[Federal Register Volume 61, Number 238 (Tuesday, December 10, 1996)]
[Notices]
[Pages 65088-65092]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31319]


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NUCLEAR REGULATORY COMMISSION

Policy and Procedure for Enforcement Actions; Policy Statement

AGENCY: Nuclear Regulatory Commission.

ACTION: Policy statement: Revision.

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SUMMARY: The Nuclear Regulatory Commission (NRC or Commission) is 
amending its General Statement of Policy and Procedure for Enforcement 
Actions (Enforcement Policy) to revise the list of enforcement matters 
on which the NRC staff must consult with the Commission, to modify the 
Policy to provide that most predecisional enforcement conferences will 
be open to public observation, to clarify the circumstances in which a 
licensee-identified violation will be treated as a non-cited violation, 
and consideration of risk in developing sanctions.

DATES: This revision is effective on December 10, 1996. Comments are 
due on or before January 9, 1997. The change to Part V of the 
Enforcement Policy concerning open predecisional enforcement 
conferences does not apply to conferences that were announced prior to 
the effective date of this revision.

ADDRESSES: Send written comments to: The Secretary of the Commission, 
U.S. Nuclear Regulatory Commission, Washington, DC 20555, ATTN: 
Docketing and Service Branch. Deliver comments to: 11555 Rockville 
Pike, Rockville, Maryland 20852, between 7:45 am and 4:15 pm, on 
Federal workdays. Copies of comments may be examined at the NRC Public 
Document Room, 2120 L Street, NW. (Lower-Level), Washington, DC.

FOR FURTHER INFORMATION CONTACT: James Lieberman, Director, Office of 
Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555 
(301) 415-2741.

SUPPLEMENTARY INFORMATION: The ``General Statement of Policy and 
Procedure for NRC Enforcement Actions'' (Enforcement Policy or Policy) 
was first issued on September 4, 1980. Since that time, the Enforcement 
Policy has been revised on a number of occasions. On June 30, 1995 (60 
FR 34381), the Enforcement Policy was revised in its entirety and was 
also published as NUREG-1600. The Policy primarily addresses violations 
by licensees and certain non-licensed persons, as discussed further in 
footnote 3 to Section I, Introduction and Purpose, and in Section X: 
Enforcement Action Against Non-licensees. As described below, the 
Commission is amending the Enforcement Policy to address issues 
regarding consultation with the Commission, open predecisional 
enforcement conferences, non-cited violations, and risk-significant 
violations.

Commission Consultation

    Most enforcement decisions are made at the NRC staff level. 
However, based on guidance in Section III of the Enforcement Policy 
``Responsibilities,'' certain cases require formal Commission 
consultation. The practice of Commission consultation has existed since 
the Enforcement Policy was first published as an interim Policy in 
1980. After 1980, the number of cases requiring this type of 
consultation has more than doubled. Most of the criteria for 
consultation were adopted many years ago, to address particular

[[Page 65089]]

Commissioner concerns or areas where the NRC staff had little 
experience. The NRC staff has had substantial experience in 
implementing the objectives of the Enforcement Policy. It is relatively 
rare that the Commission deviates from the recommended NRC staff 
approach. Thus, there is less need for mandatory Commission involvement 
in many enforcement matters.
    Based on these factors and considering the significant effort 
currently expended in providing Commission consultation on enforcement 
matters, the Commission has given the NRC staff more flexibility to 
decide what enforcement issues should be brought to the Commission's 
attention because of policy significance, controversy, or known 
Commission interest.
    Section III of the Enforcement Policy is being modified to delete 
the specific requirements for consultation with the Commission before 
the NRC staff issues enforcement actions involving material false 
statements, orders or civil penalties to unlicensed individuals, or 
civil penalties to licensed reactor operators. Because of the egregious 
nature of material false statement cases, it is logical that they would 
be considered very significant regulatory concerns and be categorized 
at Severity Level I and require Commission consultation on that basis 
(Section III(3) of the Enforcement Policy). The Commission believes 
that consultation regarding individual actions should be based on the 
merits of the particular case. Further, under the current Policy, civil 
penalties are not normally issued to unlicensed individuals or 
operators. These cases would receive Commission consultation at the 
request of the Executive Director for Operations (EDO). The Commission 
receives advance notification of all orders, including those issued to 
unlicensed individuals.
    In addition, consultation will no longer be required when the NRC 
staff exercises discretion under Section VII.B.2 1 and refrains 
from taking enforcement action for certain violations identified during 
extended shutdowns. The Commission will receive advance notification 
through Enforcement Notifications (ENs) for the first exercise of 
discretion for a plant meeting the criteria of Section VII.B.2. 
Notification, not consultation, will be required when the NRC staff 
exercises discretion under Section VII.A.1 in matters in which the 
civil penalty to be proposed deviates from more than two times the 
amount of the base civil penalty. However, item (2) of Section III of 
the Policy is being clarified to require consultation when the NRC 
staff proposes a civil penalty greater than 3 times the Severity Level 
I values shown in Table 1A for a single violation or problem. The NRC 
staff will continue to provide notification to the Commission for all 
civil penalties and orders.
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    \1\ After the issuance of NUREG-1525, Section VII.B.3 of the 
Enforcement Policy was renumbered as Section VII.B.2.
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Predecisional Enforcement Conferences

    Historically, the Enforcement Policy has provided that enforcement 
conferences are closed meetings between the NRC and licensees to 
exchange information on potential safety issues. Section V of the 
current Enforcement Policy states that conferences, ``are not normally 
open to the public observation.'' However, on July 10, 1992, the 
Commission established a 2-year trial program to determine if the 
Policy should be changed to make most enforcement conferences open to 
the public. On July 19, 1994, the NRC announced that the trial program 
would be continued until the Commission had acted on the enforcement 
review team's recommendations.
    The announcement of the trial program explained that the 
Commission's decision on whether to establish a permanent policy for 
making enforcement conferences open would be based on an assessment of 
the following criteria:
    (1) Whether the fact that the conference was open impacted the 
NRC's ability to conduct a meaningful conference and/or implement the 
NRC's enforcement program;
    (2) Whether the open conference impacted the licensee's 
participation in the conference;
    (3) Whether the NRC expended a significant amount of resources in 
making the conference public; and
    (4) The extent of public interest in opening the enforcement 
conference.
    Under the trial program, approximately 25 percent of all eligible 
enforcement conferences were open to public observation. Open 
enforcement conferences were conducted in each regional office and with 
various types of licensees. Members of the public attended 40 of the 
113 open conferences conducted. In most cases, three or fewer members 
of the public attended. The Commission received and evaluated comments 
from licensees and members of the public.
    The most significant concern in allowing public observation at 
enforcement conferences was that open conferences could inhibit open 
and candid discussions between the NRC and licensees, limit the free 
exchange of information, reduce conference effectiveness, and 
negatively impact the enforcement program. Although industry reiterated 
this concern during the trial program, the Commission has not found 
that open enforcement conferences conducted during the trial program 
were substantially less frank and open, nor was the NRC prevented from 
obtaining the information required to implement its enforcement 
program. In some cases, the NRC staff needed to ask licensees 
additional questions, but the information ultimately provided was 
always sufficient to meet predecisional enforcement conference goals.
    Opening predecisional enforcement conferences is consistent with 
the agency's principles of good regulation and normal agency policy 
(``Staff Meetings Open to the Public; Final Policy Statement,'' 59 FR 
48340; September 20, 1994). The intent of open conferences is not to 
maximize public attendance, but to provide the public with an 
opportunity to observe the regulatory process. Although making highly 
technical meetings open to the public exposes participants to the risk 
that information may be misunderstood or misconstrued, the Commission 
does not find that the risk outweighs the public confidence gained by 
allowing open observation of NRC predecisional enforcement conferences.
    After considering the impact on the NRC's ability to exercise its 
regulatory and safety responsibilities, the impact on the candor and 
openness of communications during enforcement conferences, the impact 
on NRC resources, and the benefit to the public, the Commission has 
decided to modify the Enforcement Policy to provide that most 
conferences will be open to public observation. However, as for any 
public meeting, the NRC retains the discretion to close the conference 
for a specific case. The criteria for closing conferences are currently 
addressed in Section V of the Enforcement Policy. With two additions, 
these criteria will continue to be used. The changes involve opening a 
conference if it is based on an NRC Office of Investigations (OI) 
report that has been publicly disclosed and providing flexibility to 
open or close a conference with the approval of the Executive Director 
for Operations. The Enforcement Policy will continue to emphasize that 
predecisional enforcement conferences are open for public observation 
and not participation consistent with the NRC's policy on open 
meetings. The change to the Enforcement Policy that opens predecisional 
enforcement conferences

[[Page 65090]]

will be applied to conferences for which the date is announced after 
the effective date of this revision.

Non-Cited Violations

    The Enforcement Policy provides examples of when discretion 
generally should be considered for departing from the normal approach 
under the Policy. Section VII.B.1. addresses non-cited violations 
(NCVs) which are used to recognize the existence of a legal violation 
but are not formal violations. NCVs are used to provide an incentive to 
licensees to identify and correct violations. Criterion 1.(a). in 
Section VII.B.1. is a Severity Level IV violation that was ``identified 
by the licensee, including identification through an event.''
    This discretion is normally used when the licensee identifies and 
corrects a non-recurring violation. However, this provision is not 
normally used for violations that meet the criteria for Severity Level 
III violations, and where the circumstances justify characterization at 
Severity Level IV. Such cases normally are the more significant 
Severity Level IV violations. In addition, the NRC has considered 
whether this exercise of discretion should normally be used in cases 
involving violations identified through an event. If the root cause of 
the event is obvious or the licensee had prior opportunity to identify 
the problem but failed to take action that would have prevented the 
event, the licensee should not be rewarded by the NRC's exercising 
discretion not to cite the violation. On the other hand, there may be 
cases when, notwithstanding a self-disclosing violation, the licensee 
demonstrated initiative in identifying the violation's root cause. In 
such a case, an NCV may be appropriate.
    In general, when the licensee's identification is through an event, 
discretion should only be exercised when the licensee has demonstrated 
initiative. Further, the violation should be cited if it caused the 
event, the cause is obvious, or a clear opportunity existed to identify 
the violation and take action to prevent the event. The Commission 
believes that the Enforcement Policy should be clarified by deleting 
the reference to identification through an event in the criterion in 
Section VII.B.1.(a) to make it clear that use of discretion is not 
automatic if the violation is identified through a self-disclosing 
event.

Risk-significant Violations

    In evaluating violations for enforcement, the higher the risk from 
a violation, the greater the severity level and sanction should be. 
However, the converse is not necessarily true; low risk should not 
necessarily result in no sanction or a minor violation being cited. 
This is because many violations, although having low risk significance, 
may indicate a broader problem, often indicative of a programmatic 
licensee failure to comply with NRC requirements and, therefore, have a 
high regulatory significance.
    The Enforcement Policy currently does not address risk explicitly, 
except in Section VII.A.1.e, which addresses the escalation of 
enforcement sanctions in situations when the excessive duration of a 
problem has resulted in a substantial increase in risk. Although there 
is inherent discretion in the Enforcement Policy to increase Severity 
Levels and sanctions based on risk, the Commission believes it is 
appropriate to modify the Policy to state the consideration of risk 
aspects more clearly.
    In analyzing risk, the NRC recognizes the uncertainties associated 
with risk assessment. Generally, qualitative rather than quantitative 
risk assessments are made given the number of variables associated with 
risk assessment. Risk should be a consideration in proposing 
enforcement actions, but not necessarily determinatative. In developing 
higher civil penalties, the Commission intends to consider, where 
appropriate, assessing separate civil penalties for each violation that 
is aggregated into a Severity Level II problem.
    Therefore, to provide sufficient discretion to be able to 
appropriately consider risk in enforcement decisions, Section IV of the 
Policy is being modified to state that in considering the significance 
of a violation, the NRC considers the technical significance, i.e., 
actual and potential consequences, and the regulatory significance; and 
that in evaluating the technical significance, risk is an appropriate 
consideration. Further, Section VII.A.1.(e) is being modified to state 
that exercise of discretion should be considered in situations where 
the violation has resulted in a substantial increase in risk, including 
cases in which the duration of the violation has contributed to the 
substantial increase.

Paperwork Reduction Act Statement

    This policy statement does not contain a new or amended information 
collection requirement subject to the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 et seq.). Existing requirements were approved by the 
Office of Management and Budget, approval number 3150-0011. The 
approved information collection requirements contained in this policy 
statement appear in Section VII.C.

Public Protection Notification

    The NRC may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless it displays a currently 
valid OMB control number.

Small Business Regulatory Enforcement Fairness Act

    In accordance with the Small Business Regulatory Enforcement 
Fairness Act of 1996, the NRC has determined that this action is not a 
major rule and has verified this determination with the Office of 
Information and Regulatory Affairs of OMB.
    Accordingly, the NRC Enforcement Policy is amended by revising 
Section III, the first paragraph in Section IV, Section V, and Sections 
VII.A.1.(e) and VII.B.1(a) to read as follows:

GENERAL STATEMENT OF POLICY AND PROCEDURE FOR NRC ENFORCEMENT ACTIONS

* * * * *

III. Responsibilities

    The Executive Director for Operations (EDO) and the principal 
enforcement officers of the NRC, the Deputy Executive Director for 
Nuclear Material Safety, Safeguards and Operations Support (DEDS), and 
the Deputy Executive Director for Nuclear Reactor Regulation, Regional 
Operations, and Research (DEDR), have been delegated the authority to 
approve or issue all escalated enforcement actions.4 The DEDS is 
responsible to the EDO for the NRC enforcement programs. The Office of 
Enforcement (OE) exercises oversight of and implements the NRC 
enforcement programs. The Director, OE, acts for the Deputy Executive 
Directors in enforcement matters in their absence or as delegated.
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    \4\  The term ``escalated enforcement action'' as used in this 
policy means a Notice of Violation or civil penalty for any Severity 
Level I, II, or III violation (or problem) or any order based upon a 
violation.
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    Subject to the oversight and direction of OE, and with the approval 
of the appropriate Deputy Executive Director, where necessary, the 
regional offices normally issue Notices of Violation and proposed civil 
penalties. However, subject to the same oversight as the regional 
offices, the Office of Nuclear Reactor Regulation (NRR) and the Office 
of Nuclear Material Safety and Safeguards (NMSS) may also issue Notices 
of Violation and proposed civil penalties for certain activities.

[[Page 65091]]

Enforcement orders are normally issued by a Deputy Executive Director 
or the Director, OE. However, orders may also be issued by the EDO, 
especially those involving the more significant matters. The Directors 
of NRR and NMSS have also been delegated authority to issue orders, but 
it is expected that normal use of this authority by NRR and NMSS will 
be confined to actions not associated with compliance issues. The 
Director, Office of the Controller, has been delegated the authority to 
issue orders where licensees violate Commission regulations by 
nonpayment of license and inspection fees.
    In recognition that the regulation of nuclear activities in many 
cases does not lend itself to a mechanistic treatment, judgment and 
discretion must be exercised in determining the severity levels of the 
violations and the appropriate enforcement sanctions, including the 
decision to issue a Notice of Violation, or to propose or impose a 
civil penalty and the amount of this penalty, after considering the 
general principles of this statement of policy and the technical 
significance of the violations and the surrounding circumstances.
    Unless Commission consultation or notification is required by this 
policy, the NRC staff may depart, where warranted in the public's 
interest, from this policy as provided in Section VII, ``Exercise of 
Enforcement Discretion.'' The Commission will be provided written 
notification of all enforcement actions involving civil penalties or 
orders. The Commission will also be provided notice the first time that 
discretion is exercised for a plant meeting the criteria of Section 
VII.B.2. In addition, the Commission will be consulted prior to taking 
action in the following situations (unless the urgency of the situation 
dictates immediate action):
    (1) An action affecting a licensee's operation that requires 
balancing the public health and safety or common defense and security 
implications of not operating with the potential radiological or other 
hazards associated with continued operation;
    (2) Proposals to impose a civil penalty greater than 3 times the 
Severity Level I values shown in Table 1A for a single violation or 
problem;
    (3) Any proposed enforcement action that involves a Severity Level 
I violation;
    (4) Any action the EDO believes warrants Commission involvement;
    (5) Any proposed enforcement case involving an Office of 
Investigations (OI) report where the NRC staff (other than the OI 
staff) does not arrive at the same conclusions as those in the OI 
report concerning issues of intent if the Director of OI concludes that 
Commission consultation is warranted; and
    (6) Any proposed enforcement action on which the Commission asks to 
be consulted.

IV. Severity of Violations

    Regulatory requirements 5 have varying degrees of safety, 
safeguards, or environmental significance. Therefore, the relative 
importance of each violation, including both the technical significance 
and the regulatory significance, is evaluated as the first step in the 
enforcement process. In considering the significance of a violation, 
the staff considers the technical significance, i.e., actual and 
potential consequences, and the regulatory significance. In evaluating 
the technical significance, risk is an appropriate consideration.
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    \5\ The term ``requirement'' as used in this policy means a 
legally binding requirement such as a statute, regulation, license 
condition, technical specification, or order.
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* * * * *

V. Predecisional Enforcement Conferences

    Whenever the NRC has learned of the existence of a potential 
violation for which escalated enforcement action appears to be 
warranted, or recurring nonconformance on the part of a vendor, the NRC 
may provide an opportunity for a predecisional enforcement conference 
with the licensee, vendor, or other person before taking enforcement 
action. The purpose of the conference is to obtain information that 
will assist the NRC in determining the appropriate enforcement action, 
such as: (1) a common understanding of facts, root causes and missed 
opportunities associated with the apparent violations, (2) a common 
understanding of corrective action taken or planned, and (3) a common 
understanding of the significance of issues and the need for lasting 
comprehensive corrective action.
    If the NRC concludes that it has sufficient information to make an 
informed enforcement decision, a conference will not normally be held 
unless the licensee requests it. However, an opportunity for a 
conference will normally be provided before issuing an order based on a 
violation of the rule on Deliberate Misconduct or a civil penalty to an 
unlicensed person. If a conference is not held, the licensee will 
normally be requested to provide a written response to an inspection 
report, if issued, as to the licensee's views on the apparent 
violations and their root causes and a description of planned or 
implemented corrective action.
    During the predecisional enforcement conference, the licensee, 
vendor, or other persons will be given an opportunity to provide 
information consistent with the purpose of the conference, including an 
explanation to the NRC of the immediate corrective actions (if any) 
that were taken following identification of the potential violation or 
nonconformance and the long-term comprehensive actions that were taken 
or will be taken to prevent recurrence. Licensees, vendors, or other 
persons will be told when a meeting is a predecisional enforcement 
conference.
    A predecisional enforcement conference is a meeting between the NRC 
and the licensee. Conferences are normally held in the regional offices 
and are normally open to public observation. Conferences will not 
normally be open to the public if the enforcement action being 
contemplated:
    (1) Would be taken against an individual, or if the action, though 
not taken against an individual, turns on whether an individual has 
committed wrongdoing;
    (2) Involves significant personnel failures where the NRC has 
requested that the individual(s) involved be present at the conference;
    (3) Is based on the findings of an NRC Office of Investigations 
report that has not been publicly disclosed; or
    (4) Involves safeguards information, Privacy Act information, or 
information which could be considered proprietary;
    In addition, conferences will not normally be open to the public 
if:
    (5) The conference involves medical misadministrations or 
overexposures and the conference cannot be conducted without disclosing 
the exposed individual's name; or
    (6) The conference will be conducted by telephone or the conference 
will be conducted at a relatively small licensee's facility.
    Notwithstanding meeting any of these criteria, a conference may 
still be open if the conference involves issues related to an ongoing 
adjudicatory proceeding with one or more intervenors or where the 
evidentiary basis for the conference is a matter of public record, such 
as an adjudicatory decision by the Department of Labor. In addition, 
notwithstanding the above normal criteria for opening or closing 
conferences, with the approval of the Executive Director for 
Operations, conferences may either be open or closed to the public 
after balancing the benefit of the public observation against

[[Page 65092]]

the potential impact on the agency's decision-making process in a 
particular case.
    The NRC will notify the licensee that the conference will be open 
to public observation. Consistent with the agency's policy on open 
meetings, ``Staff Meetings Open to Public,'' published September 20, 
1994 (59 FR 48340), the NRC intends to announce open conferences 
normally at least 10 working days in advance of conferences through (1) 
notices posted in the Public Document Room, (2) a toll-free telephone 
recording at 800-952-9674, (3) a toll-free electronic bulletin board at 
800-952-9676, and on the World Wide Web at the NRC Office of 
Enforcement homepage (www.nrc.gov/OE). In addition, the NRC normally 
will also issue a press release and notify appropriate State liaison 
officers that a predecisional enforcement conference has been scheduled 
and that it is open to public observation.
    The public attending open conferences may observe but not 
participate in the conference. It is noted that the purpose of 
conducting open conferences is not to maximize public attendance, but 
rather to provide the public with opportunities to be informed of NRC 
activities consistent with the NRC's ability to exercise its regulatory 
and safety responsibilities. Therefore, members of the public will be 
allowed access to the NRC regional offices to attend open enforcement 
conferences in accordance with the ``Standard Operating Procedures for 
Providing Security Support for NRC Hearings and Meetings,'' published 
November 1, 1991 (56 FR 56251). These procedures provide that visitors 
may be subject to personnel screening, that signs, banners, posters, 
etc., not larger than 18'' be permitted, and that disruptive persons 
may be removed. The open conference will be terminated if disruption 
interferes with a successful conference. NRC's Predecisional 
Enforcement Conferences (whether open or closed) normally will be held 
at the NRC's regional offices or in NRC Headquarters Offices and not in 
the vicinity of the licensee's facility.
    Members of the public attending open conferences will be reminded 
that (1) the apparent violations discussed at predecisional enforcement 
conferences are subject to further review and may be subject to change 
prior to any resulting enforcement action and (2) the statements of 
views or expressions of opinion made by NRC employees at predecisional 
enforcement conferences, or the lack thereof, are not intended to 
represent final determinations or beliefs.
    When needed to protect the public health and safety or common 
defense and security, escalated enforcement action, such as the 
issuance of an immediately effective order, will be taken before the 
conference. In these cases, a conference may be held after the 
escalated enforcement action is taken.

VII. Exercise of Discretion

* * * * *

A. Escalation of Enforcement Sanctions

* * * * *
    1. * * *
    (e) Situations when the violation results in a substantial increase 
in risk, including cases in which the duration of the violation has 
contributed to the substantial increase;
* * * * *

B. Mitigation of Enforcement Sanctions

* * * * *
    1. Licensee-Identified Severity Level IV Violations. The NRC, with 
the approval of the Regional Administrator or his or her designee, may 
refrain from issuing a Notice of Violation for a Severity Level IV 
violation that is documented in an inspection report (or official field 
notes for some material cases) and described therein as a Non-Cited 
Violation (NCV) provided that the inspection report includes a brief 
description of the corrective action and that the violation meets all 
of the following criteria:
    (a) It was identified by the licensee;
* * * * *
    Dated at Rockville, MD, this 4th day of December, 1996.

    For the Nuclear Regulatory Commission.
John C. Hoyle,
Secretary of the Commission.
[FR Doc. 96-31319 Filed 12-9-96; 8:45 am]
BILLING CODE 7590-01-P