[Federal Register Volume 61, Number 219 (Tuesday, November 12, 1996)]
[Notices]
[Pages 58085-58087]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28884]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 999-90003, General License London Ohio EA 96-041]


The Dial Corporation, London, OH, Order Imposing Civil Monetary 
Penalty

I

    The Dial Corporation (Licensee) was authorized to use licensed 
materials by the Nuclear Regulatory Commission (NRC or Commission) 
pursuant to the general license provisions in 10 CFR Part 31. The 
Licensee possessed and used generally licensed industrial gauging 
devices containing nuclear materials, principally strontium-90 and 
americium-241.

II

    An inspection of the Licensee's activities was conducted from 
January 22 to February 21, 1996. The results of this inspection 
indicated that the Licensee had not conducted its activities in full 
compliance with NRC requirements. The inspection report was sent to 
Dial by letter dated March 12, 1996, and by letter, dated April 9, 
1996, Dial responded to the apparent violation described in the 
inspection report. A written Notice of Violation and Proposed 
Imposition of Civil Penalty (Notice) was served upon the Licensee by 
letter dated June 18, 1996. The Notice states the nature of the 
violation, the provision of the NRC's requirements that the Licensee 
had violated, and the amount of the civil penalty proposed for the 
violation.
    In its April 9, 1996 response to the inspection report, Dial 
admitted the violation had occurred. The Licensee responded to the 
Notice in a Reply to a Notice of Violation and an Answer to a Notice of 
Violation, both dated July 16, 1996. In the July 16, 1996 letters, the 
Licensee requested mitigation of the proposed civil penalty and alleged 
that the cover letter for the Notice was incorrect as to the Licensee's 
efforts to

[[Page 58086]]

locate the source and report its loss. The NRC's responses to those 
allegations are contained in the Appendix to this Order.

III

    Historically, uncontrolled radioactive material has resulted in 
radiation exposure to members of the general public, contamination in 
scrap yards and foundries as a result of smelting activities, and 
environmental contamination. In order to emphasize the importance of 
adequate oversight and control of radioactive material, and 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 penalty proposed for the violation designated in the Notice 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 $2,500 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 Mr. 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 III, 801 Warrenville Road, Lisle, IL 60532-4351.
    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: Whether, on the basis 
of the violation admitted by the Licensee, this Order should be 
sustained.

    Dated at Rockville, Maryland this 31st day of October 1996.

    For the Nuclear Regulatory Commission.

James Lieberman,
Director, Office of Enforcement.

Appendix--Evaluation and Conclusion

    On June 18, 1996, a Notice of Violation and Proposed Imposition 
of Civil Penalty (Notice) was issued for a violation identified 
during an NRC inspection. The Dial Corporation (Licensee) responded 
to the inspection findings in a letter dated April 9, 1996. (The 
inspection report was mailed to the Licensee on March 12, 1996.) The 
Licensee replied to the Notice on July 16, 1996. In its April 9, 
1996 letter, the Licensee admitted the violation. In the July 16, 
1996 correspondence, the Licensee requested that the civil penalty 
be fully mitigated or reduced to $730. The NRC's evaluation and 
conclusion regarding the licensee's requests are as follows:

Restatement of Violation

    10 CFR 31.5(c)(8) requires, in part, that any person who 
acquires, receives, possesses, uses or transfers byproduct material 
in a device pursuant to a general license shall, except as provided 
in 10 CFR 31.5(c)(9), transfer or dispose of the device containing 
byproduct material only by transfer to persons holding a specific 
license pursuant to 10 CFR Parts 30 and 32 or from an Agreement 
State to receive the device.
    Contrary to the above, during the approximate period 1992 to 
October 1995, the licensee disposed of an NDC Systems gauge 
containing an americium-241 sealed source of nominally 200 
millicuries and this disposal was not made to a person holding a 
specific license pursuant to 10 CFR Parts 30 and 32 or from an 
Agreement State to receive the device and the exceptions in 10 CFR 
31.5(c)(9) did not apply. (01013)
    This is a Severity Level III violation (Supplement VI). Civil 
Penalty--$2,500.

NRC Evaluation of Licensee's Letter Dated July 16, 1996, ``Reply to 
a Notice of Violation''

    As discussed in the NRC's June 18, 1996 letter transmitting the 
Notice, the NRC informed the Licensee that the application of the 
civil penalty assessment process resulted in no monetary penalty 
being assessed. That letter also informed the Licensee that 
notwithstanding the civil penalty assessment process, a penalty was 
proposed under the enforcement discretion provisions in Section 
VII.A.1(g) of the NRC Enforcement Policy. This discretionary factor 
permits the proposal of a civil penalty when NRC-licensed material 
is lost, unless the licensee identifies and reports the loss to the 
NRC. The June 18, 1996 letter also indicated that discretion was 
being exercised because licensed material was not controlled and was 
currently missing.
    In its July 16, 1996 letter, ``Reply to a Notice of Violation,'' 
the Licensee indicates that it found part of the gauging device on 
October 25, 1995, initiated a prompt search for the americium-241 
source on that same day, and reported the loss to the NRC on 
November 3, 1995 during a discussion with an NRC Inspector. However, 
during a November 2, 1995 discussion between the Licensee's 
Materials Manager and the NRC Inspector, the NRC was not informed 
that the Licensee had discovered the loss on October 25, 1995. 
Furthermore, during a November 3, 1995 discussion, it was only as 
the result of a direct question from the NRC Inspector about other 
NRC-licensed materials in the possession of the Licensee that the 
Materials Manager told the Inspector that the americium-241 source 
was missing. Since the inspector was not specifically informed that 
Dial had discovered the loss on October 25, 1995, the Inspector 
concluded that Dial had discovered the loss on November 3, 1995.
    As to reporting, the Licensee contends that a report was made 
within the 30 day period permitted by 10 CFR 20.2201(a)(ii). 
However, 10 CFR 20.2201(a)(ii) is not the applicable requirement. 
Rather, 10 CFR 20.2201(a)(i) is applicable and requires that a 
licensee must immediately notify the NRC of any stolen, lost or 
missing material in a quantity of 1,000 times the limit specified in 
10 CFR Part 20, Appendix C. The limit specified by 10 CFR Part 20, 
Appendix C, for americium-241 is 0.001 microcuries. In this case, 
the missing americium-241 source was nominally 200 millicuries which 
greatly exceeds the requirement for making an immediate report to 
the NRC. Therefore, the Licensee was required to notify the NRC 
immediately upon discovery that the americium-241 source was 
missing.
    In view of this, the NRC staff has reconsidered the application 
of discretion under the enforcement discretion provisions in Section 
VII.A.1(g) of the NRC Enforcement Policy (NUREG-1600). Although not 
properly reported as required, the licensee did inform the NRC of 
the loss. Nonetheless, this case is particularly significant. The 
Licensee admits that a nominal 200 millicurie americium-241 source 
is missing from its London, Ohio facility. The Licensee does not 
know the circumstances of the loss, the ultimate disposition of the 
material, or the possibility of any individual exposures to 
radiation. With the source and its probe intact and the source 
shutter closed, the likelihood of significant radiation exposure to 
Dial staff or to members of the public is minimal. However, if the 
source is ruptured, or otherwise not intact, (e.g., the probe is 
shredded or melted down with scrap materials) significant facility 
and environmental contamination may occur with resultant internal 
and external

[[Page 58087]]

personnel radiation exposure. As a member of the group of 
transuranic elements, with alpha particle emissions, a physical half 
life of 458 years and an effective half-life in bone of about 140 
years, unsealed and uncontrolled americium-241 is a significant 
internal radiation exposure hazard. Moreover, the fundamental cause 
of this incident was that the licensee possessed radioactive 
material and was not aware of it and did not control it.
    In the view of the NRC staff, it is important to provide a 
strong message to licensees that it is not acceptable to possess 
radioactive material without appropriate controls. Given the 
quantity of licensed material that was lost, a civil penalty is 
warranted. Accordingly, pursuant to Section VII.A.1. of the 
Enforcement Policy, the NRC is exercising discretion by assessing a 
civil penalty to reflect the significance of not maintaining 
awareness of possession and not controlling the material.

Summary of Licensee's Request for Mitigation

    The Dial Corporation (Dial) requests that the proposed civil 
penalty be mitigated for extenuating circumstances and as a 
Violation Involving Special Circumstances under NUREG-1600, Section 
VII.B.6. Dial indicates in its July 16, 1996, ``Answer to a Notice 
of Violation,'' that the loss of the source was an inadvertent, one-
time occurrence, that the loss occurred as long ago as 1992, and the 
loss was of limited safety significance.
    Dial also contends that it was unaware of the presence of the 
device from the time of the asset transfer (from Purex) which 
occurred in 1985 until the October 25, 1995 call from OSHA. 
Therefore, it could not be expected to have prevented the violation.
    Dial contends further that since it has no intention of 
possessing any licensed material in the future, a civil penalty can 
have no deterrent effect, and that the NRC enforcement program or 
goals are not served by imposing a penalty.
    Finally, Dial took exception to the amount of the proposed civil 
penalty, contending that the amount of the penalty exceeded the $730 
that Dial estimated would be the cost to dispose of an americium-241 
source.

NRC Evaluation of Licensee's Request for Mitigation

    The NRC has reviewed the Licensee's request to mitigate the 
civil penalty pursuant to Section VII.B.6 of NUREG-1600, 
``Violations Involving Special Circumstances.'' As previously noted, 
the loss of the americium-241 source has potential radiation safety 
consequences for Dial employees and the general public. The NRC has 
not identified any other extenuating or special circumstances in the 
NRC Enforcement Policy or in Dial's response that warrants 
mitigation of the civil penalty.
    The Licensee contends that from the time the London, Ohio, 
facility was purchased in 1985 from The Purex Corporation, it was 
unaware that it possessed licensed material until it was contacted 
by the Occupational Safety and Health Administration (OSHA), on 
October 25, 1995, and could not have been reasonably expected to 
prevent the violation. This contention is not supported by the 
evidence. On May 21, 1991, NDC Systems, the manufacturer of the 
americium-241 gauge, repaired the device and on May 24, 1991, 
returned it to Dial at the London, Ohio, facility. Furthermore, NDC 
analyzed a leak test sample from the americium-241 source and 
provided Dial with a Leak Test Certificate, dated October 10, 1991. 
Therefore, it is reasonable to conclude that Dial was or should have 
been aware of the americium-241 gauge before OSHA contacted the 
London, Ohio, facility about radioactive materials on October 25, 
1995.
    The NRC disagrees with the Licensee's contention that a civil 
penalty can have no deterrent effect and that the NRC's enforcement 
program and goals are not served by imposing a civil penalty. A 
civil penalty imposed for lost or missing radioactive sources 
emphasizes the importance the NRC places on the control of licensed 
material. It encourages compliance in all licensees in a manner that 
deters future violations.
    The Licensee stated that if a civil penalty must be imposed, a 
civil penalty of $730 would be realistic because it is the amount 
that Dial estimates it would cost for proper disposal of the 
americium-241 source. The Licensee based its estimate of $730 for 
disposal on the cost of disposing of two, nominally 25 millicurie 
(925 MBq) sources of strontium-90. The Licensee did not consider the 
added cost for disposing of a transuranic (americium-241).
    The staff contacted both the device manufacturer and an NRC-
licensed waste disposal broker. The manufacturer indicated that it 
would cost about $500 to have a device containing americium-241 
returned for refurbishment. The waste broker estimated that it would 
cost approximately $5,000 to take the americium-241 source for 
disposal. Consideration was therefore given to increasing the civil 
penalty to reflect the cost of disposal. However, in consideration 
of your intent not to possess radioactive material in the future, 
the civil penalty was not increased.

NRC Conclusion

    The NRC has concluded that this violation occurred as stated and 
has potential safety consequences. Consequently, the proposed civil 
penalty in the amount of $2,500 should be imposed. The NRC has also 
reconsidered the application of the enforcement discretion 
provisions in Section VII.A.1.(g) of the NRC Enforcement Policy. A 
$2,500 civil penalty is in accordance with the discretion authorized 
in Section VII.A.1. of the NRC Enforcement Policy.

[FR Doc. 96-28884 Filed 11-8-96; 8:45 am]
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