[Federal Register Volume 61, Number 50 (Wednesday, March 13, 1996)]
[Notices]
[Pages 10387-10389]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5993]



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NUCLEAR REGULATORY COMMISSION
[Docket No. 030-32202; License No. 11-27316-01; EA 95-148]


Diamond H Testing Company; Pocatello, Idaho; Order Imposing Civil 
Monetary Penalty

I

    Diamond H Testing Company (DHT, Licensee) is the holder of NRC 
Materials License No. 11-27316-01 issued by the Nuclear Regulatory 
Commission (NRC or Commission). The license authorizes the Licensee to 
possess sealed radioactive sources and to utilize those sources to 
conduct industrial radiography in accordance with the conditions 
specified therein.

II

    An inspection of the Licensee's activities was conducted June 16 
through July 12, 1995, following the Licensee's report of an incident 
that occurred during radiography activities in Hawaii. The results of 
this inspection, documented in a report issued on September 11, 1995, 
indicated that the Licensee had not conducted its activities in full 
compliance with NRC requirements. A predecisional enforcement 
conference was conducted on September 26, 1995, in the NRC's Arlington, 
Texas, office. A written Notice of Violation and Proposed Imposition of 
Civil Penalty (Notice) in the amount of $8,000 was served upon the 
Licensee by letter dated October 25, 1995. The Notice described the 
nature of the violations, the provisions of the NRC's requirements that 
the Licensee had violated, and the amount of the civil penalty proposed 
for the violations.
    The Licensee responded to the Notice in two letters both dated 
November 15, 1995 (Reply to a Notice of Violation and Answer to a 
Notice of Violation). In its responses, the Licensee admitted that 
portions of the regulations were violated, but denied that it should be 
held responsible for the violations because they resulted from 
independent decisions made by one of its radiographers, and stated that 
certain factors warranted mitigation of the proposed civil penalty.

III

    After consideration of the Licensee's response and the statements 
of fact, explanation, and argument for mitigation contained therein, 
the NRC staff has determined, as set forth in the Appendix to this 
Order, that the violations occurred as described in the Notice, that 
the Licensee is fully responsible for the violations committed by its 
radiographer, and that the penalty proposed for the violations 
designated in the Notice should be mitigated by $3,000. Thus, a civil 
penalty in the amount of $5,000 should be imposed.

IV

    In view of the foregoing and pursuant to Section 234 of the Atomic 
Energy Act of 1954, as amended (Act), 42 U.S.C. 2282, and 10 CFR 2.205, 
it is hereby ordered that:
    The Licensee pay a civil penalty in the amount of $5,000 within 30 
days of the date of this Order, by check, draft, money order, or 
electronic transfer, payable to the Treasurer of the United States and 
mailed to James Lieberman, Director, Office of Enforcement, U.S. 
Nuclear Regulatory Commission, One White Flint North, 11555 Rockville 
Pike, Rockville, MD 20852-2738.

V

    The Licensee may request a hearing within 30 days of the date of 
this Order. Where good cause is shown, consideration will be given to 
extending the time to request a hearing. A request for extension of 
time must be made in writing to the Director, Office of Enforcement, 
U.S. Nuclear Regulatory Commission Washington, D.C. 20555, and include 
a statement of good cause for the extension. A request for a hearing 
should be clearly marked as a ``Request for an Enforcement Hearing'' 
and shall be addressed to the Director, Office of Enforcement, U.S. 
Nuclear Regulatory Commission Washington, D.C. 20555, with a copy to 
the Commission's Document Control Desk, Washington, D.C. 20555. Copies 
also shall be sent to the Assistant General Counsel for Hearings and 
Enforcement at the same address and to the Regional Administrator, NRC 
Region IV, 611 Ryan Plaza Drive, Suite 400, Arlington, Texas 76011.
    If a hearing is requested, the Commission will issue an Order 
designating the time and place of the hearing. If the Licensee fails to 
request a hearing within 30 days of the date of this Order (or if 
written approval of an extension of time in which to request a hearing 
has not been granted), the provisions of this Order shall be effective 
without further proceedings. If payment has not been made by that time, 
the matter may be referred to the Attorney General for collection.
    In the event the Licensee requests a hearing as provided above, the 
issues to be considered at such hearing shall be:
    (a) Whether the Licensee was in violation of the Commission's 
requirements as set forth in Section I of the Notice referenced in 
Section II above, and

[[Page 10388]]

    (b) Whether, on the basis of such violations, this Order should be 
sustained.

    For the Nuclear Regulatory Commission.

    Dated at Rockville, Maryland, this 5th day of March 1996.
James Lieberman,
Director, Office of Enforcement.

Appendix--Evaluation and Conclusions

    On October 25, 1995, a Notice of Violation and Proposed 
Imposition of Civil Penalty (Notice) in the amount of $8,000 was 
issued to Diamond H Testing Company (DHT or Licensee) for violations 
identified during an NRC inspection. The Licensee responded to the 
Notice in two letters both dated November 15, 1995. The Licensee 
admitted that portions of the regulations were violated, but denied 
that it should be held responsible for the violations because they 
resulted from independent decisions made by one of its 
radiographers, and stated that certain factors warranted mitigation 
of the proposed civil penalty.

Restatement of Violations I.A, I.B, and I.C

    A. 10 CFR 34.22(a) requires, in part, that, during radiographic 
operations, the sealed source assembly be secured in the shielded 
position each time the source is returned to that position.
    Contrary to the above, on two occasions on June 14, 1995, during 
radiographic operations at the Hawaiian Electric Company Kahe Unit 5 
Power Plant, a licensee radiographer did not secure the sealed 
source assembly in the shielded position after returning the source 
to that position. (01012)
    B. 10 CFR 34.33(a) requires that the licensee not permit any 
individual to act as a radiographer or a radiographer's assistant 
unless, at all times during radiographic operations, the individual 
wears a direct-reading pocket dosimeter, an alarm ratemeter, and 
either a film badge or a thermoluminescent dosimeter.
    Contrary to the above, on June 14, 1995, during radiographic 
operations at the Hawaiian Electric Company Kahe Unit 5 Power Plant, 
a licensee radiographer did not wear an alarm ratemeter while 
conducting radiographic operations. (01022)
    C. 10 CFR 34.43(b) requires, in part, the licensee to ensure 
that a survey with a calibrated and operable radiation survey 
instrument is made after each radiographic exposure to determine 
that the sealed source has been returned to its shielded position. 
The survey must include the entire circumference of the radiographic 
exposure device and any source guide tube.
    Contrary to the above, on June 14, 1995, during radiographic 
operations at the Hawaiian Electric Company Kahe Unit 5 Power Plant, 
a licensee radiographer did not perform an adequate survey after a 
radiographic exposure to determine that the sealed source had been 
returned to its shielded position in that the survey only included a 
portion of the source guide tube. (01032)
    These violations represent a Severity Level II problem 
(Supplement VI). Civil Penalty--$8,000

Summary of Licensee's Response to Violations I.A, I.B, and I.C

    The Licensee argued that there are several parts to each of the 
cited requirements for the above violations and that only one part 
of each requirement was violated. In addition, the Licensee denied 
that it should be held responsible for the violations because they 
resulted from independent decisions made by one of its 
radiographers.
    DHT did not admit responsibility for the violations, all of 
which DHT asserts resulted from the independent actions of the same 
radiographer who, DHT states, was experienced and appropriately 
trained. DHT also noted that the NRC found no negligence on DHT's 
part with respect to its radiation safety program or training of 
employees.

NRC Evaluation of the Licensee's Response to Violations I.A, I.B, 
and I.C

    The sections of 10 CFR Part 34 cited in the Notice set forth a 
number of requirements, and, in some cases, more than one 
requirement is contained in the same subsection or paragraph. As an 
NRC licensee, DHT is required to comply with each and every 
requirement in every instance in which a requirement applies. In 
this case, DHT failed to ensure that: (1) The sealed source was 
secured in the camera, (2) an adequate survey was performed, and (3) 
an alarm ratemeter was worn during radiographic operations; and the 
Licensee did not dispute the fact that these violations occurred. 
Therefore, the NRC concludes that the violations occurred as stated.
    The NRC strongly disagrees with, and is concerned about, DHT's 
failure to accept responsibility for the violations. The Commission 
resolved the responsibility issue between a licensee and its 
employees in its decision concerning the Atlantic Research 
Corporation case, CLI-80-7, dated March 14, 1980, a copy of which is 
enclosed. In that case, the Commission stated, in part, that ``a 
division of responsibility between a licensee and its employees has 
no place in the NRC regulatory regime which is designed to implement 
our obligation to provide adequate protection to the health and 
safety of the public in the commercial nuclear field.''
    The NRC does not specifically license the management or the 
employees of a company; rather, the NRC licenses the entity. The 
licensee uses, and is responsible for the possession of, licensed 
material. The licensee is the entity that hires, trains, and 
supervises the employees. All licensed activities are carried out by 
employees of licensees and, therefore, all violations are committed 
by employees of licensees. The licensee obtains the benefits of the 
employees good performance and suffers the consequences of their 
poor performance. Not holding the licensee responsible for the 
action of its employees, whether negligent or willful, is tantamount 
to saying that the licensee is not responsible for the use or 
possession of licensed material. If the NRC accepted DHT's position: 
(1) The NRC would have little ability to ensure its requirements on 
licensees were met and the public health and safety were protected; 
and (2) there would be little incentive for licensees to monitor 
their activities to assure compliance. Therefore, the NRC holds 
licensees responsible for the actions of their employees (``General 
Statement of Policy and Procedure for NRC Enforcement Actions'' 
(Enforcement Policy), NUREG-1600, Section VI.A). With regard to the 
DHT's argument that the NRC found no negligence on DHT's part and 
found its radiation safety and training programs adequate, the NRC 
considers this irrelevant to whether a violation occurred. As to 
civil penalties, Section VI.B of the Enforcement Policy provides 
that ``the lack of management involvement may not be cause to 
mitigate a civil penalty.''

Summary of the Licensee's Request for Mitigation

    The Licensee offered numerous arguments for mitigation of the 
proposed penalty. Below is a summary listing of the Licensee's 
arguments that are related to its request for mitigation, some of 
which have been consolidated. The NRC's evaluation follows each 
argument.
    1. DHT argued that it should be given credit for identifying the 
violations, in accordance with Section VI.B.2 of the NRC Enforcement 
Policy (Policy).

NRC Evaluation

    DHT correctly notes that credit may be given for identification 
through an event. The NRC agrees that the licensee responded 
promptly and thoroughly to the event, and that the licensee's 
investigation was important in determining the actual circumstances 
that resulted in the event. However, the intent of this provision is 
to allow credit only in situations where a licensee's investigation 
following an event uncovers violations and problems that were not 
apparent (for example, where a licensee uncovers programmatic 
weaknesses in procedures or training or design of equipment and 
takes action to correct those in addition to taking action to 
correct the direct causes of the event).
    The Policy notes that ``ease of discovery'' and ``licensee self-
monitoring effort'' are two of the factors that will be considered. 
In the case at hand, the NRC believes that the violations that 
resulted in the incident were easily discovered and were not 
identified as a result from a DHT self-monitoring effort, such as an 
audit or a program review. The overriding Policy principle in this 
case is to emphasize the importance of preventing events that 
threaten the safety of employees or members of the public. After 
considering the guidance in Section VI.B.2.b and in particular sub 
paragraph (iv) the NRC concludes that the Licensee did not provide 
an adequate basis for mitigating the civil penalty based on DHT's 
identification.
    2. DHT argued that the violations do not appear to fit any of 
the examples of Severity Level II violations in Supplement VI, and 
that they appear to fit Example C.7 in Supplement VI (``A breakdown 
in the control of licensed activities involving a number of 
violations . . .''). The Licensee argued therefore that the 
violations should have been classified at Severity Level III.

[[Page 10389]]


NRC Evaluation

    As noted in Section IV of the Policy, the examples in the 
supplements are neither exhaustive nor controlling. The NRC noted in 
the letter proposing the civil penalty that each of the violations 
that formed the basis for the civil penalty could have been 
classified at Severity Level III (Supplement VI, C.8) and, 
therefore, could have been assessed separate penalties. Factoring in 
the significance of the violations, their relationship to a single 
event, and the involved willfulness on the part of the radiographer 
with respect to at least one of the violations, the NRC utilized its 
discretion to consider the violations collectively and to treat them 
at the next highest severity level, Severity Level II.
    3. DHT argued that compliance was achieved in a major portion of 
all three of the regulations, substantiating that the radiographer 
had knowledge of the requirements and was not operating under a 
total disregard for the safety requirements, but rather under a 
potentially significant lack of attention or carelessness toward 
licensed activities. In addition, DHT contends that the violations 
appear to fit the criteria in Section VII.B.1.(d)(iii) for 
enforcement discretion because the violations appeared to be an 
isolated act of an employee without management involvement.

NRC Evaluation

    The NRC agrees with DHT's views concerning the radiographer's 
conduct. However, the Licensee's argument is not applicable with 
regard to mitigation of the civil penalty. As to DHT's contention 
that the violations appear to fit the criteria in Section 
VII.B.1.(d)(iii), the NRC disagrees with the Licensee because 
Section VII.B.1.(d)(iii) concerns licensee-identified Severity Level 
IV violations, not Severity Level II violations. Moreover, a 
radiographer, for purpose of the Enforcement Policy, is not a ``low-
level individual.'' Therefore, enforcement discretion based on 
Section VII.B.1. does not apply to this case.
    4. DHT cited several corrective actions which went beyond those 
described at the predecisional enforcement conference and therefore 
were not considered in the decision to propose a civil penalty. The 
additional corrective actions cited by DHT included 40-hour (versus 
8-hour) refresher training for all radiography personnel who have 
been with the company for more than 1 year and are due for annual 
refresher training.

NRC Evaluation

    These corrective actions were taken by the Licensee after the 
conference and were not factored into the decision-making process. 
Although the NRC gave the Licensee credit for its corrective actions 
in determining the proposed civil penalty amount, the NRC considers 
these additional corrective actions noteworthy because they go 
beyond what most small radiography licensees commit to and are 
somewhat beyond our expectations, given the circumstances of this 
case. Therefore, the NRC believes that discretion should be utilized 
to mitigate the proposed civil penalty by $3,000.

NRC Conclusion

    The NRC has considered all of the arguments the Licensee made 
and concluded that the violations occurred as stated in the original 
Notice and that they were appropriately classified as a Severity 
Level II problem. However, given the extensive corrective actions 
committed to by this Licensee, particularly the additional training 
of its radiography personnel, the NRC has determined that a basis 
exists for exercising discretion to reduce the proposed penalty by 
$3,000. Consequently, a civil penalty in the amount of $5,000 should 
be imposed.

EVALUATION OF VIOLATIONS NOT ASSESSED A CIVIL PENALTY

    Of the violations not assessed a civil penalty, Diamond H 
Testing Company (DHT or Licensee) neither admitted nor denied 
Violations II.A and Violation II.B. However, the Licensee again 
argued that the violations were the result of independent actions by 
its radiographer. In addition, the Licensee questioned the validity 
of citing 10 CFR 20.1801 with regard to Violation II.B.

Restatement of Violation II.B

    B. 10 CFR 20.1801 requires that the licensee secure from 
unauthorized removal or access licensed materials that are stored in 
unrestricted areas. 10 CFR 20.1802 requires that the licensee 
control and maintain constant surveillance of licensed material that 
is in an unrestricted area and that is not in storage. As defined in 
10 CFR 20.1003, unrestricted area means an area, access to which is 
neither limited nor controlled by the licensee.
    Contrary to the above, during an 8 to 10 minute period between 
approximately 9:45 p.m. and 10:00 p.m. on June 14, 1995, the 
licensee did not secure from unauthorized removal or limit access to 
a 48.2 curie iridium-192 sealed source in a Gamma Century exposure 
device located on the 9th floor of the Hawaiian Electric Company 
Kahe Unit 5 Power Plant, an unrestricted area, nor did the licensee 
control and maintain constant surveillance of this licensed 
material. (03014)
    This is a Severity Level IV violation (Supplement IV).

Summary of Licensee's Response to Violation II.B

    The Licensee questioned the validity of including 10 CFR 20.1801 
as applying to the circumstances in question. The Licensee stated 
that ``It [the exposure device] had been left for a period of 8 to 
10 minutes when the radiographer went to notify the RSO [radiation 
safety officer] of the situation.'' DHT's position is that 10 CFR 
20.1801, which was cited in conjunction with 10 CFR 20.1802, should 
not apply because the radiography camera was not ``stored'' at the 
field site location.

NRC Evaluation of Licensee's Response

    The Licensee admits that the camera was left in an unrestricted 
area and neither secured the material from unauthorized removal nor 
maintained constant surveillance of the licensed material. 
Therefore, while the NRC agrees with DHT that 10 CFR 20.1801 may not 
have applied, the NRC concludes that Licensee failed to comply with 
these requirements.

NRC Conclusion

    Based on the above, the NRC concludes that the licensee has not 
provided an adequate basis for withdrawal of the Violation II.B. 
Therefore, the Violation II.B occurred as stated in the Notice.

[FR Doc. 96-5993 Filed 3-12-96; 8:45 am]
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