[Federal Register Volume 64, Number 26 (Tuesday, February 9, 1999)]
[Notices]
[Pages 6388-6391]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3093]


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NUCLEAR REGULATORY COMMISSION

[NUREG--1600, Rev.1]


Policy and Procedure for NRC Enforcement Actions; Revised 
Treatment of Severity Level IV Violations at Power Reactors

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 NRC Enforcement 
Actions,'' NUREG-1600, Rev.1, by adding Appendix C to the policy. This 
amendment revises the treatment of Severity Level IV violations at 
power reactors by: (1) Expanding the use of Non-Cited Violations (NCVs) 
to include Severity Level IV violations identified by the NRC; (2) 
providing that except under limited, defined circumstances, individual 
Severity Level IV violations normally will result in NCVs and not in 
Notices of Violation (NOVs); and (3) permitting NRC closure of most 
Severity Level IV violations based on their

[[Page 6389]]

having been entered into a licensee's corrective action program.

DATES: This action is effective March 11, 1999. Comments on this 
revision should be submitted within 30 days of publication in the 
Federal Register and will be considered by the NRC prior to the next 
Enforcement Policy revision.

ADDRESSES: Submit written comments to: David L. Meyer, Chief, Rules and 
Directives Branch, Division of Administrative Services, Office of 
Administration, Mail Stop: T6D59, U. S. Nuclear Regulatory Commission, 
Washington, DC 20555. Hand deliver comments to: 11555 Rockville, 
Maryland, between 7:30 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: Severity Level IV violations are defined in 
the NRC's Enforcement Policy as violations of more than minor concern 
which, if left uncorrected, could lead to a more serious concern. 
Violations at Severity Level IV, the least significant of the four 
severity levels established in the NRC Enforcement Policy, involve 
noncompliances with NRC requirements for which the associated risks are 
not significant. NOVs are issued pursuant to 10 CFR 2.201, and normally 
require a written response within 30 days addressing: (1) The reason 
for the violation or basis for disputing the violation; (2) corrective 
steps that have been taken and results achieved; (3) corrective steps 
that will be taken to avoid further violations; and (4) the date when 
full compliance will be achieved. The policy provides that NOVs need 
not require a response if all of the necessary information is already 
available on the docket. The policy also permits certain licensee-
identified Severity Level IV violations to be treated as Non-Cited 
Violations (NCVs), but only if the licensee has committed to corrective 
actions by the end of the inspection, including corrective action to 
prevent recurrence.
    In fiscal year (FY) 1997, power reactor licensees experienced a 
sharp increase in NOVs issued for Severity Level IV violations, from 
approximately 770 in FY 1996 to 1,400 in FY 1997. In FY 1998, 
approximately 1,300 Severity Level IV NOVs were issued. In a memorandum 
to the Commission dated July 31, 1998, the NRC staff attributed the 
increase, in part, to efforts to improve the quality and consistency of 
the inspection and enforcement programs and to increased emphasis on 
the nexus between safety and compliance, and not to a decline in the 
performance of power reactor licensees.
    In response to concerns about this increase, and its apparent 
contradiction with the substantial performance improvements of 
operating power reactors in the last two decades, the NRC initiated 
efforts to reconsider the treatment of Severity Level IV violations. In 
an August 25, 1998, memorandum to the Chairman, the Executive Director 
for Operations submitted a plan which included the objective of 
maintaining the NRC's ability to identify licensee problems in a timely 
manner and reducing unnecessary licensee burden associated with 
responding to Severity Level IV violations.
    The approach to enforcement of Severity Level IV violations, 
including the requirement to provide a written response to cited 
violations (those subject to an NOV) has essentially been unchanged 
since before the 1979 accident at Three Mile Island. Since that time, 
by almost all indicators, the overall performance of reactor licensees 
has substantially improved. Licensees have generally developed 
effective corrective action programs that cover not only safety-related 
activities under 10 CFR part 50, appendix B, but usually other 
activities regulated by the NRC (e.g., fire protection and physical 
security). In fact, findings of the NRC are generally only a small 
percentage of the issues, including noncompliances, identified by 
licensees and addressed in corrective action programs.
    From a safety perspective, NRC Severity Level IV findings generally 
are not the most important matters being addressed in a licensee's 
corrective action program. Consequently, in light of the requirement to 
develop a comprehensive corrective action plan to address recurrence 
and provide a response to the NRC within 30 days pursuant to 10 CFR 
2.201, an NOV may result in licensee priorities and activities that are 
inconsistent with a violation's relative safety significance. Thus, NRC 
findings may drive licensee priorities in their corrective action 
programs, rather than having the fundamental safety significance of the 
issue establish its priority. Additionally, requiring formal responses 
to Severity Level IV violations, which are included in a licensee's 
corrective action program subject to NRC inspection, may in most cases 
be an unnecessary administrative burden.
    As a preliminary step to addressing this concern, the Director of 
the NRC's Office of Enforcement issued Enforcement Guidance Memorandum 
98-006, dated July 27, 1998, to emphasize the provisions in the current 
Enforcement Policy that permit certain licensee-identified Severity 
Level IV violations to be treated as Non-Cited Violations (NCVs) and 
certain NOVs to be issued without requiring a written response. 
Preliminary data indicates that this guidance has resulted in a 
decrease in the number of cited NOVs and in cited NOVs requiring a 
response. Notwithstanding the results of this initiative, licensees 
must still address Severity Level IV violations with a higher priority 
than may be justified by their safety significance. Licensee action is 
required to provide information to the NRC to support treatment of 
violations as NCVs, or to avoid having to provide a formal response to 
an NOV. The current policy also requires that NOVs be issued for 
Severity Level IV violations identified by NRC inspectors.
    Severity Level IV violations represent a small fraction of issues 
identified by licensees and included in licensee corrective action 
programs. The current Enforcement Policy approach has resulted in 
licensees placing a higher priority on these violations than their risk 
significance would merit. Accordingly, corrective action program issues 
with relatively higher risk significance may, by default, have been 
assigned lower priorities. Since individual Severity Level IV 
violations by definition do not involve matters of significant risk, 
the staff believes that there may be a benefit to safety if licensees 
are able to prioritize the resolution of Severity Level IV violations 
based on their safety significance. This can be accomplished if most 
Severity Level IV violations are closed by the NRC based on their being 
entered into a licensee's corrective action program. NOVs will be 
reserved for those cases where the NRC considers it important to obtain 
a description of the licensee's corrective actions on the docket. These 
changes will enhance the ability of licensees to address issues in 
their corrective action programs in accordance with their safety and 
risk significance, and will reduce unnecessary administrative burden 
associated with Severity Level IV violations.
    Therefore, the NRC is revising its Enforcement Policy for power 
reactor licensees. The revised policy affects the treatment of 
individual Severity Level IV violations by: (1) Expanding the use of 
NCVs to include Severity Level IV violations identified by the NRC; (2)

[[Page 6390]]

providing that except under limited, defined circumstances, individual 
Severity Level IV violations normally will result in NCVs and not NOVs; 
and (3) permitting closure of most Severity Level IV violations based 
on their having been entered into a licensee's corrective action 
program.
    This revised enforcement approach is not intended to modify the 
NRC's emphasis on compliance with requirements. Severity Level IV 
violations will continue to be described in inspection reports as they 
are now, although the NRC will close these violations based on their 
being entered into the licensee's corrective action program rather than 
a complete understanding of the licensee's corrective actions. At the 
time a violation is closed in an inspection report, the licensee may 
not have completed its corrective actions or begun the process to 
identify the root cause and develop action to prevent recurrence. 
Licensee actions will be taken commensurate with the established 
priorities and processes of the licensee's corrective action program. 
The NRC inspection program will provide an assessment of the 
effectiveness of the corrective action program. If such inspections 
identify significant violations or programmatic deficiencies in a 
licensee's corrective action program, broader and more in depth 
inspections may be carried out to understand the extent of the problem. 
The NRC will monitor the licensee's restoration of its corrective 
action program. In addition to documentation in inspection reports, 
violations will continue to be entered into the Plant Issues Matrix 
(PIM) that the NRC maintains for each facility to assist in identifying 
declining performance and determining repetitiveness. The revised 
approach will allow licensees to dispute violations described as NCVs.
    The circumstances under which an NOV will be considered and a brief 
discussion of each follows. Any one of these will result in 
consideration of an NOV requiring a formal written response from a 
licensee. The decision to issue an NOV will be based on the merits of 
the case.
    1. The licensee failed to restore compliance within a reasonable 
time after a violation was identified.
    The purpose of this exception is to emphasize the need to take 
appropriate action to restore compliance, or take compensatory measures 
if compliance cannot be immediately restored, once a licensee becomes 
aware of a violation.
    2. The licensee did not place the violation into a corrective 
action program to address recurrence.
    The purpose of this exception is to emphasize the need to consider 
actions beyond those necessary to restore compliance and which may be 
necessary to prevent recurrence. Placing a violation into a corrective 
action program to prevent recurrence is fundamental to the NRC's 
ability to close out a violation in an inspection report without 
detailed information regarding the licensee's corrective actions. The 
licensee is expected to provide the NRC with a file reference 
evidencing that the violation has been placed in the corrective action 
program. This will assist the NRC should it review the particular 
violation as part of an NRC inspection of the effectiveness of the 
licensee's corrective action program. The NRC recognizes that there are 
violations that do not require substantial efforts to prevent 
recurrence. In such cases, a corrective action process that includes: 
(1) Restoring compliance, (2) evaluating the need for additional 
corrective actions to prevent recurrence, and (3) maintaining records 
that may be inspected at a later time, would be adequate to avoid an 
NOV.
    3. The violation is repetitive as a result of inadequate corrective 
action, and was identified by the NRC.
    The purpose of this exception is to emphasize the importance of 
effective corrective action to prevent recurrence and the importance of 
licensees identifying recurring issues. For the purposes of this 
exception, the term ``repetitive violation'' is consistent with its 
definition in the Enforcement Policy, provided that the previous 
violation is one that was described in an NRC inspection report or 
otherwise described in docketed information. This exception will be 
used in those cases where: (1) Corrective action for the previous 
violation had time to take effect and was deemed inadequate; or (2) 
corrective action for the previous violation wasn't taken in a time 
frame commensurate with its safety significance. An NOV will not result 
if, despite the violation's recurrence, the NRC found the licensee's 
corrective actions for the previous violation reasonable. In addition, 
this exception will be applied only to repetitive violations identified 
by the NRC so as to encourage licensee identification and correction of 
repetitive issues.1
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    \1\ Licensee-identified, non-willful repetitive violations will 
be cited only if the ineffectiveness of the licensee's corrective 
action program is significant enough to rise to Severity Level III. 
Before making a decision to issue such a Severity Level III 
violation, consideration will be given to additional inspection 
effort, issuance of Demands for Information, management meetings, 
predecisional enforcement conferences, and outcomes of performance 
assessments.
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    4. The violation was willful and is not subject to discretion 
pursuant to Section VII.B.1 of the Enforcement Policy.
    The purpose of this exception is to emphasize the importance of 
integrity and candor in carrying out licensed activities, as expressed 
in Section IV.C. of the Enforcement Policy. Nonetheless, certain 
licensee-identified willful violations (e.g., those involving the 
isolated acts of relatively low-level individuals, etc.) will remain 
eligible for treatment as NCVs, as they are under the current policy in 
Section VII.B.1. In addition, the NRC notes that willfulness may result 
in increasing the severity level of a violation; the use of this 
exception refers only to those situations where the significance of the 
willfulness does not justify an increase to Severity Level III, in 
which case escalated enforcement action will be considered.
    In recommending a revised enforcement approach, the NRC has not 
lost sight of the lessons of plants that have had ineffective 
corrective action programs resulting in deficient performance and, in 
some cases, extended shutdowns. Given the lower risk significance of 
Severity Level IV violations, the staff's inspection efforts should be 
focused on the overall effectiveness of the corrective action program 
and not on the licensee's actions taken for each such violation. The 
staff intends to utilize a ``smart'' sample of NRC and licensee-
identified findings in reviewing the effectiveness of corrective action 
programs. If such inspections identify significant violations or 
programmatic deficiencies in a licensee's corrective action program, 
broader and more in depth inspections may be carried out to understand 
the extent of the problem. The NRC will monitor the licensee's 
restoration of its corrective action program. The immediate changes 
necessary in the inspection program and associated training necessary 
to implement this approach are expected to be completed by early 1999.
    The NRC recognizes that additional Enforcement Policy changes may 
be considered as a result of ongoing efforts to make improvements to 
the inspection and performance assessment processes for power reactors. 
In addition, the NRC is considering additional changes to the 
Enforcement Policy and guidance documents to address issues such as the 
use of the term ``regulatory significance'' in determining severity 
levels, and further clarifying the threshold between Severity Level IV 
and ``minor'' violations, which are not normally described in 
inspection reports.
    This Enforcement Policy revision addresses only power reactor 
licensees

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because of the scope, formality and general effectiveness of their 
corrective action programs, and the extent of the NRC inspection effort 
associated with these facilities. However, the NRC notes that it is 
considering the feasibility of expanding this revised enforcement 
approach to other categories of licensees in the future.
    Since additional changes to the Policy may be necessary to address 
future changes to the reactor oversight process, a more risk-informed 
and performance-based regulatory process, and application to other 
categories of licensees, this approach for Severity Level IV violations 
involving power reactors is being implemented by adding Appendix C to 
the Enforcement Policy as an interim step. The staff intends to hold a 
public meeting to obtain views of stakeholders six months after 
implementation of this interim policy.

Paperwork Reduction Act

    This final policy statement does not amend information collection 
requirements that are subject to the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 et seq.). These requirements were approved by the 
Office of Management and Budget, approval number 3150-0136.

Public Protection Notification

    If an information collection does not display a currently valid OMB 
control number, the NRC may not conduct or sponsor, and a person is not 
required to respond to, the information collection.

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 adding 
Appendix C as follows:

GENERAL STATEMENT OF POLICY AND PROCEDURE FOR NRC ENFORCEMENT ACTIONS

Table of Contents

* * * * *
Appendix B: Supplements--Violation Examples
Appendix C: Interim Enforcement Policy for Severity Level IV 
Violations Involving Activities of Power Reactors
* * * * *

Appendix C: Interim Enforcement Policy for Severity Level IV Violations 
Involving Activities of Power Reactor Licensees

    The Commission is issuing this Appendix to revise its policy 
with respect to Severity Level IV violations at power reactors. This 
is being issued as an appendix to the policy and characterized as 
interim because the Commission expects to make additional changes to 
its Enforcement Policy as a result of the efforts to improve its 
inspection and performance assessment programs.
    This Appendix revises the NRC's treatment of individual Severity 
Level IV violations at power reactors by: (1) Expanding the use of 
Non-Cited Violations (NCVs) to include Severity Level IV violations 
identified by the NRC; (2) providing that except under limited, 
defined circumstances, individual Severity Level IV violations 
normally will result in NCVs and not Notices of Violation (NOVs); 
and (3) permitting NRC closure of most Severity Level IV violations 
based on their having been entered into a licensee's corrective 
action program.
    This revised enforcement approach is not intended to modify the 
NRC's emphasis on compliance with requirements. Severity Level IV 
violations will continue to be described in inspection reports as 
they are now, although the NRC will close these violations based on 
their being entered into the licensee's corrective action program 
rather than a complete understanding of the licensee's corrective 
actions. At the time a violation is closed in an inspection report, 
the licensee may not have completed its corrective actions or begun 
the process to identify the root cause and develop action to prevent 
recurrence. Licensee actions will be taken commensurate with the 
established priorities and processes of the licensee's corrective 
action program. The NRC inspection program will provide an 
assessment of the effectiveness of the corrective action program. In 
addition to documentation in inspection reports, violations will 
continue to be entered into the Plant Issues Matrix (PIM) that the 
NRC maintains for each facility to assist in identifying declining 
performance and determining repetitiveness. The revised approach 
will allow licensees to dispute violations described as NCVs.
    Because the NRC will not normally obtain a written response from 
licensees describing actions taken to restore compliance and prevent 
recurrence of Severity Level IV violations, this revised enforcement 
approach places greater NRC reliance on licensee corrective action 
programs. Therefore, notwithstanding the normal approach of treating 
most Severity Level IV violations as NCVs, the NRC has identified 
four circumstances in which a written response to a Severity Level 
IV violation may be important. Any one of the following 
circumstances will result in consideration of an NOV requiring a 
formal written response from a licensee.
    1. The licensee failed to restore compliance within a reasonable 
time after a violation was identified.
    2. The licensee did not place the violation into a corrective 
action program to address recurrence.
    3. The violation is repetitive as a result of inadequate 
corrective action, and was identified by the NRC.
    4. The violation was willful and is not subject to discretion 
pursuant to Section VII.B.1 of the Enforcement Policy.
    To the extent the NRC Enforcement Policy is not modified by the 
above, the Policy remains applicable to power reactor licensees.

    Dated at Rockville, Maryland, this 3rd day of February, 1999.

    For the Nuclear Regulatory Commission.
Annette Vietti-Cook,
Secretary of the Commission.
[FR Doc. 99-3093 Filed 2-8-99; 8:45 am]
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