Is sufficient flexibility provided to consider willfulness and 
other circumstances? What circumstances not now considered should be 
considered, if any, in establishing a severity level?

C. Enforcement Conferences

    The Enforcement Policy provides that when the NRC learns of a 
potential violation for which escalated enforcement action may be 
warranted, the NRC normally provides the licensee an opportunity for an 
enforcement conference prior to taking enforcement action. A conference 
may also be held for a Severity Level IV violation if increased 
management attention is warranted. The purpose of the conference is to 
discuss the potential violations, their significance, the reason for 
their occurrences including the root causes, and the licensee's 
corrective actions. It provides NRC management an opportunity to 
emphasize, directly with senior licensee management, the significance 
of the violations and the need for effective lasting corrective action. 
Also, the NRC uses the conference to determine whether there were any 
aggravating or mitigating circumstances, and to obtain any other 
information, including whether the licensee questions the findings of 
the inspection, which may assist in determining the appropriate 
enforcement action.
    Enforcement conferences are not routinely open to the public. 
(However, a trial program to open about 25 percent of the conferences 
to the public is currently underway. See footnote 2)
    1. Do enforcement conferences serve the purposes stated above? If 
not, how can they be improved?
    2. What are the benefits and weaknesses of conducting enforcement 
conferences?
    3. In deciding whether to hold a conference, should the NRC 
consider whether the licensee desires to attend a conference?
    4. Is the current criteria used to hold a conference appropriate? 
If not, when should conferences be held?
    5. Recognizing that apparent violations may be reconsidered 
following an enforcement conference, should NRC continue the practice 
of issuing inspection reports that address the apparent violations 
prior to an enforcement conference?
    6. Enforcement conferences are normally held in regional offices. 
Should this continue, or should they be held closer to the facility of 
the licensee?
    7. As to open enforcement conferences:
    (a) Have open enforcement conferences affected NRC performance 
during the conference? If so, how?
    (b) Have open enforcement conferences impacted the licensee's 
participation in the conference? If so, how?
    (c) Have open conferences impacted the licensees' cost of 
participating at conferences? If so, how? If more preparation is 
required, how substantial is that preparation and why should the 
presence of public attendance impact the licensee's presentation?
    (d) Has the public benefited from the ability to observe 
enforcement conferences?
    (e) Should all enforcement conferences be transcribed with the 
transcript subsequently made public? For those who oppose open 
conferences, would that be a viable alternative to open enforcement 
conferences?
    (f) The NRC staff in Rockville, Maryland frequently participates in 
closed enforcement conferences held in the region by telephone.
    (i) Is that appropriate for open conferences?
    (ii) Should the public be allowed to listen by telephone to open 
conferences?
    (g) Should open enforcement conferences be made a permanent part of 
the enforcement program?
    8. Are there circumstances where a Demand for Information may be an 
appropriate substitution for an enforcement conference? If so, what 
circumstances should be considered?

D. Notices of Violations

    The policy of the Commission has been to formalize the occurrence 
of a violation by issuance of a Notice of Violation and by requiring 
documented corrective action.
    1. There are circumstances provided in the Enforcement Policy for 
not issuing a formal notice of violation to provide incentives for 
identification and corrective action for violations at Severity Level 
IV, as well as to save both NRC and licensee resources for violations 
at Severity Level V. In general where the licensee has identified a 
non-recurring violation at Severity Level IV and taken appropriate 
corrective action, the inspection finding is documented in the 
inspection report and closed out as a ``non-cited violation,'' with no 
written response required.
    (a) Should the circumstances for use of non-cited violations be 
changed to cover more situations or fewer (including different severity 
levels)? If so, explain.
    (b) Does the use of non-cited violations contribute to providing an 
incentive for identifying and correcting violations or does it have the 
same negative impact as a cited violation in a Notice of Violation?
    (c) Should non-cited violations be treated any differently from a 
cited violation when considering compliance history in the 
deliberations on the appropriate regulatory response to a subsequent 
violation? If so, explain.
    (d) Should NRC continue to use non-cited violations?
    (e) If non-cited violations should not be used in the future, how 
should the NRC disposition findings in an inspection report that 
provides sufficient detail to demonstrate that a violation occurred? 
How should NRC track these findings and what should they be called?
    2. Is there any purpose to issuing Notices of Violations at 
Severity Level V? Should all such violations be treated as non-cited 
violations?
    3. Should all Notices of Violations require a written response? If 
not, what should the documentation requirements be for corrective 
action? What access rights should be given to the public to review the 
documentation?
    4. The materials program utilizes NRC Form 591, `` Safety 
Inspections,'' which an inspector may use to document certain 
violations and after the licensee signs the form stating that 
corrective action will be taken within 30 days, serves as a Notice of 
Violation. Form 591 is intended to be issued by the inspector directly 
to the licensee without further agency review at the conclusion of the 
inspection.
    (a) Should this process be expanded to cover fuel cycle and reactor 
licensees?
    (b) Should this process be expanded to cover other enforcement 
sanctions?

E. Civil Penalties

    A civil penalty is a monetary penalty that may be imposed for 
certain violations. Civil penalties are intended to emphasize the need 
for lasting remedial action, and to deter future violations both by the 
licensed party and by other licensees conducting similar activities.
    The base civil penalty amounts have not been changed since the 
early 1980's. To maintain a constant dollar amount for civil penalties, 
adjustment for inflation would increase the current amounts by more 
than 60 percent. For smaller licensees, a civil penalty may be a 
deterrent because of the financial impact; for power reactor licensees, 
the current civil penalty amounts are of little financial impact, but 
may have a deterrent effect through the adverse publicity that attends 
the issuance of a civil penalty.
    1. Should civil penalties continue to be part of the NRC regulatory 
process? If not, why not? How and when should they be used?
    2. Have civil penalties been effective in improving compliance and 
providing deterrence? If so, why? If not, why not?
    3. The Review Team on Reassessment of the NRC's Program for 
Protecting Allegers Against Retaliation concluded that higher civil 
penalties are appropriate and recommended a statutory amount of 
$500,000. The legislative history for section 234 of the Atomic Energy 
Act does not provide a specific basis for the current statutory amount 
of $100,000. The recommendation of that Review Team was based on the 
average cost of a day of replacement power for a power reactor. The 
recommended increase was intended to provide a more financially 
relevant penalty and provide for a greater spread of penalty amounts 
among the severity levels. (See, NUREG 1499 at page II.D-5-6)
    (a) Given that significant violations continue to be identified, 
and that civil penalties are intended to have a punitive aspect, would 
higher civil penalties provide a greater incentive for compliance for 
the larger licensees regulated by the Commission?
    (b) Should the statutory amount of civil penalties be increased? If 
so, to what extent? If not, why not?
    (c) Since the civil penalty amount in Section 234 of the Atomic 
Energy Act was last amended in 1980, there has been considerable 
inflation. Should the base civil penalties be indexed for inflation?
    (d) Should the civil penalty amount take into consideration the 
costs associated with an enforcement action including the cost of the 
investigation and processing the action?
    4. Should the amount of the penalty be normally based solely on the 
existence of the violation similar to a traffic ticket? If so, why? If 
not, why not?
    (a) If not, are there some violations such as overexposures to 
workers, releases of radioactive material, exposures to members of the 
public, failure to use survey instruments by radiographers, etc, where 
civil penalties should be assessed without regard to adjustment 
factors? If not, why not?
    (b) Does it matter whether a penalty is increased or decreased from 
the base amount, or is the existence of a penalty the controlling 
factor?
    5. Should the penalty consider contributing factors, such as the 
root cause of or the licensee's response to the violation? If so, why? 
If not, why not?
    6. The current adjustment factors are designed to encourage good 
performance (e.g., prompt identification, prompt and comprehensive 
corrective action, and evidence of past lasting corrective action) and 
deter poor performance (e.g., lack of identification and prompt or 
comprehensive corrective action, not being responsive to opportunities 
to identify violations, and not taking lasting corrective action). The 
NRC expends considerable effort to adjust civil penalties to provide an 
appropriate regulatory message.
    (a) Should the current civil penalty adjustment factors continue to 
be used? If not, why not and which factors should be deleted or what 
factors should be added?
    (b) Do the current adjustment factors provide the intended 
incentives or deterrence? If not, please explain.
    7. Comments are requested on the use of the specific factors.
    (a) Should there be any mitigation for self-disclosing events where 
the violation is relatively obvious, i.e., given the event, the 
licensee really has no choice but to pursue it to determine the cause? 
If not, why not? If so, why?
    (b) Should mitigation be allowed for corrective action, if the 
individuals responsible for the violations, assuming adequate 
resources, training, procedures, and supervision, have not been 
appropriately disciplined? How extensive should corrective action be to 
permit mitigation?
    (c) Since enforcement should be designed to influence performance, 
should past poor performance be considered and cause penalties to be 
increased if current performance is good, i.e., the licensee identifies 
and corrects the particular violation assuming recent performance 
(e.g., six months) has been good and there has not been a failure to be 
responsive to opportunities of prior notice? Similarly, should past 
good performance be considered and cause penalties to be lowered where 
current performance is not good, i.e. the licensee does not identify 
and corrects the violations?
    (d) The Atomic Energy Act provides that each day a violation 
continues shall be considered a separate violation for assessing a 
civil penalty. The longer a violation exists the likelihood of a 
consequence increases. Should duration be routinely considered if a 
civil penalty would otherwise be assessed? If not, why not and how 
should duration be factored into the amount of the penalty?
    (e) Should prompt, comprehensive corrective action by the licensee 
be sufficient to warrant full mitigation of the civil penalty, 
regardless of the other factors such as prior performance, duration, 
prior opportunities, and lack of identification or reporting?
    (f) Should there be civil penalties if the licensee identifies and 
promptly and comprehensively corrects a violation? If so, how should 
factors such as repetitive violations, past poor performance, prior 
opportunities to have identified the violation earlier, multiple 
examples and duration be considered?
    (g) Reporting is not currently considered as an assessment factor 
and reporting failures are considered for enforcement separate and 
apart from the matter not reported. How should reporting issues be 
considered?
    (i) Should there be full mitigation if a licensee identifies a 
violation associated with a reportable matter, when the report is not 
properly made?
    (ii) Should reporting a violation be considered a separate 
mitigating factor? If so, should mitigation be allowed where the matter 
reported was required to be reported since not to do so would be a 
separate violation subject to a separate sanction?
    (iii) Should there be a separate sanction for reporting failures 
apart from the violation not reported?
    (h) In applying the factors of past performance and prior 
opportunities to identify violations, over what time period should 
these factors be considered (e.g., events that occurred two years prior 
to the violation for which the current sanction is being considered)?
    (i) Is it appropriate to consider the same facts in determining the 
existence of a violation, its severity level, and in the application of 
the assessment factors (e.g., in a corrective action violation 
escalating a penalty for opportunities to correct a matter earlier and 
considering the delay as added significance in establishing the 
severity level)? If not, why not?
    8. The Enforcement Policy provides some flexibility in applying the 
adjustment factors but it does provide specified percentages to limit 
the application of the factors.
    (a) Should the Enforcement Policy be changed to permit 
consideration of factors without providing specified percentages that 
should be used for the assessment? If not, why not?
    (b) If so, should there be any outer limit other than the statutory 
maximum per violation?
    (c) The deletion of percentages will permit greater judgement and 
flexibility to arrive at an appropriate penalty. Will this create a 
concern for consistency and predictability?
    9. Regional Administrators have been delegated the authority to 
issue civil penalties for certain materials cases without review by the 
Office of Nuclear Materials, Safety and Safeguards, Office of 
Enforcement, or the Office of General Counsel.
    (a) Should delegation be similarly considered for certain reactor 
cases? If so, what cases warrant such delegation and why? If delegation 
is not appropriate, why not?
    (b) Are there some violations for which the inspector or section 
chief should be allowed to issue proposed civil penalties without 
further agency review? ( See question D.4)
    10. The Enforcement Policy in Table I.A establishes base civil 
penalties for different types of licensees. In developing the table it 
was intended that generally, operations involving greater nuclear 
inventories and greater potential consequences to the public and 
licensee employees would receive higher civil penalties and that the 
amounts, as a secondary factor, would reflect an ability to pay the 
penalty. Table I.A does not reflect that for a given type of licensee 
there can be a wide range in sizes, abilities to pay, and potential 
hazards (e.g., large broad base hospitals in comparison to small rural 
community hospitals, large research reactors in comparison to very 
small reactors, or nation wide radiographer firms in comparison to one 
person radiographer firms).
    (a) Should Table I.A reflect different sizes of licensees and 
different hazards for a given type of licensee? If so, how should this 
be considered and reflected in the Enforcement Policy?
    (b) Are the categories of licensees listed in Table I.A 
appropriate? If not, what changes should be made and why?
    (c) Are the base civil penalties amounts in Table I.A of the 
Enforcement Policy appropriate for the different types of licensees? If 
not, what changes should be made and why?
    (d) Are the percentages listed in Table I.B appropriate for the 
different severity levels (e.g., 80 percent of the base civil penalty 
for a Severity Level II violation)? If not, what changes should be made 
and why?

F. Orders and Confirmatory Action Letters

    An order is a written NRC directive to modify, suspend, or revoke a 
license, or cease and desist from a practice or activity. A 
Confirmatory Action Letter is a document that reflects commitments made 
by a licensee which may in some cases reflect significant obligations. 
Unlike an order, it does not create legal obligations other than a 
reporting requirement if an obligation is not met.
    1. Should orders be used to a greater or lesser extent than at 
present?
    2. Should Confirmatory Action Letters be used to a greater or 
lesser extent than at present?
    3. Under what circumstances should a Confirmatory Action Letter be 
used as a substitute for an order?
    4. Are licensees actions in response to Confirmatory Action Letters 
different from orders? Do licensees treat them differently?

G. Exercise of Discretion

    The Enforcement Policy in Section VII. A and B provides guidance on 
when to exercise discretion, and either escalate or mitigate 
enforcement sanctions, to ensure that the resulting enforcement action 
appropriately reflects the level of NRC concern, and conveys the 
appropriate regulatory message to the licensee. [Note, the enforcement 
review is not addressing section VII.C. of the Enforcement Policy 
entitled, ``Exercise of Discretion for an Operating Reactor'' that 
addresses ``Notices of Enforcement Discretion.'']
    1. Is the guidance provided for exercise of discretion adequate?
    2. Should there be additional examples where discretion should be 
exercised? For example, should facilities that are recognized by the 
NRC to be poor performers (sometimes referred to as plants on the 
``watch list'' or ``problem plant list'') continue to be subject to 
civil penalties during the period of time it takes to improve their 
performance which normally takes some time to achieve? Should such 
discretion be exercised even if an average performer with the same 
violations would receive a civil penalty? Should the response be 
dependent on whether the plant is shut down or operating? Should the 
response be dependent on whether the licensee or the NRC identifies the 
violation?

H. Timeliness of Enforcement Actions

    The NRC attempts to issue routine escalated enforcement actions 
within eight weeks of identification of the potential enforcement 
issue. An enforcement conference is typically held within four weeks of 
completion of an inspection.
    1. Are these timeliness guidelines for issuance of escalated 
enforcement actions appropriate?
    2. Enforcement conferences are usually scheduled at the convenience 
of the NRC in the interest of timely enforcement actions. In scheduling 
enforcement conferences, should NRC schedule them at the mutual 
convenience of both the NRC and licensee even if it delays the 
enforcement action, assuming that the delays are not unreasonable?
    3. Some enforcement cases take considerably longer than the eight 
week goal noted above. Has such delay substantially impacted licensees? 
Is such delay a significant concern? Explain.
    4. If the time to process an escalated enforcement action should be 
reduced, should it be done at the expense of omitting review by the 
Office of General Counsel, Office of Enforcement, or the appropriate 
program office?

I. Violations Involving Willfulness and Actions Against Persons for 
Wrongdoing

    The NRC's Enforcement Policy identifies willful violations to be of 
particular concern, and provides for escalation of the severity level 
of a violation based on willfulness.
    1. Does the Enforcement Policy appropriately reflect the 
significance of willful violations? If not, how should the Policy be 
changed to better reflect the significance of willful violations?
    2. Is sufficient guidance provided for developing sanctions against 
licensees for willful violations? If not what additional guidance or 
criteria would be appropriate?
    3. Is sufficient guidance provided for developing consistent 
sanctions against individuals for wrongdoing? If not, what additional 
guidance or criteria would be appropriate?
    4. NRC focuses its enforcement actions on licensees. Normally the 
NRC when it issues sanctions to licensees' employees, contractors or 
other agents, also issues sanctions to licensees. Should the NRC issue 
enforcement actions to licensees when sanctions are also issued to 
their employees, contractors or other agents? If not, why not, and 
under what circumstances should action not be taken against licensees 
for the actions of others?
    5. Should orders be used more frequently against individuals who 
violate the rule on deliberate misconduct (e.g., 10 CFR 30.10, 40.10, 
and 50.5)? Does the potential for the use of such orders increase 
accountability by employees and contractors? Do employees and 
contractors appreciate that they may be subject to direct action by the 
NRC?
    6. Should the NRC use civil penalties against individual wrongdoers 
who violate regulations such as 10 CFR 30.10 and 10 CFR 50.5 in lieu of 
orders which impact the employees' livelihood?
    7. A Letter of Reprimand is used to notify an individual of a 
violation when a formal sanction is not warranted. Should a Letter of 
Reprimand be used rather than a more formal action such as a Notice of 
Violation or an order where the individual has willfully violated a 
requirement? If so, under what circumstances? For example, should it be 
used in cases where a relatively low level employee has been fired as a 
result of the violation and the employee appears to be candid and 
remorseful.
    8. If a criminal sanction is issued against an employee or agent of 
a licensee who caused the violation, should civil sanctions be issued 
against the licensee who is licensed by the NRC for the activity?
    9. The Enforcement Policy also states that civil penalties are 
considered for all willful violations. However, to encourage licensees 
to identify willful violations and to take strong remedial actions to 
demonstrate the seriousness of such violations to other employees and 
contractors thereby creating a deterrent effect, discretion may be 
exercised for certain willful violations at Severity Level IV or V. Is 
this consistent with the seriousness of willful violations and should 
this policy be continued? Should it be expanded to other severity 
levels?

J. Additional Comments

    In addition to the above specific issues, commenters are invited to 
provide any other views on the NRC enforcement program which may assist 
the NRC in improving the effectiveness of NRC enforcement efforts.

    Dated at Rockville, Maryland, this 16th day of August 1994.

    For the Nuclear Regulatory Commission.
James Lieberman,
Director, Office of Enforcement.
[FR Doc. 94-20618 Filed 8-22-94; 8:45 am]
BILLING CODE 7590-01-P