United States Nuclear Regulatory Commission

Office of Public Affairs

Washington, DC 20555

Phone 301-415-8200 Fax 301-415-2234

Internet:opa@nrc.gov

No. 96-154 FOR IMMEDIATE RELEASE

(Thursday, October 24, 1996)

NRC ISSUES REPORT ON MILLSTONE ALLEGATIONS; REQUIRES

THIRD-PARTY OVERSIGHT OF EMPLOYEE CONCERNS

An independent Nuclear Regulatory Commission review has

concluded that the work environment and failures of licensee

management are primary reasons for continuing employee concerns

problems in the employee concerns program at the Millstone

nuclear station in Connecticut.

Concurrent with issuing the NRC team's report, the NRC has

issued an order that directs Northeast Utilities (NU) to devise

and implement a comprehensive plan for handling safety concerns

raised by Millstone employees and for assuring an environment

free from retaliation and discrimination.

The NRC also ordered NU to contract for an independent third

party to oversee its corrective action plan for the employee

concerns program. The independent third-party must have

expertise necessary to audit reviews of employee concerns,

monitor corrective actions, recognize weaknesses in approaches,

audit investigations into discrimination complaints, and conduct

employee surveys.

Further, the members of the independent third-party

organization must not have had any direct previous involvement

with activities at the Millstone Station, and the team members'

technical qualifications must be approved by the NRC, along with

its oversight plan.

Findings and recommendations of the third-party organization

will be reported in parallel to the licensee and to the NRC.

Oversight by the third-party group will continue until the

licensee demonstrates, by performance, that the conditions

leading to the NRC order have been corrected.

When developed, both NU's and third-party oversight plans

will be available for examination at the local Public Document

Rooms for Millstone: the Three Rivers Community Technical

College, Thames Valley Campus, 574 New London Turnpike, Norwich,

CT; the Waterford (CT) Public Library; and at the NRC's Public
Document Room, 2120 L Street, N.W., Washington, D.C. The plans

will also be discussed in one or more public meetings to allow

members of the public to review and comment on the plans before

implementation.

The basis for today's order is that, notwithstanding the NRC

regulatory actions over the past several years, the licensee has

not been effective in 1) its review and dispositioning of safety

issues raised by its employees, and 2) ensuring that employees

who bring safety concerns to its management can do so without

fear of retaliation.

The NRC review found that for several years dissenting views

were not tolerated or welcomed at Millstone. "This poor

environment has resulted in repeated instances of discrimination

and ineffective handling of employee concerns, and contributed to

Millstone being placed on the NRC's Watch List," the team

reported. It added: "None of the findings of this team are new.

Every problem identified during this review had been previously

identified to NU management. . . yet the same problems were

allowed to continue."

Recent licensee internal reviews have made similar findings

for which corrective action has not yet been effectively

implemented.

The NRC review also criticized the NRC's own process for

handling allegations at Millstone. Six main problem areas were

cited: inadequate sensitivity and responsiveness, inadequate

discrimination follow up, unclear enforcement, ineffective

inspection techniques and performance measures, cumbersome

NRC/Department of Labor interactions and ineffective

implementation of an allegation program.

Recommendations to improve NRC processes are being evaluated

in a separate paper and will be publicly released following

Commission review.

Any person adversely affected by the order to Northeast

Utilities may request a hearing within 20 days of its issuance.

The request should be submitted to the Director, Office of

Nuclear Reactor Regulation, Nuclear Regulatory Commission,

Washington, D.C. 20555.

The text of the order has been posted on the Internet at

this address: http://www.nrc.gov/OPA/reports.

An executive summary of the NRC review group report is

attached. News media may obtain a copy of the report by

contacting the NRC's Office of Public Affairs.

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Attachment:
As stated

EXECUTIVE SUMMARY

Since the late 1980's Millstone Nuclear Power Station

(Millstone Units 1, 2, and 3) has been the source of a high

volume of employee concerns and allegations related to safety of

plant operations and harassment and intimidation (H&I) of

employees. NRC has conducted numerous inspections and

investigations which have substantiated many of the employee

concerns and allegations. The licensee has been cited for

violations and escalated enforcement has been taken.

Notwithstanding these NRC actions, the licensee has not been

effective in handling many employee concerns or in implementing

effective corrective action for problems that have been

identified by concerned employees.

On December 12, 1995, the NRC Executive Director for

Operations (EDO) established a review group to conduct an

independent evaluation of the history of the licensee's and the

staff's handling of employee concerns and allegations related to

licensed activities at Millstone Station. A copy of the

Millstone Independent Review Group's (MIRG's) charter is attached

as Appendix 9.1. The charter directed the MIRG to critically

evaluate both the licensee's and NRC staff's effectiveness in

addressing Millstone-related employee concerns and allegations.

The MIRG was requested to identify root causes, common patterns

between cases, and lessons learned and recommend both plantspecific and programmatic corrective actions.

The MIRG determined that in general, an unhealthy work

environment, which did not tolerate dissenting views, and did not

welcome or promote a questioning attitude, has existed at

Millstone for at least several years. This poor environment has

resulted in repeated instances of discrimination and ineffective

handling of employee concerns. The vast majority of employee

concerns and allegations that were submitted at Millstone

represented little safety significance; however, many involved

potentially important procedural, tagging, or quality assurance

(QA) problems, and a few were ultimately determined to have

safety significance. The unhealthy work environment combined

with the significance of substantiated allegations contributed to

Millstone being placed on the NRC's watch list in January 1996.

Many of the cultural issues that lie at the root of the

company's problems had been recognized by NU management as early

as August 12, 1991. An NU Allegations Root Cause Task Group

issued a report on that date which highlighted the lack of

respect and trust between employees and their management, and

indicated insufficient management sensitivity to routine employee
concerns. Subsequently, an Independent Third Party Evaluation

contracted by NU, issued a report on May 1, 1995.

The report revealed that the old culture of the 1980's had

not been completely replaced by a culture encouraging the

identification of problems and a questioning attitude, and

attitudes impeding effective problem identification and

resolution persisted. Most recently NU's Millstone Employees

Concerns Assessment Report dated

January 29, 1996 reiterated many of the same problems. The

report highlighted an "arrogant" management style which had

further eroded Millstone employee trust and confidence and which

had contributed to NU's repeated failure to correct clearly

identified problems.

The MIRG identified seven principal root causes for

continued employee concern problems at Millstone. Specific root

causes included: ineffective problem resolution and performance

measures, insensitivity to employee needs, reluctance to admit

mistakes, inappropriate management style and support for

concerned employees, poor communications and teamwork, lack of

accountability, and ineffective NSCP implementation.

The team concluded that these root causes underscored a

common theme of top management failure to provide the dynamic and

visible leadership needed to bring about required, basic attitude

changes. None of the findings of this team are new. Every

problem identified during this review had been previously

identified to NU management, often by its own self-assessments,

yet the same problems continue. This single failure is viewed as

being at the core of Millstone's continuing employee concerns.

The team noted an increased management awareness of the need

for improvement in some of these areas, and was impressed with

the level of employee commitment to making significant positive

changes in the Millstone work environment, as evidenced by many

of the individuals interviewed.

The MIRG also identified six principal problem areas

associated with NRC processes for the past handling of

allegations at Millstone. Specific process problem areas

included inadequate sensitivity and responsiveness, inadequate

discrimination follow-up, unclear enforcement, ineffective

inspection techniques and performance measures, cumbersome NRC -

Department of Labor (DOL) interface, and ineffective allegation

program implementation. Each of these problems appeared to

involve one or more of the following elements: an inappropriate

attitude that allegations were a necessary burden which detracted

from more important responsibilities, an under-reaction to

discrimination claims, ineffective methods for assessing licensee

environments for raising safety concerns, and insufficient
appreciation of the potential for a chilling effect at Millstone.

The MIRG concluded that the process problem areas identified with

the past handling of allegations at Millstone have the potential

to apply agency-wide.

The team noted that many initiatives had been taken by NRC

to improve the process for handling allegations. Examples

included policy changes, improvements in enforcement guidance,

and other initiatives by OI and the Agency Allegation Advisor.

The team's preliminary findings were discussed in a private

meeting with representatives from the alleger community on the

morning of August 7, 1996. Following this meeting the team's

findings were discussed in a public exit meeting at the Millstone

site with NU officials in the afternoon of August 7, 1996, and

duplicated in an evening session held at the Hilton Inn in

Mystic, Connecticut on August 8, 1996 to accommodate individuals

who could not or did not attend the afternoon session. These

meetings solicited comments and were transcribed to facilitate

consideration of comments before completing the report.

The MIRG will send its recommendations for corrective action

to the EDO by separate correspondence for both NU root causes and

the potential agency-wide NRC process problems. It is the team's

understanding that the staff will consider this material in

evaluating the adequacy of NU recovery activities and future

improvements in the NRC process.

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