[Federal Register Volume 61, Number 220 (Wednesday, November 13, 1996)]
[Notices]
[Pages 58253-58256]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28996]


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NUCLEAR REGULATORY COMMISSION

[Docket Nos. 50-245, 50-336, and 50-423; License Nos. DPR-21, DPR-65, 
and NPF-49]


Northeast Nuclear Energy Company (Millstone Nuclear Power Station 
Units 1, 2 and 3); Order Requiring Independent, Third-Party Oversight 
of Northeast Nuclear Energy Company's Implementation of Resolution of 
Millstone Station Employees' Safety Concerns

I

    Northeast Nuclear Energy Company (Licensee) is the holder of 
Facility Operating License Nos. DPR-21, DPR-65, and NPF-49 issued by 
the Nuclear Regulatory Commission (NRC or Commission) pursuant to Title 
10 of the Code of Federal Regulations (10 CFR) Part 50 on October 31, 
1986,1 September 26, 1975, and January 31, 1986, respectively. The 
licenses authorize the operation of Millstone Units 1, 2 and 3 in 
accordance with conditions specified therein. All three facilities are 
located on the Licensee's site in Waterford, Connecticut.
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    \1\ Millstone Unit 1 was issued its provisional operating 
license on October 7, 1970, and commenced operation on March 1, 
1971. This unit received a full term operating license on October 
31, 1986.
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II

    Over the past several years, the Licensee's management has failed 
to ensure compliance with regulatory requirements. In an attempt to 
address this compliance problem, the NRC issued an Order on August 14, 
1996 establishing independent, third-party oversight of corrective 
actions for design and plant operation deficiencies. The August 14, 
1996 Order, directing the implementation of an Independent Corrective 
Action Verification Program (ICAVP) for the Millstone facilities, 
summarizes the Licensee's failures to meet Criterion XVI of Appendix B 
to 10 CFR Part 50 and other NRC requirements. The August 14, 1996 Order 
also outlines what the NRC found to be ineffective implementation of 
the Licensee's oversight programs, including its NRC-approved quality 
assurance (QA) program. The purpose of the ICAVP is to provide 
independent verification, for selected systems, that the Licensee's own 
Configuration Management Plan (CMP) has identified and resolved 
existing problems, documented and utilized licensing and design bases, 
and established programs,

[[Page 58254]]

processes, and procedures for effective configuration management in the 
future.
    This Order addresses past failures in management processes and 
procedures for handling safety issues raised by employees, and in 
ensuring that the employees who raise safety concerns are not 
discriminated against. As discussed below, the Commission is concerned 
about the manner in which the Licensee has treated employees who 
brought safety and other concerns to the attention of the Licensee's 
management. As evidenced by the large number of deficiencies currently 
being identified at all three Millstone plants, it appears that some 
employees have been reluctant to identify safety issues. Both the NRC 
and the Licensee rely on a defense-in-depth approach to ensuring 
safety. The persistence of an environment where employees are reluctant 
to raise safety concerns can erode the safety-consciousness of the 
work-place and, thereby, can affect safety. As the Commission has 
stated, it expects that licensees will establish and maintain a safety-
conscious work environment in which employees feel free to raise 
concerns both to their own management and the NRC without fear of 
retaliation, and in which such concerns are promptly reviewed, given 
the proper priority based on their potential safety significance, and 
appropriately resolved with timely feedback to employees. Such an 
environment is critical to a licensee's ability to safely carry out 
licensed activities 2 in the work-place; thus it can affect 
safety.
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    \2\ Freedom of Employees in the Nuclear Industry to Raise Safety 
Concerns Without Fear of Retaliation; Policy Statement, 61 FR 24336 
(May 14, 1996). The attributes of a safety-conscious environment are 
described in the Policy Statement.
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    Over the past several years, numerous Licensee assessments, audits, 
and internal task group studies have been conducted to assess employee 
safety concerns programs at the Millstone Station.
    In January 1996, the Licensee completed a review 3 of the 
effectiveness of its Nuclear Safety Concerns Program (NSCP) in taking 
corrective actions related to employee concerns and ensuring that the 
employees who raise concerns are treated appropriately. The findings of 
the Licensee's 1996 review were similar to those of previous Licensee 
assessments, studies, and audits performed since 1991. Some of the 
common findings were that management (1) lacked accountability, (2) 
inadequately resolved identified problems, and (3) tended to punish 
rather than reward employees who raised safety concerns. The Licensee's 
1996 study team found that many of these problems still exist, because 
the Licensee had not implemented past recommendations in a coordinated 
and effective manner. The review also found that a concurrent lack of 
commitment to and accountability in implementing corrective actions had 
resulted in a continuing failure to proactively resolve emerging 
issues. It commented that this situation was compounded by the general 
inability on the part of individual Licensee managers to admit when 
they are in error. All of these factors have contributed to a strained 
and ineffective relationship between management and some employees. 
Finally, the study team concluded that the effectiveness of the NSCP 
has been historically undermined by a lack of executive management 
support.
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    \3\ Millstone Employee Concerns Assessment Team Report, dated 
January 29, 1996.
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    In May 1996, the Nuclear Committee of the Licensee's Board of 
Trustees established a Nuclear Committee Advisory Team (NCAT) to 
evaluate the performance of the Licensee's nuclear program. A 
Fundamental Cause Assessment Team (FCAT) was also formed to evaluate 
whether management actions are effectively addressing the causes of 
declining performance.
    The FCAT identified 4 the following fundamental causes of the 
decline in performance:
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    \4\ Report of the Fundamental Cause Assessment Team, dated July 
12, 1996.
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     The top level of the Licensee's management did not 
consistently exercise effective leadership and articulate and implement 
appropriate vision and direction;
     The nuclear organization did not establish and maintain 
high standards and expectations; and
     The nuclear organization's leadership, management, and 
interpersonal skills were weak.
    The NRC has also performed several assessments of the way that the 
Licensee has dealt with technical and safety concerns raised at the 
Millstone facilities and the manner in which the Licensee has treated 
those employees who have raised safety concerns. On December 12, 1995, 
the NRC staff initiated an historical review of both the Licensee's and 
the NRC's handling of Millstone employee concerns and allegations, 
covering the past 10 years.5 The staff's review included indepth 
case studies of selected employees' concerns and allegations to 
identify root causes, common patterns between cases, and lessons 
learned. The Millstone Independent Review Group reported: 6
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    \5\ Millstone Independent Review Group--Handling of Employee 
Concerns and Allegations at Millstone Nuclear Power Station, Units 
1, 2, and 3. Prior NRC studies are discussed in this report.
    \6\ Transcribed public meetings to report the review group 
findings, held on August 7 and 8, 1996 in the vicinity of the plant.
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    1. A large number of allegations (an average of 42 per year) were 
being raised to the NRC, which indicated that the Licensee's own 
programs were not effective in resolving its employee concerns.
    2. The Licensee's employees believed that the managers responsible 
for discrimination were not appropriately disciplined.
    3. The Licensee's management frequently identified problems but was 
ineffective in implementing corrective actions.
    4. The Licensee's management was reluctant to admit mistakes.
    5. The Licensee's managers lacked skill in handling concerns and 
were generally not supportive of their employees raising concerns. 
There was a lack of communication along the chain of command and across 
parallel organizational lines.
    The Millstone Independent Review Group and the Licensee's recent 
internal reviews have produced consistent findings for which corrective 
actions have not yet been effectively implemented. It is clear that the 
licensee has not established a safety-conscious environment.

III

    In light of the foregoing, I have concluded that the Licensee must 
take action to correct and improve its handling of safety concerns 
raised by its employees so that the NRC can have confidence that 
concerns will be acted on promptly and adequately, and that employees 
who bring forth such concerns can do so without fear of retaliation or 
retribution.
    In this Order, the NRC directs that, prior to resumption of power 
operations, the Licensee shall develop, submit to the NRC, and 
implement a comprehensive plan for reviewing and dispositioning safety 
issues raised by the Licensee's employees and ensuring that employees 
who raise safety concerns are not subject to discrimination. 
Additionally, the Licensee shall retain an independent third-party, 
subject to the approval of the NRC, to oversee its implementation of 
its comprehensive plan. The employees of the third-party organization 
shall have unfettered site access after meeting the NRC's access 
authorization requirements.
    The independent third-party is to develop and submit for NRC 
approval

[[Page 58255]]

an oversight plan. The independent third-party shall monitor and 
oversee the Licensee's efforts to correct and prevent repetition of its 
past failures in its treatment of employee concerns and of those 
employees who raised such concerns. The oversight plan shall include 
observation and monitoring of the Licensee's activities, performance of 
technical and audit reviews, investigation of concerns, and assessment 
of changes in the Licensee's treatment of employee concerns as compared 
to past practices. This oversight must be comprehensive in scope and 
cover all NRC-regulated activities at the Millstone facilities. 
Recommendations are to be made to address the handling of specific 
concerns as well as the Licensee's programs and processes for handling 
concerns.
    The qualifications of the independent third-party must include the 
expertise necessary to audit technical reviews of employee concerns, 
monitor corrective actions, recognize technical weaknesses in 
approaches to concerns taken by the Licensee, audit and determine the 
adequacy of the Licensee's investigations into harassment, 
intimidation, and discrimination complaints, and conduct employee 
surveys to determine the views of the Licensee's employees on the 
success and completeness of these activities. The factors to be 
examined by the independent organization include actions taken or to be 
taken by the Licensee to create an environment in which employees of 
both the Licensee and onsite contractors are encouraged to raise 
concerns and the timeliness and thoroughness with which such concerns 
are reviewed and resolved, including how employees are informed of 
results. The third-party organization chosen to oversee the conduct of 
the Licensee's comprehensive plan must be independent of the Licensee, 
such that none of its members has had any direct, previous involvement 
with the activities at the Millstone Station that the organization will 
be overseeing.
    The independent third-party is to report concurrently to the NRC 
and Licensee, on at least a quarterly basis, the results of its 
oversight activities, including all findings and recommendations.
    After the NRC receives the Licensee's comprehensive plan and the 
independent third-party oversight plan, a notice of availability of the 
plans will be published in the Federal Register and one or more public 
meetings will be held to allow members of the public to comment on the 
plans. The results of the NRC review and public comments on the third-
party oversight plan will be forwarded to the Licensee and the 
independent third-party for evaluation and implementation as 
appropriate.

IV

    Accordingly, pursuant to Sections 103, 161b, 161i, 161o, 182 and 
186 of the Atomic Energy Act of 1954, as amended, and the Commission's 
regulations in 10 CFR 2.202 and 10 CFR Part 50, It is hereby ordered 
That, prior to restart of any Millstone units:
    1. Within 60 days from the date of this Order, the Licensee shall 
develop, submit for NRC review, and begin to implement a comprehensive 
plan for (a) reviewing and dispositioning safety issues raised by its 
employees and (b) ensuring that employees who raise safety concerns are 
not subject to discrimination. The comprehensive plan shall address the 
root causes of past performance failures as described in the Licensee's 
July 12, 1996 report of the Fundamental Cause Assessment Team and the 
NRC's September 1996 report of the Millstone Independent Review Group, 
with the objective of meeting a goal of achieving a safety-conscious 
environment.
    2. Within 30 days from the date of this Order, the Licensee shall 
submit, for NRC approval, a proposed independent, third-party 
organization to oversee implementation of the above comprehensive plan. 
The independent third-party shall be approved by the NRC and its 
activities, under this Order, are subject to continuing NRC oversight. 
The independent third-party shall oversee plan implementation by (a) 
observing and monitoring the Licensee's activities; (b) performing 
technical reviews; (c) auditing and investigating, when necessary, 
cases of alleged harassment, intimidation, and discrimination; (d) 
auditing and reviewing the Licensee's handling of employee safety 
concerns; and (e) assessing and monitoring the Licensee's performance. 
Within 30 days of the NRC's approval of the third-party, an oversight 
plan for conduct of this third-party oversight shall be developed by 
the third-party and forwarded for NRC review. NRC approval of the 
oversight plan is required prior to its implementation. Reports on 
oversight activities, findings, and recommendations shall be provided 
to both the licensee and the NRC at least quarterly following NRC 
approval of the oversight plan. The plan shall specify procedures for 
concurrent reporting of oversight activities, findings, and 
recommendations to the NRC and the Licensee. The Licensee will provide 
a response to each recommendation. The Licensee's comprehensive plan 
shall allow for revisions based upon the Licensee's experience in 
implementation of its plan and comments and recommendations of the 
independent third-party and/or the NRC.
    3. If the independent third-party receives allegations of safety 
concerns, it is to encourage the alleger to bring those concerns to the 
attention of the Licensee. If the alleger elects not to do so, the 
independent third-party is to encourage the alleger to report the 
concerns to the NRC. If the alleger does not elect to report the safety 
concerns to either the Licensee or the NRC, the independent third-party 
is to accept the allegation and forward it directly to the NRC. The 
independent third-party is to develop procedures for protecting the 
identity of any such allegers and limiting the disclosure of the 
allegers' identity to those with a need to know.7
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    \7\ Such procedures may not withhold the identity of any alleger 
or any information related to allegations from the NRC.
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    4. The plan for independent, third-party oversight will continue to 
be implemented until the Licensee demonstrates, by its performance, 
that the conditions which led to the requirement of that oversight have 
been corrected to the satisfaction of the NRC.

V

    The Director, Office of Nuclear Reactor Regulation, may, in 
writing, relax or rescind this Order upon demonstration by the Licensee 
of good cause.

VI

    In accordance with 10 CFR 2.202, the Licensee must, and any other 
person adversely affected by this Order may, submit an answer to this 
Order, and may request a hearing on this Order, within 20 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 
Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, 
Washington, D.C. 20555, and include a statement of good cause for the 
extension.
    The Licensee's answer may consent to this Order. Unless the answer 
consents to this Order, the answer shall, in writing and under oath or 
affirmation, specifically admit or deny each allegation or charge made 
in this Order and set forth the matters of fact or law on which the 
Licensee or any other person adversely affected relies and the reasons 
as to why the Order should not

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have been issued. Any answer or request for a hearing shall be 
submitted to the Director, Office of Nuclear Reactor Regulation, U.S. 
Nuclear Regulatory Commission, Washington, D.C. 20555, with a copy to 
the Commission's Document Control Desk, Washington, D.C. 20555. Copies 
shall also be sent to the Assistant General Counsel for Hearings and 
Enforcement at the same address, to the Regional Administrator, NRC 
Region I, 475 Allendale Road, King of Prussia, PA 19406-1415; and to 
the Licensee if the answer or hearing request is by a person other than 
the Licensee. If such a person requests a hearing, that person shall 
set forth with particularity the manner in which his or her interest is 
adversely affected by this Order and shall address the criteria set 
forth in 10 CFR 2.714(d).
    If a hearing is requested by the Licensee or a person whose 
interest is adversely affected, the Commission will issue an Order 
designating the time and place of any hearing. If a hearing is held, 
the issue to be considered at such hearing shall be whether this Order 
shall be sustained.
    In the absence of any request for a hearing, or written approval of 
an extension of time in which to request a hearing, the provisions 
specified in Section IV above shall be effective and final 20 days from 
the date of this Order without further Order or proceedings. If an 
extension of time for requesting a hearing has been approved, the 
provisions specified in Section IV shall be final when the extension 
expires if a hearing request has not been received.

    Dated at Rockville, Maryland, this 24th day of October 1996.

    For the Nuclear Regulatory Commission.
Frank J. Miraglia, Jr.,
Acting Director, Office of Nuclear Reactor Regulation.
[FR Doc. 96-28996 Filed 11-12-96; 8:45 am]
BILLING CODE 7590-01-P