[Federal Register Volume 62, Number 29 (Wednesday, February 12, 1997)]
[Notices]
[Pages 6677-6680]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3465]


      
      

  Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / 
Notices  

[[Page 6677]]



NUCLEAR REGULATORY COMMISSION

[NUREG-1600]


Policy and Procedure for Enforcement Actions; Policy Statement

AGENCY: Nuclear Regulatory Commission.

ACTION: Policy Statement; amendment.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is amending its 
General Statement of Policy and Procedure for Enforcement Actions 
(Enforcement Policy) to modify Supplement VI, ``Fuel Cycle and 
Materials Operations,'' as well as to reflect recent NRC organizational 
changes. The Supplement VI amendment is warranted to reflect experience 
gained through fuel cycle enforcement actions and as a result of the 
Commission's recently designated responsibility for jurisdiction over 
the Gaseous Diffusion Plants (GDPs). The Enforcement Policy is also 
being amended to establish base civil penalties for GDPs. By a separate 
action published in this issue in the Federal Register, the Commission 
has issued a final rule amending the current regulations that govern 
GDPs. The revision to the Enforcement Policy reflects those amendments.
    In addition, the Enforcement Policy is being amended to reflect 
recent NRC organizational changes. These changes redesignate which NRC 
officials are delegated the responsibility for performing certain 
enforcement functions. A clarification is also being made to remove 
ambiguity as to when the Commission is to be consulted prior to 
issuance of certain actions proposing civil penalties.

DATES: This amendment is effective on February 12, 1997. Comments are 
due on or before March 14, 1997.

ADDRESSES: Send written comments to: The Secretary of the Commission, 
U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. ATTN: 
Docketing and Service Branch. 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.

FOR FURTHER INFORMATION CONTACT: James Lieberman, Director, Office of 
Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555-
0001, (301) 415-2741.

SUPPLEMENTARY INFORMATION:
    The Commission's Enforcement Policy was first issued on September 
4, 1980. The Enforcement Policy is published as NUREG-1600, ``General 
Statement of Policy and Procedure for NRC Enforcement Actions (60 FR 
34381; June 30, 1995).'' The Enforcement Policy has been amended on a 
number of occasions, most recently on October 18, 1996 (61 FR 54461). 
As a result of experience gained through fuel cycle enforcement actions 
and amendments to 10 CFR part 76 being published today as a final 
regulation, an amendment to the Enforcement Policy is warranted to 
provide guidance on categorizing potential violations of 10 CFR part 76 
and establish base civil penalties for violation of part 76. This 
amendment to the Enforcement Policy is being issued concurrently with 
the new rule.

Base Civil Penalties

    Table 1A of the policy, which establishes base civil penalties for 
different types of licensees, is being modified to add GDPs to category 
``a.'' The amended table will provide that the base civil penalty for a 
Severity Level I violation of the Commission's requirements by a GDP 
will be at the statutory limit of $110,000. In accordance with Table 
1B, base civil penalties for Severity Level II and III violations are 
lesser amounts. In determining the proper civil penalty amount, the 
Commission considered the structures of these tables, which generally 
take into account the gravity of the violation as a primary 
consideration and the ability to pay as a secondary consideration.
    Generally, operations involving greater nuclear material 
inventories and greater potential consequences to the public and to 
workers receive higher civil penalties. In the case of GDPs, there are 
large numbers of workers at the sites, significant source term present 
(i.e., inventory of licensed material), and various chemical and toxic 
substances used as part of the GDPs operations. Therefore, in the event 
of an accident, there is the potential for significant radiological and 
non-radiological hazards to members of the public, including workers, 
and the environment.
    With regard to the secondary factor of ability to pay, it is not 
the NRC's intention that the economic impact of a civil penalty be so 
severe that it puts the licensee or certificate holder out of business 
1 or adversely affects a licensee's or certificate holder's 
ability to safely conduct licensed activities. The deterrent effect of 
civil penalties is best served when the amount of penalties take into 
account a licensee's or certificate holder's ability to pay. In this 
case, issuing a civil penalty of less than $110,000 to the Corporation 
for a significant violation would be disproportionate to the 
Corporation's significant revenues. In other words, a civil penalty of 
$110,000 for a Severity Level I violation would be financially 
appropriate, but not financially crippling. In addition, a penalty 
based on this amount should get more attention from the Corporation and 
should have a greater deterrent effect.
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    \1\ Orders, rather than civil penalties, are used when the 
intent is to suspend or terminate licensed activities.
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    Given the financial resources of GDPs, it is appropriate to utilize 
significant civil penalties to provide an effective deterrence from 
violating the Commission's requirements such that the likelihood of 
performance necessitating a shutdown order would be minimal. 
Accordingly, a base civil penalty of $110,000 is appropriate in view of 
the potential consequences during an accident and the ability to pay. 
In addition, establishing the base civil penalty at the statutory limit 
would provide, at the outset, a clear message concerning the cost of 
noncompliance and additional motivation to maintain safety and 
compliance.

Severity Levels

    The policy recognizes that regulatory requirements 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 regulatory 
significance. Supplement VI, ``Fuel Cycle and Materials Operations,'' 
is being amended to provide additional examples for categorizing the 
severity levels of violations.
    The changes are:
Severity Level I
    1. Example A.5, which is being added to Supplement VI, is 
consistent with Supplement I guidance. This example is applicable for 
the Gaseous Diffusion Plants (GDPs) because other fuel facilities do 
not have Technical Safety Requirements (TSRs). Safety limits are those 
bounds within which the process variables must be maintained for 
adequate control of the operation and that must not be exceeded in 
order to protect the integrity of the physical

[[Page 6678]]

system that is designed to guard against the uncontrolled release of 
radioactivity.
    2. Example A.6 is being added to Supplement VI to emphasize that a 
significant injury or loss of life due to a loss of control over 
licensed or certified activities, including chemical processes that are 
integral to the licensed or certified activity, whether radioactive 
material is released or not, is of very significant regulatory concern. 
This concern exists because an actual impact to the health and safety 
of the public or workers has occurred from activities related to the 
processing of radioactive material.
Severity Level II
    1. Example B.4 is being added to Supplement VI to emphasize that, 
although less significant than Example A.3 in Supplement VI, the 
absence of all the criticality safety controls for a single anticipated 
or unanticipated nuclear criticality scenario is of very significant 
regulatory concern when the availability of fissile material makes a 
nuclear criticality accident possible.
    2. Example B.5 is being added to Supplement VI to underscore that 
events which do not involve actual significant injuries or loss of 
life, but reasonably could have if circumstances had been different, 
are considered of very significant regulatory concern.
Severity Level III
    1. Example C.5 is being modified in Supplement VI so that it is 
consistent with Supplement IV guidance. The NRC considers that a 
substantial potential for exposures, radiation levels, contamination 
levels, or releases (including releases of toxic material) caused by 
the failure to comply with NRC regulations or with procedures 
established to comply with license conditions to be a significant 
regulatory concern because it could have serious consequences to the 
public and licensee employees.
    2. Example C.12 is being added to Supplement VI to emphasize that 
the failure of a certified facility to comply with a limiting condition 
for operation is considered a significant regulatory concern. This 
example is similar to Supplement I guidance and has been selected for 
the GDPs because other fuel cycle facilities do not have TSRs.
    3. Example C.13 is being added to Supplement VI to emphasize that 
the loss of defense-in-depth over licensed or certified activities is 
considered a significant regulatory concern. This example is consistent 
with Supplement I guidance and is applicable to both fuel cycle and 
gaseous diffusion operations.
    4. Example C.14, which is consistent with Supplement I guidance, is 
being added to Supplement VI. This example is generally applicable to 
the fuel cycle facilities.
    5. Example C.15 is being added to Supplement VI. The failure to 
meet the requirements of 10 CFR 76.68 is significant because of the 
importance of certificate holders using the required process for 
maintaining and operating the facilities in accordance with the design 
and procedures described in their safety analysis report when there is 
uncertainty as to whether an unreviewed safety question is present. An 
after-the-fact evaluation that demonstrates that an unreviewed safety 
question was not involved would, in general, not mitigate the 
regulatory significance of failing to perform an appropriate evaluation 
prior to implementation of the change.
    6. Example C.16 is being added to Supplement VI to emphasize that 
adequate control over vendors or contractors performing safety-related 
work or providing safety-related services is a significant regulatory 
concern. This example amplifies the NRC's concern that all safety-
related activities, whether performed by the certificate holder or by 
one of its contractors, be conducted in accordance with the 
requirements in the application, TSRs and certificates.
    7. Example C.17, which is consistent with the Supplement I 
guidance, is being added to Supplement VI. This example points out that 
equipment failures caused by inadequate or improper maintenance that 
substantially complicates recovery from a plant transient is a 
significant regulatory concern.
    8. Example C.18 is being added to Supplement IV. This example 
indicates that the absence of all but one criticality safety control 
for a single anticipated or unanticipated nuclear criticality scenario 
is a significant regulatory concern when a critical mass of fissile 
material was present or reasonably available, because a nuclear 
criticality accident was possible.
Severity Level IV
    1. Although less significant than the above examples, examples D.5 
through D.8 are being added to Supplement VI to stress that such 
failures are more than a minor concern because they could lead to a 
more serious concern if left uncorrected.

Organizational Changes

    In addition to the above changes, recent NRC organizational changes 
have redistributed certain staff functions reporting to the Executive 
Director for Operations. Under the previous organization, the Deputy 
Executive Director for Nuclear Material Safety, Safeguards, and 
Operations Support (DEDS) was delegated the authority to approve and/or 
issue escalated enforcement actions associated with licensees of the 
Office of Nuclear Material Safety and Safeguards (NMSS). Similarly, the 
Deputy Executive Director for Nuclear Reactor Regulation, Regional 
Operations, and Research (DEDR) was delegated the authority to approve 
and/or issue escalated enforcement actions associated with licensees of 
the Office of Nuclear Reactor Regulation (NRR). Based on this 
distribution of functions, these two Deputy Executive Directors were 
designated as the principal enforcement officers of the NRC.
    The NRC organizational changes have replaced the previous two 
Deputy Executive Director positions with three new Deputy Executive 
Director positions. Under the new organizational arrangement, the NRC 
Office of Enforcement (OE) reports to the Deputy Executive Director for 
Regulatory Effectiveness, Program Oversight, Investigations, and 
Enforcement (DEDO), and NMSS and NRR both report to the Deputy 
Executive Director for Regulatory Programs (DEDR). This change in 
reporting responsibilities consolidates the technical office oversight 
under the new DEDR, and redesignates a single deputy, the DEDO, as the 
NRC's principal enforcement officer.
    Consistent with this change, the NRC Enforcement Policy is being 
modified to replace all previous references to either Deputy Executive 
Director with references to the DEDO. As such, the Enforcement Policy 
will designate the DEDO as having the authority to approve and/or issue 
escalated enforcement actions associated with either NRR or NMSS 
licensees. These changes will be reflected in the amendment to NUREG-
1600.

Clarification

    The Commission previously published (61 FR 65088, December 10, 
1996) changes to the Enforcement Policy concerning consultation with 
the Commission prior to issuance of enforcement actions that proposed a 
civil penalty more than three times the Severity Level value shown in 
Table 1A for a single violation. The Commission is re-publishing that 
portion of the Policy (Section III.2) with slightly revised language to 
remove ambiguity and make clear that the requirement applies to a 
single violation or problem and not the total of multiple penalties

[[Page 6679]]

that may be proposed in one enforcement action. This is consistent with 
the Commission's original understanding and intent.

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 3150-0136. 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, Office of Management and Budget.
    Accordingly, the NRC Enforcement Policy is amended by:
    a. Changing the first paragraph under Section III, 
``Responsibilities,'' by designating the principal enforcement officer 
of the NRC as ``the Deputy Executive Director for Regulatory 
Effectiveness, Program Oversight, Investigations, and Enforcement 
(DEDO), hereafter referred to as the Deputy Executive Director,'' and 
deleting the references to the former Deputy Executive Director for 
Nuclear Material Safety, Safeguards, and Operations Support (DEDS) and 
the former Deputy Executive Director for Nuclear Reactor Regulation, 
Regional Operations, and Research (DEDR).
    b. Revising all subsequent references to ``the appropriate Deputy 
Executive Director'' to read ``the Deputy Executive Director.''
    c. Revising Section III, ``Responsibilities,'' Section VI, 
``Enforcement Actions,'' Subsection B., Table 1A, Category a., and 
Supplement VI, ``Fuel Cycle and Materials Operations,'' as follows:

General Statement of Policy and Procedure for NRC Enforcement 
Actions

* * * * *

III. Responsibilities

* * * * *
    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):
* * * * *
    (2) Proposals to impose a civil penalty for a single violation or 
problem that is greater than 3 times the Severity Level I value shown 
in Table 1A for that class of licensee;
* * * * *

VI. Enforcement Actions

* * * * *
B. Civil Penalty

                     Table 1A--Base Civil Penalties                     
                                                                        
                                                                        
                                                                        
a. Power reactors and gaseous diffusion plants.............     $110,000
b. Fuel fabricators, industrial processors, and independent             
 spent fuel and monitored retrievable storage installations       27,500
c. Test reactors, mills and uranium conversion facilities,              
 contractors, vendors, waste disposal licensees, and                    
 industrial radiographers..................................       11,000
d. Research reactors, academic, medical, or other material              
 licensee \1\..............................................        5,500
                                                                        
\1\ This applies to nonprofit institutions not otherwise categorized in 
  this table, mobile nuclear services, nuclear pharmacies, and physician
  offices.                                                              

* * * * *

Supplement VI--Fuel Cycle and Materials Operations

    This supplement provides examples of violations in each of the four 
severity levels as guidance in determining the appropriate severity 
level for violations in the area of fuel cycle, gaseous diffusion 
plants, and materials operations.
A. Severity Level I--Violations involving for example:
* * * * *
    3. A nuclear criticality accident;
    4. A failure to follow the procedures of the quality management 
program, required by 10 CFR 35.32, that results in a death or serious 
injury (e.g., substantial organ impairment) to a patient;
    5. A safety limit, as defined in 10 CFR 76.4, the Technical Safety 
Requirements, or the application being exceeded; or
    6. Significant injury or loss of life due to a loss of control over 
licensed or certified activities, including chemical processes that are 
integral to the licensed or certified activity, whether radioactive 
material is released or not.
B. Severity Level II--Violations involving for example:
* * * * *
    2. A system designed to prevent or mitigate a serious safety event 
being inoperable;
    3. A substantial programmatic failure in the implementation of the 
quality management program required by 10 CFR 35.32 that results in a 
misadministration;
    4. A failure to establish, implement, or maintain all criticality 
controls (or control systems) for a single nuclear criticality scenario 
when a critical mass of fissile material was present or reasonably 
available, such that a nuclear criticality accident was possible; or
    5. The potential for a significant injury or loss of life due to a 
loss of control over licensed or certified activities, including 
chemical processes that are integral to the licensed or certified 
activity, whether radioactive material is released or not (e.g., 
movement of liquid UF6 cylinder by unapproved methods).
C. Severity Level III--Violations involving for example:
    1. A failure to control access to licensed materials for radiation 
protection purposes as specified by NRC requirements;
* * * * *
    5. A substantial potential for exposures, radiation levels, 
contamination levels, or releases, including releases of toxic material 
caused by a failure to comply with NRC regulations, from licensed or 
certified activities in excess of regulatory limits;
* * * * *
    10. A failure to receive required NRC approval prior to the 
implementation of a change in licensed activities that has radiological 
or programmatic significance, such as, a change in ownership; lack of 
an RSO or replacement of an RSO with an unqualified individual; a 
change in the

[[Page 6680]]

location where licensed activities are being conducted, or where 
licensed material is being stored where the new facilities do not meet 
safety guidelines; or a change in the quantity or type of radioactive 
material being processed or used that has radiological significance;
    11. A significant failure to meet decommissioning requirements 
including a failure to notify the NRC as required by regulation or 
license condition, substantial failure to meet decommissioning 
standards, failure to conduct and/or complete decommissioning 
activities in accordance with regulation or license condition, or 
failure to meet required schedules without adequate justification;
    12. A significant failure to comply with the action statement for a 
Technical Safety Requirement Limiting Condition for Operation where the 
appropriate action was not taken within the required time, such as:
    (a) In an autoclave, where a containment isolation valve is 
inoperable for a period in excess of that allowed by the action 
statement; or
    (b) Cranes or other lifting devices engaged in the movement of 
cylinders having inoperable safety components, such as redundant 
braking systems, or other safety devices for a period in excess of that 
allowed by the action statement;
    13. A system designed to prevent or mitigate a serious safety 
event:
    (a) Not being able to perform its intended function under certain 
conditions (e.g., safety system not operable unless utilities 
available, materials or components not according to specifications); or
    (b) Being degraded to the extent that a detailed evaluation would 
be required to determine its operability;
    14. Changes in parameters that cause unanticipated reductions in 
margins of safety;
    15. A significant failure to meet the requirements of 10 CFR 76.68, 
including a failure such that a required certificate amendment was not 
sought;
    16. A failure of the certificate holder to conduct adequate 
oversight of vendors or contractors resulting in the use of products or 
services that are of defective or indeterminate quality and that have 
safety significance;
    17. Equipment failures caused by inadequate or improper maintenance 
that substantially complicates recovery from a plant transient; or
    18. A failure to establish, maintain, or implement all but one 
criticality control (or control systems) for a single nuclear 
criticality scenario when a critical mass of fissile material was 
present or reasonably available, such that a nuclear criticality 
accident was possible.
D. Severity Level IV--Violations involving for example:
* * * * *
    2. Other violations that have more than minor safety or 
environmental significance;
    3. Failure to follow the quality management (QM) program, including 
procedures, whether or not a misadministration occurs, provided the 
failures are isolated, do not demonstrate a programmatic weakness in 
the implementation of the QM program, and have limited consequences if 
a misadministration is involved; failure to conduct the required 
program review; or failure to take corrective actions as required by 10 
CFR 35.32;
    4. A failure to keep the records required by 10 CFR 35.32 or 35.33;
    5. A less significant failure to comply with the Action Statement 
for a Technical Safety Requirement Limiting Condition for Operation 
when the appropriate action was not taken within the required time;
    6. A failure to meet the requirements of 10 CFR 76.68 that does not 
result in a Severity Level I, II, or III violation;
    7. A failure to make a required written event report, as required 
by 10 CFR 76.120(d)(2); or
    8. A failure to establish, implement, or maintain a criticality 
control (or control system) for a single nuclear criticality scenario 
when the amount of fissile material available was not, but could have 
been sufficient to result in a nuclear criticality.
* * * * *
    Dated at Rockville, Maryland, this 6th day of February, 1997.

    For the Nuclear Regulatory Commission.
John C. Hoyle,
Secretary of the Commission.
[FR Doc. 97-3465 Filed 2-11-97; 8:45 am]
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