OFFICE OF ENFORCEMENT

ANNUAL REPORT

Fiscal Year 2001

U.S. Nuclear Regulatory Commission
OE Annual Report

- CONTENTS -

Contents ................................................. i

Abstract ............................................... v

Introduction & Overview ............................................................. vii

Office of Enforcement ................................................................ xi

1. Enforcement Policy Changes ...................................................

A. October 4, 2000: Adjustment of Civil Monetary Penalties Based on Inflation ..... ......... I

B. December 18, 2000: Adjustment of Base Civil Penalties for Loss, Abandonment,

or Improper Transfer or Disposal of Sources . ........................................ I

2. Initiatives, Staff Guidance, & Implementation ......................

A. Reactor Oversight Process (ROP) .....................................

B. Discrimination Task Group .........................................

C. Enforcement Actions Against Individuals ..............................

D. Materials Program Support & Initiatives ...............................

E. Reactor Program Support & Initiatives .................................

F. Alternative Dispute Resolution .......................................

G. Increasing Public Confidence ........................................

H. Enforcement Guidance .............................................

I. Enforcement Training ..............................................

J. Audits ..........................................................

3. Escalated Enforcement and Administrative Items ...................

A. Escalated Notices of Violation (Without Civil Penalties) ..................

I

1 

3 

4 

4 

5 

6 

7 

8 

9 

10 

13 

14 

B. Civil Penalty Actions ....................................................... 14

C. Orders ................................... 14

D. Demands for Information ................................... 14

E. Escalated Enforcement Trends .14

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4. Cases Involving Exercise of Discretion .................. ...................... 15

5. Actions Against Individuals and Non-Licensees ................. . 19

A. Actions Against Licensed Individuals ............................................ 19

B. Actions Against Non-Licensed Individuals ........................................ 19

C. Actions Against Non-Licensees (Vendors, Contractors, and Certificate Holders) ..... ..... 19

6. Cases Involving Discrimination ............................................... 20

7. Hearing Activities ....................................................... 20

8. 10 CFR 2.206 Petitions ................................................... 20

9. Withdrawn Actions ....................................................... 20

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- TABLES1. Escalated Enforcement Items by Type of Licensee, Non-Licensee, or Individual ..... ......... 22

2. Civil Penalty Information ......................................................... 25

- FIGURES -

1. Escalated Enforcement For FY 2001 ................ ................................ 13

2. Timeliness Trends ............................................................ 13

3. Escalated Enforcement By Office . ................................................... 21

4. Escalated Enforcement By Type . ................................................... 23

5. Escalated Enforcement Trends . ..................................................... 27

6. Escalated Enforcement Based on Discrimination ....................................... 29

- APPENDICES -

A. Summary of Escalated Notices of Violation (Without Civil Penalties) ...................... 31

B. Summary of Proposed Civil Penalties ................. ............................... 45

C. Summary of Orders ............................................................ 51

D. Summary of Actions Against Individuals (Licensed & Non-Licensed) ...................... 53

E. Summary of Actions Against Non-Licensees (Vendors, Contractors, and Certificate Holders) ... 57

F. Summary of Hearing Activity . ..................................................... 59

G. Summary of 10 CFR 2.206 Activity .................. ............................... 61

H. Summary of Withdrawn Actions . ................................................... 63

I. Dispositioning of Enforcement Issues in a Risk-Informed Framework ...................... 65

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Abstract

This annual report of the U.S. Nuclear Regulatory Commission's Office of Enforcement

describes enforcement activities occurring during fiscal year 2001 (October 1, 2000 through

September 30, 2001). The report addresses significant policy changes, new initiatives, staff

guidance, and implementation issues for the agency's enforcement program. It also highlights

significant enforcement actions, and includes summaries of cases involving exercise of

discretion, discrimination and actions involving individuals. A variety of statistical tables and

figures are also included.

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Introduction & Overview

Starting with its predecessor, the Atomic Energy Commission, the NRC has always had some type of

enforcement program. The Commission's first public statement of policy on enforcement (the first

Enforcement Policy) was published in 1980. Since that time, the Enforcement Policy has been revised

numerous times to reflect experience and stakeholder input. Throughout these changes, two goals of the

enforcement program remain unchanged-to emphasize the importance of compliance with regulatory

requirements, and to encourage prompt identification, and prompt, comprehensive correction of

violations.

In recent years, numerous stakeholders have voiced concerns that the enforcement program should be

modified to have a more appropriate focus on those issues with the most safety significance.

Additionally, the enforcement program was viewed as driving the performance assessment process, being

overly burdensome, and being too reliant on civil penalties.

Starting in 1998, the enforcement program began a process of significant change. During the past fiscal

year, the enforcement program continued to change to support new initiatives in the agency's oversight

programs in conjunction with meeting the agency's performance goals of:

maintaining safety;

reducing unnecessary burden;

making NRC activities and decisions more effective, efficient, and realistic; and

increasing public confidence.

Changes in the enforcement program have stemmed from changes in inspection initiatives (e.g., reactor

oversight process (ROP)) as well as from changes within the enforcement program itself (e.g.,

eliminating the practice of aggregating multiple low significance violations into escalated enforcement,

and establishment of management-level review group to evaluate the processes for handling

discrimination issues). The enforcement program will continue to change based on new initiatives in the

inspection programs and new initiatives from within the enforcement program itself. This process

reflects the NRC's extensive efforts to address industry and other stakeholder concerns and demonstrates

the agency's commitment to more risk-informed, performance-based regulatory and enforcement

programs. I

Successful communication between both external and internal stakeholders is vital to ensure that the

enforcement program is both understood and acknowledged as an integral, valuable piece of the agency's

regulatory programs.

Key Principles of the Enforcement Program

Consistent with the agency's overall safety mission in protecting the public and environment,

enforcement actions should be used as a deterrent to emphasize the importance of compliance with

regulatory requirements, and to encourage prompt identification, and prompt, comprehensive

correction of violations.

* Enforcement actions are issued commensurate with the significance of the violation. In assessing the

significance of a violation the NRC considers: (I) actual consequences, (2) potential safety

consequences, (3) the potential for impacting the NRC's ability to perform its regulatory function,

and (4) whether there are any willful aspects.

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* Risk insights are used to assess the significance of violations whenever possible. As individual

inspection programs become more risk-informed and performance-based, so too will the respective

enforcement program.

* Enforcement is one part of the overall regulatory process. Enforcement should not be viewed as a

punitive tool to promote good performance. Enforcement is integrated with other regulatory tools to

respond to performance issues.

Compliance remains important to safety. Although changes in inspection oversight processes may

result in fewer civil penalties being imposed and fewer Notices of Violations being issued (i.e.,

greater use of Non-Cited Violations), this does not mean that the agency has reduced its emphasis on

the importance of compliance. Violations will continue to be identified and documented and

licensees will have the responsibility for taking corrective actions to restore compliance and prevent

recurrence.

Enforcement Program Performance Measures

As an agency, the NRC adheres to the Principles of Good Regulation, including independence, openness,

efficiency, clarity, and reliability. Efficiency includes recognition that regulatory decisions should be

made without undue delay. The Office of Enforcement has established the average time to issue

escalated enforcement actions (excluding orders) as a performance measure used by the NRC. (See page

13 for additional discussion on this performance measure.) The performance measure goal is 90 percent

of the cases completed, on average, within 90 days. During fiscal year 2001, this standard was met, with

enforcement actions issued in an average of 61.5 days. Figure 2 on page 13 includes timeliness trends

since fiscal year 1996.

Enforcement actions are occasionally challenged by licensees for several reasons; for example, licensees

dispute the requirements, the facts of the case, the application of the Enforcement Policy, or the

significance of the violation. A high quality product can be characterized as one where the staff

interprets and correctly applies the regulatory requirement, accurately details the facts, and consistently

and precisely applies the Enforcement Policy. Therefore, the Office of Enforcement has established a

metric for quality of enforcement actions as being less that 30 non-escalated enforcement actions being

successfully disputed based on interpretation of the requirements, the facts of the case, or the application

of the Enforcement Policy. Routinely, a licensee will provide clarifying information that was not

available at the time of inspection, that changes whether or not a noncompliance exists. Violations that

are overturned based on supplemental information being provided that was not available for the inspector

to make his assessment are not counted in the metric. During FY 2001, more than 1200 non-escalated

enforcement actions were issued to reactor and material licensees. Out of these actions, 37 violations

were disputed. Of the 37 disputed violations, 15 violations were either withdrawn or revised by the

NRC. However, in only two cases can it be suggested that the inspector made an erroneous enforcement

decision based on the information at hand. Therefore, this metric was met.

Overview of the Enforcement Program

Violations are identified through inspections and investigations. All violations are subject to civil

enforcement action and may also be subject to criminal prosecution. After an apparent violation is

identified, it is assessed in accordance with the Commission's Enforcement Policy. The Policy is

published as NUREG-1600, "General Statement of Policy and Procedure for NRC Enforcement Actions,"

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to foster its widespread dissemination. As a living policy statement, revisions are noticed in the Federal

Register. The NRC's Office of Enforcement maintains the current policy statement on its homepage on

the Internet at wwvw.nrc.gov/OE. (Note: After September 11, 2001, the NRC took down its web site

pending additional review of information. The enforcement page remained unavailable at the end of the

fiscal year.) Because it is a policy statement and not a regulation, the Commission may deviate from the

Enforcement Policy as appropriate under the circumstances of a particular case.

There are three primary enforcement sanctions available: Notices of Violation, civil penalties, and

orders. A Notice of Violation (NOV) identifies a requirement and how it was violated, formalizes a

violation pursuant to 10 CFR 2.201, and normally requires a written response. A civil penalty is a

monetary fine issued under authority of Section 234 of the Atomic Energy Act (AEA) or Section 206 of

the Energy Reorganization Act (ERA). Section 234 of the AEA provides for penalties of up to $100,000

per violation per day; but that amount has been adjusted by the Debt Collection Improvement Act of

1996 to be $120,000. The Commission's order issuing authority under Section 161 of the AEA is broad

and extends to any area of licensed activity that affects the public health and safety. Orders modify,

suspend, or revoke licenses or require specific actions by licensees or persons. NOVs and civil penalties

are issued based on violations. Orders may be issued for violations, or in the absence of a violation,

because of a public health or safety issue.

The NRC first assesses the significance of a violation by considering: (I) actual safety consequences;

(2) potential safety consequences; (3) potential for impacting the NRC's ability to perform its regulatory

function; and (4) any willful aspects of the violation. Violations are either assigned a severity level,

ranging from Severity Level IV for those of more than minor concern to Severity Level I for the most

significant or are associated with findings assessed through the reactor oversight process's Significance

Determination Process (SDP) that are assigned a color of green, white, yellow, or red based on increasing

risk significance.

The manner in which a violation is dispositioned is intended to reflect the seriousness of the violation

and the circumstances involved. Most of the violations identified in the nuclear industry are of low risk

significance. Provided certain criteria in Section VI.A of the Enforcement Policy are met, the NRC will

normally disposition Severity Level IV violations and violations associated with green SDP findings as

Non-Cited Violations (NCVs). NCVs are documented in inspection reports (or inspection records for

some materials licensees) to establish public records of the violations, but are not cited in NOVs which

normally require written responses from licensees. Dispositioning violations in this manner does not

eliminate the NRC's emphasis on compliance with requirements nor the importance of maintaining

safety. Licensees are still responsible for maintaining safety and compliance and must take steps to

address corrective actions for these violations. Even minor violations must be corrected. However,

given their limited risk significance, they are not subject to enforcement action and are not normally

described in inspection reports. This approach for violations that have low risk significance is consistent

with the agency's performance goals.

A predecisional enforcement conference or a regulatory conference may be conducted with a licensee

before making an enforcement decision if escalated enforcement action appears to be warranted, and if

the NRC concludes that it is necessary or the licensee requests it. (Escalated enforcement action is

defined as action involving Severity Level I, II, or III violations; violations associated with white, yellow,

or red findings evaluated by the SDP; civil penalties; or orders.) If the NRC concludes that a conference

is not necessary, it may provide a licensee with an opportunity to respond to the apparent violations

before making an enforcement decision. The purpose of the conference is to obtain information that will

assist the NRC in determining the appropriate enforcement action, such as: (I) a common understanding

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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. The decision to hold a conference

does not mean that the agency has determined that a violation has occurred or that enforcement action

will be taken. In accordance with the Enforcement Policy, conferences are normally open to public

observation.

Civil penalties are normally assessed for Severity Level I and II violations and knowing and conscious

violations of the reporting requirements of Section 206 of the Energy Reorganization Act. Civil penalties

are considered for Severity Level III violations. Although civil penalties will not normally be used for

violations associated with the ROP, civil penalties (and the use of severity levels) will be considered for

issues that are willful, that have the potential for impacting the regulatory process, or that have actual

consequences.

The NRC imposes different levels of civil penalties based on a combination of the type of licensed

activity, the type of licensee, the severity level of the violation, and (1) whether the licensee has had any

previous escalated enforcement action (regardless of the activity area) during the past 2 years or past two

inspections, whichever is longer; (2) whether the licensee should be given credit for actions related to

identification; (3) whether the licensee's corrective actions are prompt and comprehensive; and

(4) whether, in view of all the circumstances, the matter in question requires the exercise of discretion.

Although each of these decisional points may have several associated considerations for any given case,

the outcome of the assessment process for each violation or problem, absent the exercise of discretion, is

limited to one of the following three results: no civil penalty, a base civil penalty, or twice the base civil

penalty.

If a civil penalty is to be proposed, a written Notice of Violation and Proposed Imposition of Civil

Penalty is issued and the licensee has 30 days to respond in writing, by either paying the penalty or

contesting it. The NRC considers the response, and if the penalty is contested, may either mitigate the

penalty or impose it by order. Thereafter, the licensee may pay the civil penalty or request a hearing.

In addition to civil penalties, orders may be used to modify, suspend, or revoke licenses. Orders may

require additional corrective actions, such as removing specified individuals from licensed activities or

requiring additional controls or outside audits. Persons adversely affected by orders that modify,

suspend, or revoke a license, or that take other action may request a hearing.

The NRC issues a press release with a proposed civil penalty or order. All orders are published in the

Federal Register.

Fiscal Year 2001 Highlights:

* two Enforcement Policy revisions

* 89 escalated Notices of Violation without civil penalties

20 proposed civil penalties ($342,900)

* 13 orders

* 5 orders imposing civil penalties
OE Annual Report

Office of Enforcement

The Office of Enforcement (OE) exercises oversight of NRC enforcement programs, provides

programmatic and implementation direction to regional and headquarters offices conducting or involved

in enforcement activities, and ensures that regional enforcement programs are adequately carried out.

The Office of Enforcement reports to the Executive Director for Operations (EDO) through the Deputy

Executive Director for Reactor Programs and coordinates enforcement actions involving materials

licensees with the Deputy Executive Director for Materials, Research and State Programs.

The Office of Enforcement has 15 full-time employees (FTEs) assigned for headquarters activities and

10 FTEs assigned for regional activities (although these FTEs report to the Regional Administrators).

In March 2001, Dr. Frank J. Congel replaced Richard W. Borchardt as the Director of OE. Dr. Congel's

assignment was one of several senior management changes announced on February 23, 2001.

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1. Enforcement Policy Changes

This section describes the two revisions to the Enforcement Policy that were made during fiscal year

(FY) 2001.

A. October 4, 2000: Adjustment of Civil Monetary Penalties Based on Inflation

On October 4, 2000, the Commission published a revision to the Enforcement Policy in the Federal

Register (65 FR 59274) to increase the civil penalty amounts it can impose against licensees for

violations of Commission requirements. The increase, mandated by Congress, adjusts fines for

inflation. The maximum civil monetary penalty increases from $110,000 per violation per day to

$120,000 per violation per day. The Commission also approved increases to the lesser civil penalty

amounts in Table 1A of the Enforcement Policy to maintain the same proportional relationships

between the penalties. This revision became effective on November 3, 2000. The new civil penalty

amounts apply only to violations that occur after November 3, 2000.

B. December 18, 2000: Adjustment of Base Civil Penalties for Loss,

Abandonment, or Improper Transfer or Disposal of Sources

On December 18, 2000, the Commission published a revision to the Enforcement Policy in the

Federal Register (65 FR 79139) addressing base civil penalties for loss, abandonment, or improper

transfer or disposal of sources. This revision was published with a companion final rule involving

10 CFR Parts 30, 31, and 32, governing certain industrial devices containing byproduct material that

are licensed pursuant to the general license provisions of 10 CFR 31.5. The inclusion of separate

base civil penalty amounts considers both the cost of proper disposal and the relative risk to the

public from sources that are lost, abandoned, or improperly transferred or disposed of. The new base

civil penalty structure is roughly equivalent to three times the cost of proper disposal. The revision

became effective on February 16, 2001.

2. Initiatives, Staff Guidance, & Implementation

This section addresses enforcement initiatives during FY 2001 (including ROP activities), new staff

guidance, enforcement training, and enforcement program audits.

A. Reactor Oversight Process (ROP)

The first year of implementation of the reactor oversight process (ROP) and in particular, the manner

in which the significance determination process (SDP) assesses the safety significance of inspection

findings overall has been successful. The assessment and enforcement programs have reached a

degree of integration never before achieved under previous oversight programs. While improvement

issues still remain, the ROP provides a sound framework for assessing the performance of power

reactor licensees and utilizes the NRC's enforcement authority appropriately through a process that is

both objective and transparent.

OE was significantly involved in the initial implementation of the ROP. The enforcement staff has

used its years of experience implementing the traditional enforcement program to serve as process

facilitators during significance determination and enforcement review panels (SERPs), regulatory

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conferences, and post conference caucuses/SERPs. OE utilized its presences in the regional offices

to assist in the roll out of new program guidance and to provide feedback to the program office on

lessons learned during initial implementation. OE reviews changes to program guidance and

provided valuable insights in the areas of no-color findings, timeliness, the disposition of old design

issues, downgrades, and the treatment of programmatic issues in a risk-informed framework.

OE was involved in the assessment of the first year of initial implementation. OE participated in the

Federal Advisory Committee Act (FACA) Panel which was chartered to assess the performance of

the ROP during its first year of implementation. Panel members represent various stakeholder

interests including public interest groups, individual utility representatives, the Nuclear Energy

Institute (NEI), NRC regional offices, and OE. This group developed a final report detailing the

panel's findings which was issued to NRR on May 10, 2001. OE participated in the NRR

self-assessment process, which involved a number of internal stakeholder meetings designed to

identify initial implementation issues. These issues were then taken to a public workshop which was

designed to engage external stakeholders to ensure that the staff had identified the correct issues and

offered the public and industry the opportunity to provide feedback on possible solutions. OE also

participated in the public workshop as panel members during a number of the sessions. Finally, OE

provided comments on and authored the enforcement section of SECY-0l-01 14, "Results of the

Initial Implementation of the New Reactor Oversight Process."

The NRC staff issued final significance determination letters for 26 cases identifying a finding that

were "greater than green" during FY 2001. A Notice of Violation (NOV) was issued in association

with the identified cases on 21 occasions demonstrating the level of integration between the

assessment and enforcement program. These 21 cases represent the majority of the escalated

enforcement actions taken in the power reactor area during FY 2001. Licensees disputed/appealed

only one case involving a violation during FY 2001. The case involved three white SDP findings

associated with an NOV for a violation of 10 CFR Part 20 (As Low As Reasonably Achievable

(ALARA)) at the Callaway Plant. The licensee disputed the NOV and appealed the three white

findings using their respective processes. OE worked with Region IV and NRR to respond to the

licensee's arguments and eventually upheld both the NOV and the findings.

On January 31, 2001, the interim enforcement policy for enforcement discretion that was developed

to address inaccurate or incomplete information regarding the submission of performance indicator

data expired. OE continues to use the guidance contained in the Enforcement Policy to review the

appropriateness for discretion for these type violations on a case-by-case bases. The NRC has issued

very few violations in this area since the expiration of blanket discretion and no escalated

enforcement has been taken.

OE performed an audit of the impact of the ROP on the timeliness with which the NRC dispositions

escalated enforcement actions. This audit concluded that the ROP/SDP has incorporated a more

technically complex and time consuming process for determining the safety significance of

inspection finding than was used under the traditional enforcement program. (See paragraph J. of

this section for additional information.)

OE has been monitoring the number and causes for ROP findings that were preliminarily determined

to be "greater than green" and subsequently downgraded prior to the final significance determination.

OE has been tracking downgraded findings as an opportunity to learn more about the effectiveness

and efficiency of the SDP. In addition, downgraded findings have the potential to impact NRC goals

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in the area of improving public confidence and reducing unnecessary regulatory burden. OE is

planning to conduct an audit in this area during FY 2002.

B. Discrimination Task Group

On July 27, 2000, the NRC established a management-level review group (Discrimination Task

Group) to: (1) evaluate the Agency's handling of matters covered by its employee protection

standards, (2) propose recommendations for improvements to the Agency's process for handling such

matters, including revisions to guidance documents and regulations as appropriate, (3) to ensure that

the application of the NRC enforcement process is consistent with the objective of providing an

environment where workers are free to raise safety concerns in accordance with the Agency's

employee protection standards, and (4) to promote active and frequent involvement of internal and

external stakeholders in the development of recommendations for changes to the process.

A Draft Report and Preliminary Recommendations was issued in May 2001 and was made available

for public comment. A second round of public meetings was conducted to solicit comment on the

draft report.

Overall in FY2001, nine public meetings were conducted. Three of the meetings in FY 2001 were

conducted prior to the issuance of the draft report and six were conducted after the draft report was

issued. The meeting dates and locations were:

* October 5, 2000 - US NRC Region III Office, Lisle, Illinois.

> October 19, 2000 - Paducah Community College, Paducah, Kentucky.

* November 1, 2000 - Waterford Town Hall, Waterford, Connecticut.

> June 25, 2001 - US NRC Technical Training Center, Chattanooga Tennessee.

July 11, 2001 - US NRC Region III Office, Lisle, Illinois.

July 12, 2001 - Paducah Community College, Paducah, Kentucky.

August 9, 2001 - San Luis Obispo Public Library, San Luis Obispo, California.

August 14, 2001 - Waterford Town Hall, Waterford, Connecticut.

August 16, 2001 - US NRC Headquarters Office, Rockville, Maryland.

Following Commission direction, the Discrimination Task Group delayed the scheduled completion

of the Final Report and recommendations until comments on Alternative Dispute Resolution (ADR)

were received and evaluated (see paragraph F. of this section). The Discrimination Task Group will

include an analysis of this issue and comments in the final report. The final Discrimination Task

Group report is scheduled for release June, 2002.

In a continuing effort to promote active and frequent involvement of internal and external

stakeholders, OE used its web site to highlight activities of the Discrimination Task Group. This

web site includes a variety of information about the Discrimination Task Group, including the

announcement of its formation and its charter, as well as information about upcoming meetings and

background information on the subject of discrimination. The web site also included an Online Form

for public comments on the draft report. (Note: After September 11, 2001, the NRC took down its

web site pending additional review of information. The enforcement page remained unavailable at

the end of the fiscal year.)

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C. Enforcement Actions Against Individuals

Enforcement actions involving individuals is an area that the agency takes very seriously. This issue

is currently addressed in Section vm of the Enforcement Policy. The enforcement staff established

an internal working group to evaluate and propose recommendations for improvements to this section

of the Enforcement Policy, including clarification on the thresholds for issuing individual

enforcement sanctions.

On March 9, 2001, a Federal Register notice was issued that sought stakeholder feedback on a

proposed revision to the guidance in Section VIII, "Enforcement Actions Involving Individuals," of

the Enforcement Policy. The proposed policy revision was available for review until April 22, 2001.

The NRC received comments from several stakeholders, including the Union of Concerned Scientists

and NEI. The staff is currently evaluating these comments and will propose a policy revision to the

Commission coincident with the submittal of the final Discrimination Task Group report.

D. Materials Program Support & Initiatives

OE reviews and concurs on rulemakings related to the materials program to ensure the proposed and

final rules and the Enforcement Policy and procedures are consistent. In doing so, OE makes any

necessary changes to the Enforcement Policy or procedures. Significant rulemakings completed in

FY 2001 include revisions to 10 CFR Part 71 concerning NRC's authority to issue orders or take

other enforcement actions necessary to ensure that certificate holders and applicants for a Certificate

of Compliance comply with Part 71 requirements, similar to NRC enforcement actions in other

program areas, the final rule revising 10 CFR 30, 70, 72, and 150 concerning interim storage for

greater than Class C waste, and a proposed revision of 10 CFR Part 20 regarding the skin dose limits.

OE participated on working groups for these rulemakings and developed related changes to the

Enforcement Policy and Enforcement Manual. An OE staff member also served as a working group

member on rulemakings for distribution and use of exempt products and for requirements for

immediate reporting of events.

During this fiscal year, OE implemented changes in the Enforcement Policy to increase the civil

penalties for cases involving loss or unauthorized disposal of licensed sealed sources. The policy

change became effective on February 16, 2001. It provides that cases involving loss of a sealed

source will normally result in assessment of a civil penalty of at least three times the cost of

authorized disposal. This change was necessary to support the NMSS initiative to improve licensees'

accountability of sealed sources and devices. The Commission approved the Policy revision on

July 11, 2000.

OE proposed and the Commission approved the staffs intent to exercise enforcement discretion for

certain violations of 10 CFR 20.1201, "Occupational exposure," by NRC medical use licensees.

Specifically, discretion would be exercised with regard to licensees whose employees received

exposure from a combination of byproduct material and X-rays and had direct readings on one or

more individual monitoring devices that exceeded 5 rem (0.05 Sv) total effective dose equivalent.

These licensees have applied a State approved dose evaluation methodology based on weighting

factors for calculating whole body occupational dose from medical X-ray floroscopic procedures.

NRC regulations do not allow the use of a weighing factor, other than one, to calculate the external

whole body dose without prior NRC approval. The NRC concluded that discretion was appropriate

since there appears to be some technical merit in the use of the weighing factor formula, there

appears to be a misunderstanding of the requirements of 10 CFR Part 20 on the part of some

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licensees, and some States accept use of the dose evaluation methods for the X-ray portion of the

dose. The NRC is currently evaluating the use of alternative dose evaluation methodologies and is

developing its regulatory and technical positions on this issue. The NRC will exercise enforcement

discretion for these types of cases until 30 days after the issue is addressed in a Regulatory Issue

Summary.

As necessary, OE serves as a member of 10 CFR 2.206 Petition Review Boards, Allegation Review

Boards, and NRC Bankruptcy Review Teams to provide guidance and support on associated

enforcement issues.

In addition, during the fiscal year, OE reviewed a petition for rulemaking submitted by the Natural

Resources Defense Council. The petitioner requested that the Commission's regulations be amended

to require that no license be issued to, or retained by, any individual or organization whose principal

owner, officer, or senior manager: (1) fails to report engaging in, or having knowledge or evidence

of, bribery of, or extortion by, Federal, State, or other regulatory officials; or, (2) has acted in any

manner that flagrantly undermines the integrity of the regulatory process of NRC or that of an

Agreement State. OE reviewed public comments on the petition. On May 14, 2001, NRC denied the

petition because the petitioner has neither identified a statutory requirement for promulgating the

regulation nor identified a need for such regulation since NRC already has the authority to take the

actions requested by the petitioner, and because the NRC believes that imposition of these types of

actions should be considered on a case-by-case basis.

E. Reactor Program Support & Initiatives

In addition to activities associated with the ROP, the enforcement staff have supported other

initiatives in the reactor program.

OE reviews and concurs on rulemakings related to the reactor program to ensure the proposed and

final rules and the Enforcement Policy and procedures are consistent. In doing so, OE makes any

necessary changes to the Enforcement Policy or procedures.

During fiscal year 2001, the enforcement staff reviewed proposed rulemaking to revise Appendix E

to 10 CFR Part 50, "Emergency Planning and Preparedness for Production and Utilization Facilities,"

to resolve an ambiguity in the regulations regarding NRC approval of nuclear power plant licenseeinitiated changes to emergency action levels (EALs). The staff recommended and the Commission

approved the recommendation to exercise enforcement discretion for compliance with the current

requirement for changes to EALs until rulemaking is complete.

During fiscal year 2001, the enforcement staff implemented an enforcement approach to address

revisions to 10 CFR 50.59, "Changes, tests, and experiments," that would be consistent with the ROP

framework. During the transitional period between the new rule and the old rule, OE conducted

review panels with NRR, OGC, and the region to evaluate all potential 10 CFR 50.59 violations.

These panels were successful in ensuring a high level of consistency for determining when and to

what extent violations of 10 CFR 50.59 occurred.

OE also continues to conduct review panels with NRR, OGC, and the region to evaluate all proposed

violations of 10 CFR 50.65, "Requirements for monitoring the effectiveness of maintenance at

nuclear power plants" (the Maintenance Rule). The performance-based nature of this rule poses a

continuing challenge to inspectors in identifying violations. These panels have been successful in

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ensuring a high level of consistency for determining when violations of the Maintenance Rule have

occurred. During FY 2000, OE established a working group of OE, NRR, OGC, and regional

representatives to develop comprehensive Maintenance Rule enforcement guidance that would

eliminate the need for the panels to ensure consistency and identification of Maintenance Rule

violations. During FY 2001, OE posted a notice on its web site that sought public comment on a

comprehensive revision of the Maintenance Rule enforcement guidance. Two stakeholders provided

comments on the draft guidance. OE is evaluating these comments and continuing to refine the draft

guidance as experience is gained with the new rule section requiring risk assessments. OE will

continue to conduct the panels until regional inspector training sessions, currently being conducted,

are completed and the enforcement guidance is finalized and placed in the Enforcement Manual. At

that time OE plans to propose that the panels be discontinued.

Another challenge facing the agency is the appropriate treatment and regulatory response to security

matters at nuclear facilities. Physical protection against the threat of radiological sabotage or theft of

nuclear material is a fundamental obligation of all licensees. Drills using mock adversaries

(force-on-force exercises, such as Operational Safeguards Response Evaluations (OSREs)) are an

important method for evaluating the effectiveness of licensee's protective strategies. When the staff

proposed the revised ROP, bench marking and feasibility reviews were completed for the SDPs,

including the physical protection SDP. However, the bench marking and feasibility for the physical

protection SDP did not include detailed consideration of OSREs or other force-on-force exercises. In

evaluating the first OSRE to be performed under the ROP, the SDP produced a significance

determination that was substantially inconsistent with past positions (in that it was more significant)

and did not appear appropriate for the circumstances. During late FY 2000, OE took part in

developing a recommendation to the Commission to address this issue on an interim basis. In

FY 2001, OE provided a staff member to the program office (NRR) safeguards function to

re-engineer the process. Significant progress was made until the events of September 11, 2001,

diverted resources from the effort. OE will continue to work with NRR in developing an acceptable

approach to assess the significance and the appropriate enforcement approach for issues identified

during evaluated drills and exercises.

OE also supported NRR in the evaluation of the Safeguards Performance Assessment (SPA) program, an

industry-led initiative that puts licensees in charge of developing and executing exercises and drills to test its

readiness to protect their facilities. The Commission approved a one-year pilot program for the SPA and the

concept of an enforcement discretion policy for licensees who volunteer to participate in the SPA

program. The staff was in the process of seeking the Commission's approval of a recommended

policy when the events of September 11, 2001, caused the Commission to defer consideration of SPA

pending further evaluation of safeguards and security issues and NRC regulations and requirements.

F. Alternative Dispute Resolution

The Administrative Dispute Resolution Act (Act) of November 15, 1990, requires, in part, that

agencies examine alternative means of resolving disputes in connection with enforcement actions.

As required by the Act, the agency developed a policy in 1992 (57 FR 36678) to address what has

come to be known as Alternative Dispute Resolution (ADR). The policy states that opportunities

may arise for use of ADR in enforcement.

The enforcement staff actively worked with the Office of the General Counsel (OGC) and consulted

with other federal agencies to explore the use of an ADR policy in the NRC enforcement arena.

While it appears that other agencies have used ADR in the area of civil enforcement, its use in the

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OE Annual Report

NRC enforcement process poses significant challenges. Specifically, the use of ADR presents

challenges to the long established enforcement program. ADR is any procedure that is used to

resolve issues in controversy, including but not limited to, conciliation, facilitation, mediation, fact

finding, mini-trials, arbitration, etc.

The staff provided the Commission with a preliminary overview of ADR. Public as well as internal

comment is being solicited and will be evaluated prior to making a final recommendation to the

Commission at the end of FY 2002.

G. Increasing Public Confidence

The NRC views building and maintaining public trust and confidence that the NRC is carrying out its

mission as an important performance goal for the agency. To reach this goal, the NRC must be

viewed as an independent, open, efficient, clear and reliable regulator. This will be accomplished by

providing our stakeholders with clear and accurate information about, and a meaningful role in, our

regulatory programs.

Since its initial publication in 1980, the NRC Enforcement Policy has been structured to emphasize

the importance of compliance with regulatory requirements, and to encourage prompt identification,

and prompt, comprehensive correction of violations.

However, because of the recent significant changes and the somewhat complex nature of the

enforcement process, the general public, and many of our stakeholders do not fully understand how

the enforcement program works.

The Commission took a major step to be more open in 1996 when it published a revision to the

Policy to provide that most predecisional enforcement conferences will be open to public

observation. Since then, the NRC has taken additional steps to provide meaningful opportunities to

participate in the enforcement program.

OE wants to actively engage stakeholders to educate them on how the enforcement program is

changing to support new initiatives in the agency's oversight programs in conjunction with meeting

the agency's performance goals of maintaining safety; reducing unnecessary burden; making NRC

activities and decisions more effective, efficient, and realistic; and increasing public confidence. OE

has and will continue to conduct more stakeholder meetings to address the enforcement program and

enforcement issues. In addition to the ROP workshops and Discrimination Task Group public

meetings, enforcement staff have participated in enforcement stakeholder activities, including:

* R.W. Borchardt, Director, OE, served as a panelists in two breakout sessions at the 13th annual

Nuclear Regulatory Information Conference (RIC) on March 24, 2001. He addressed

enforcement issues during the Revised Reactor Oversight Process session and he addressed the

enforcement process for discrimination issues during the Allegation session.

> R. W. Borchardt, Director, OE served as a panelist on the ROP Initial Implementation Evaluation

Panel (IIEP). The IIEP was established on October 17, 2000, at the direction of the Commission

to convene a panel under the Federal Advisory Committee Act to evaluate the first year's

implementation of the ROP. The IEP issued its final report on May 10, 2001.

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OE Annual Report

A member of the OE staff served as a panelist in a breakout session of the March 24, 2001, RIC

that addressed the Maintenance Rule and 10 CFR 50.59, "Changes, tests, and experiments."

The Region II Enforcement Officer provided training for and participation of a DOL OSHA

investigator during a Regional Counsel counterpart meeting conducted in November 2001.

The Region m staff provided a presentation at a regional OSHA investigator counterpart meeting

on the NRC's allegation and enforcement processes and the interactions with DOL and OSHA on

discrimination cases in February 2001.

The Region III enforcement staff provided presentations on the Enforcement Policy and

enforcement program to visiting regulators from Korea on August 1, 2001.

To provide accurate and timely information to all interested stakeholders and enhance the public's

understanding of the enforcement program, OE continues to electronically publish enforcement

information on its home page on the Internet, including the current Enforcement Policy; copies of

significant enforcement actions issued to reactor and materials licensees, non-licensees (vendors,

contractors, and certificate holders), and individuals since 1996; and upcoming predecisional

enforcement conferences. (Note: After September 11, 2001, the NRC took down its web site pending

additional review of information. The enforcement page remained unavailable at the end of the fiscal

year.) During FY 2001, OE modified the web site to include a web page to address the history of the

Enforcement Policy. OE also provides summaries of significant enforcement actions issued to

materials licensees through the NMSS Newsletter.

In an effort to increase stakeholder involvement in Enforcement Policy and guidance development,

OE established a public participation page on the enforcement web site. OE has and will continue to

use this site as a way for interested stakeholders to provide input on various enforcement issues (such

as the Discrimination Task Force and Maintenance Rule guidance) through online comment forms.

OE staff also participated in the initiative to redesign the agency's external web site. This included

the development and release of a prototype on July 11, 2001, for internal and external stakeholders to

comment on. The agency is continuing to refine the prototype and plans on releasing the new web

site by the end of winter 2002. The enforcement web site will be easier to locate on the agency's

new web site because it will show up as a rollover under the "What We Do," icon.

H. Enforcement Guidance

During FY 2001, OE issued two change notices to the Enforcement Manual. Change Notice

Number 2 was issued on November 9, 2000, and Change Notice Number 3 was issued on April 27,

2001. The changes covered a broad range of issues and included numerous changes to the standard

formats for enforcement actions and correspondence. Change Notice Number 3 also announced that

the Enforcement Manual would: (1) no longer be published as a NUREG document and (2) no

longer be published in paper. Eliminating the NUREG publication process and maintaining the

Enforcement Manual solely on the web increases the office's efficiency, reduces administrative costs

to the agency, and increases the effectiveness of enforcement guidance because the most current

guidance is readily available to all staff.

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OE Annual Report

During FY 2001, OE issued two Enforcement Guidance Memoranda (EGMs). EGMs are normally

used to transmit temporary guidance, but may also be used to transmit expedited guidance for

Enforcement Policy application or enforcement program implementation.

+ EGM 01-001 - Interim Guidance for Enforcement of 10 CFR 73.55(a) - Issued April 3,2001.

* EGM 99-005, Rev. I - Guidance for Generally Licensed Devices - Issued April 27, 2001.

On December 5, 2000, R.W. Borchardt, the Director, OE, issued a memorandum to the program

office directors and the regional administrators entitled, "Dispositioning of Enforcement Issues in a

Risk-Informed Framework." This memorandum reinforced that, while changes to inspection and

oversight programs resulted in fundamental changes in the disposition of noncompliances, that the

importance of compliance with regulatory requirements had not diminished and that proper

disposition of violations was necessary. This memorandum is included as Appendix I.

I. Enforcement Training

Successful communication for internal stakeholders is vital to ensure that the enforcement program is

both understood and acknowledged as an integral, valuable piece of the agency's regulatory

programs. OE has and will continue to conduct training to address the enforcement program and

emerging enforcement issues. Headquarters enforcement staff have provided internal stakeholders

with the following training:

* Enforcement staff provided training on the enforcement program for the course, "The NRC:

What It Is and What It Does," in June 2001.

* Enforcement staff helped provide training on the enforcement program included in the

"Fundamentals of Inspection," course conducted in Region II in March 2001.

* Enforcement staff provided a presentation on implementation of the Enforcement Policy

regarding Agreement State licensees working under reciprocity in Federal Waters at Public

Meeting sponsored by Region IV in Lafayette, Louisiana on May 10, 2001.

Deputy Director, OE, provided training to new OI investigators on the enforcement process.

The regions also provided training on the enforcement program in the regional offices.

Region I enforcement staff provided training to Region I Division of Nuclear Materials Safety in

January 2001 and November 2001. The training addressed a number of issues, including:

(1) differentiating between Severity Level IV violations and minor violations, (2) proper

handling of contested violations, (3) use of NRC Form 591, and (4) improper disposal of licensed

material.

Region I enforcement staff provided training to regional staff regarding the existence of Hidden

Text in documents and the resultant potential for release of sensitive information.

Region II Enforcement Officer and an enforcement specialist from OE provided training on the

enforcement program included in the "Fundamentals of Inspection," course conducted in the

region in March 2001.

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OE Annual Report

Region II Enforcement Officer participated in the Regional Counsel counterpart meeting in

November 2001.

Region III enforcement staff provided training to Region III inspection staff in October 2000, and

February 2001. The training incorporated lessons learned from audits and previous cases in

Region III.

Region III enforcement staff provided an abbreviated "Fundamentals of Inspection," course to

new regional inspectors on August 28, 2001.

Region IV enforcement staff provided training for all Region IV Division of Nuclear Materials

Safety staff (all materials inspectors and managers) on minor violations, determining the

significance of violations, materials licensee enforcement trends, changes in base civil penalty

amounts and current enforcement issues.

Region IV enforcement staff conducted the enforcement portion of the "Fundamentals of

Inspection," course for all summer interns in the technical divisions (5 engineering associates)

and new inspectors.

J. Audits

OE staff lead specific topic focused audits of the Regional and program office enforcement programs

to identify inconsistent application of the Enforcement Policy and enforcement guidance.

Audit of Disputed Violations - 4/12/2001

OE performed an audit of the disputed violations received by the agency. The purpose was to

determine the number of disputes received, whether the disputes were handled appropriately and

whether the regions had processes for ensuring that disputes received were documented for lessons

learned. For the purpose of this audit, a disputed violation was defined as a documented denial

received from a licensee.

OE conducted a review of the licensee's concerns and the region's responses to all of the disputed

violations in the year 2000 in ADAMS and the Enforcement Action Tracking System (EATS) and a

cursory review of the disputed violations identified in 1999 in EATS. Through these reviews, OE

looked at timeliness, accuracy, whether or not the guidance in the Enforcement Manual was met, and

compared the actions taken with the guidance in the Enforcement Manual.

After reviewing the audit findings, OE found that the agency met the Quality Metric (less than 30

enforcement actions successfully disputed based on interpretation of the requirements, the facts of

the case, or application of the enforcement policy) set for 2001 in 1999 (8 cases) and 2000

(10 cases). However, only 11 of 69 cases in the past two years met the timeliness goals outlined in

the Enforcement Manual. Additional administrative findings identified inconsistencies in the

guidance provided in the Enforcement Manual and the methods used to track disputed violations.

The audit report included recommendations to address the specific administrative findings and a

recommendation to address the timeliness issue. The recommended approach would be to respond to

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OE Annual Report

the licensee within 30 days to acknowledge the dispute and provide status and a tentative timetable

on a case-by-case basis for the resolution of the dispute.

Audit of Unsubstantiated Office of Investigations Reports - 5/17/2001

OE conducted an audit of unsubstantiated Office of Investigations (OI) reports reviewed by the OE

staff. The purpose was to determine whether the violations identified in unsubstantiated 01 reports

were dispositioned in accordance with the enforcement policy.

OE conducted a review of all 01 reports generated in the year 2000. Of the 108 unsubstantiated

reports reviewed, 16 reports described violations in the synopsis or in the report. These reports and

the documentation available through ADAMS for the licensees involved were reviewed to determine

if the violations were dispositioned in accordance with the Enforcement Policy. In all but one of the

16 reports, the violations were either dispositioned or still open. In the remaining case, since the

violation was minor, it was not dispositioned on the docket.

The audit finding above resulted in one recommendation with regard to dispositioning minor

violations identified in OI reports. If a violation is identified in the OI report synopsis or the OI

report closure letter, the violation should be dispositioned on the docket to provide a public record of

the agency's actions.

Audit of the Timeliness of Escalated Cases Handled under the Revised Reactor Oversight

Process - 8/2/2001

OE conducted an audit of the timeliness of escalated actions dispositioned under the revised reactor

oversight process (ROP). Timeliness was selected as a measure of process performance because it

directly impacts two of the NRC performance goals: (1) making NRC decisions more effective,

efficient, and realistic; and (2) increasing public confidence. Maximizing process efficiency is a

critical component in effective regulation when faced with the constraint of limited resources.

Timely and predictable decision making is also important in the agency's effort to increase public

confidence.

The results of the audit showed that there has been a substantive increase in the amount of time that it

takes to process an escalated assessment and enforcement case under the revised ROP. At the time

of the audit, the average process time for all open and closed cases was 98 days from the final

inspection exit to the issuance of the action, which is approximately twice the value recorded for all

closed cases in FY 2000.

The audit demonstrated that there are three critical phases of the assessment and enforcement

process. First, the time from when an issue is first identified by an inspection or revealed in an event

to the time that a SERP is held. This represents the time that it takes the NRC staff to provide an

initial risk characterization for an issue. This process is integral to the revised ROP and often

requires the involvement of centralized risk expertise in headquarters and the Regions as well as

increased coordination with licensees to obtain information needed for risk determination. Currently,

this phase of the process is not monitored by any management metric. Second, the conference

preparation time is the time required to develop a case from the SERP to a Regulatory Conference.

This phase has been the most time intensive for the cases handled to date. Licensee responsiveness

plays a role in the time delays associated with this area. Finally, the agency decision time measures

the time period from the regulatory conference to the issuance of the final determination letter. This

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OE Annual Report

portion of the process is similar to the traditional enforcement program and only becomes a major

impact on timeliness for cases requiring policy decisions.

Audit of Non-Escalated Materials Enforcement Actions - 8/22/2001

Based on information gathered from the regional audits addressed below, OE reviewed 100 percent

of non-escalated enforcement actions issued to materials licensees during the second and third

quarters of FY 2001. This included a review of violations included in inspection reports as well as

those documented on NRC Form 591, "Safety and Compliance Inspection." The audit was

performed to ensure accuracy and consistency with the Enforcement Policy and the Enforcement

Manual. OE also tracked statistics on the number of inspections performed, the number of

inspections with no violations, the number of both cited and Non-Cited Violations, and how many

actions were dispositioned using Form 591. Statistics were also formulated for selected types of

materials licensees. OE did not identify any significant concerns or adverse trends. However, use of

Form 591s should continue to be encouraged to improve inspection efficiency.

Audit of Enforcement Actions in ADAMS - Ongoing

During the last quarter of FY 2001, OE began an audit of enforcement documents in the NRC's

record management system, Agencywide Documents Access and Management System (ADAMS).

The purpose of the audit was to review the manner in which enforcement-related documents were

entered into ADAMS to ensure that these documents could be properly accessed and retrieved. The

preliminary results indicated that many documents were difficult to retrieve due to improper

document profiling.

Regional Audits

In addition to the headquarters lead audits, the regional enforcement staff also conducted audits of

the region's enforcement program. During this fiscal year, the regions routinely reviewed nonescalated reactor and materials enforcement actions to determine: (1) if enforcement issues were

adequately described in the inspection reports and if they were properly dispositioned in accordance

with the Enforcement Policy and applicable enforcement guidance; and (2) if violations were

properly documented and received the appropriate significance categorization either by SDP color or

severity level. The audits determined that, for the most part, non-escalated actions were properly

dispositioned in accordance with NRC guidance. Some issues that were identified included

insufficient documentation, failure to follow process procedures in soliciting OE review, and failure

to use standard language in enforcement correspondence.

During this fiscal year, Region I enforcement staff also performed a self-assessment regarding the

existence of Hidden Text in documents and the resultant potential for release of sensitive

information. Region II enforcement staff routinely participated in Division led peer reviews of

inspection reports to ensure inspection report clarity, compliance with Agency policies and

procedures (e.g., Manual Chapter 0610*), and whether inspection findings were adequately

supported by the report details. In addition to audits, Region IV's enforcement staff participated in

nearly all inspection debriefings for reactor and materials inspections to assure that violations of

requirements were being properly dispositioned.

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OE Annual Report

3. Escalated Enforcement and Administrative Items

During fiscal year 2001, the agency issued 127 escalated enforcement items.

Note that an enforcement case or enforcement action

issued to a licensee may include more than one Escalated Enforcement For FY 2001

individual enforcement item (e.g., a civil penalty and an

escalated NOV without a civil penalty).

Escalated NOVs are individual Severity Level I, II, or

HI violations issued without a civil penalty and

individual violations associated with white, yellow, or

red SDP ROP findings.

Figure 3 on page 21 includes a numerical breakdown of

escalated enforcement items issued by each regional and

program office. Figure 4 on page 23 provides a * E.c.bbd NOV. * CovU Pi

breakdown of escalated enforcement items based on the Or E d ers * M enase

type of licensee, non-licensee, or individual.

Figure 1

Enforcement Actions With OI Reports

Of the 89 escalated NOVs, 33 (or 37%) had an 01 report associated with them. Of the 20 proposed civil

penalties, 11 (or 55%) had an OI report. Of the 13 enforcement orders, 11 (or 85%) had an 01 report.

Timeliness of Enforcement Actions

The average time to issue escalated enforcement actions (excluding orders) is a performance measure

used by the NRC.

For actions that do not involve an investigation, the Timeliness Trends a

measurement period begins on the date of the

inspection exit meeting. For actions that involve an /

investigation, but no referral to the Department of 84.5

Justice (DOJ), the measurement period begins on the so / 7.

date of issuance of the report of investigation. For 80_

actions that involve an investigation and referral to

DOJ, the measurement period begins on the date DOJ 40-

informs the NRC that the NRC may proceed with civil /0_

action. For actions that involve discrimination and

Department of Labor (DOL) proceedings, the , measurement period begins when there is an FY96 FY97 FY98 FY99 FY00 FY01

appropriate decision in the DOL process or sufficient * Avera g NWderof Days to [&BueAckion

evidence from the NRC's processes to support actions.

Figure 2 a

The performance measure goal is 90 percent of the

cases completed, on average, within 90 days. During

fiscal year 2001, this standard was met, with enforcement actions issued in an average of 61.5 days.

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CO 
-. OE Annual Report

A. Escalated Notices of Violation (Without Civil Penalties)

During fiscal year 2001, the agency issued 89 escalated Notices of Violation (without civil

penalties). (This number reflects the number of enforcement items versus the number of enforcement

cases issued during the year.) Twelve of these items were issued to individuals and two were issued

to non-licensees. See Section 5 for more information on enforcement items issued to individuals and

other non-licensed persons (i.e., vendors and certificate holders). Nineteen of these issues were

associated with a white SDP finding from the ROP, one issue was associated with a yellow SDP

finding, and one issue was associated with a red SDP finding. Appendix A includes a short summary

description of each of the enforcement issues issued to licensees.

B. Civil Penalty Actions

During fiscal year 2001, the agency issued 20 civil penalty issues. Appendix B includes a short

summary description of each of these items. Table 2 includes statistical information on civil

penalties. As stated before, an enforcement action may include more than one individual civil

penalty issue.

C. Orders

During fiscal year 2001, the agency issued thirteen enforcement orders. Eleven of the orders were

issued to individuals and two were issued to non-licensees. (See Section 5 for more information on

enforcement actions issued to individuals, vendors, and certificate holders.) In addition to these

orders, five civil penalty imposition orders were issued. Appendix C includes a short summary

description of the five impositions that were issued to licensees.

D. Demands for Infornation

A Demand for Information is an administrative enforcement tool issued to a licensee or other person

that enables the NRC to determine whether an order or other enforcement action should be issued.

OE issued one Demand for Information (DFI) to an individual during fiscal year 2001. This action is

summarized in Appendix D.

E. Escalated Enforcement Trends

During fiscal year 2001, the agency issued 127 individual escalated items. Figure 5 show graphical

representations of enforcement trends since fiscal year 1995. Table 2 also shows civil penalty

statistical comparisons.

It should be noted that direct correlations between the fiscal years is difficult because of the major

policy changes that have occurred over the years. Although the number of individual escalated

issued is greater than last year, with the exception of actions to radiographers, the number of

escalated enforcement issues by type of licensee, individual, and non-licensee is similar to last year.

For example, the number of escalated issues for operating reactors in FY 2000 was 24 versus 25 for

FY 2001. The number of escalated issues involving radiographers, however, went from six in

FY 2000 to 21 in FY 2001.

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OE Annual Report

4. Cases Involving Exercise of Discretion

Section VII of the Enforcement Policy addresses those cases where, notwithstanding the normal guidance

contained in the Policy, the NRC may choose to exercise discretion and either escalate or mitigate

enforcement sanctions within the Commission's statutory authority to ensure that the resulting

enforcement action takes into consideration all of the relevant circumstances of the particular case.

During FY 2001, fifteen cases that would be considered escalated involved an exercise of discretion.

Section VII.A

Section VII.A of the Enforcement Policy provides that the NRC may increase a sanction up to its full

enforcement authority where the action is warranted without applying the normal civil penalty

assessment process (Section VI.C.2). It also provides for either increasing the amounts of civil penalties

or proposing civil penalties where the normal process would result in no civil penalty. During FY 2001,

four cases involved this exercise of discretion.

Midwest Testing, Inc. EA 01-119

Bridgeton, Missouri

On July 20, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$3,000 was issued for a Severity Level m violation involving the failure to control and maintain constant

surveillance of a portable density gauge that resulted in the loss of the gauge. Although the normal civil

penalty assessment process would have fully mitigated the civil penalty, a penalty was proposed in

accordance with Section VII.A. 1 .g of the Enforcement Policy to emphasize the significance of the loss of

licensed material in this case.

Southeast Missouri State University EA 00-201

Cape Girardeau, Missouri

On September 13, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$11,000 was issued for a Severity Level I problem involving the failure to: (1) control activities to limit

doses in accordance with requirements, (2) make necessary surveys to determine radiological hazards,

and (3) possess only material authorized on the University's license. Although a base civil penalty would

be warranted based on the normal civil penalty assessment process, the NRC exercised enforcement

discretion in accordance with Section VII.A.1 of the Enforcement Policy and increased the penalty by

100 percent based on the licensee's particularly poor performance.

Stork/Twin City Testing EA 00-169

St. Paul, Minnesota

On December 15, 2000, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$11,000 was issued for a Severity Level III violation involving the deliberate failure to have two

individuals present during radiography at a temporary job site. The NRC exercised discretion in

accordance with Section VII.A.I of the Enforcement Policy and increased the amount of the civil penalty

based on the duration of the violation, the financial gain as a result of the violation, and the willful nature

of the violation.

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OE Annual Report

University of Medicine & Dentistry of New Jersey EA 01-186

Newark, New Jersey

On September 25, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$3,000 was issued for a Severity Level Iml problem. The problem included two violations involving the

failure to control and maintain constant surveillance of material in controlled or unrestricted areas and

the failure to make surveys (i.e., evaluations of the radiological conditions and potential hazards incident

to the use, transfer, release, disposal, or presence of radioactive material or other sources of radiation).

Although the normal civil penalty assessment process would have fully mitigated the civil penalty, a base

civil penalty was proposed in accordance with Section VII.A. l .g of the Enforcement Policy to emphasize

the significance of the loss of licensed material in this case.

Section VII.B.1

This section is currently marked as "reserved" in the Enforcement Policy.

Section VII.B.2

Section VII.B.2 provides that civil penalties or NOVs need not be issued for violations identified during

extended shutdowns or work stoppages if they are licensee-identified, based upon activities prior to the

events leading to the shutdown, non-willful, and not categorized at Severity Level I. This exercise of

discretion provides that the licensee's decision to restart the plant requires NRC concurrence. During

FY 2001, no cases involved this exercise of discretion.

Section VII.B.3

Section VII.B.3 provides that civil penalties or NOVs need not be issued for old design issues that are

licensee-identified and corrected and were not likely to have been identified earlier through routine

surveillance. During FY 2001, no cases involved this exercise of discretion.

Section VII.B.4

Section VII.B.4 provides that civil penalties or NOVs need not be issued for violations identified due to

previous escalated enforcement action if the violation was licensee-identified, it has a similar root cause

as a previous escalated action, it does not substantially change the regulatory concern out of the initial

action, and it was corrected. During FY 2001, no cases involved this exercise of discretion.

Section VII.B.5

Section VII.B.5 provides that civil penalties or NOVs need not be issued for violations involving

discrimination issues if they are licensee-identified and corrected. During FY 2001, no cases involved

this exercise of discretion.

Section VII.B.6

Section VII.B.6 provides that civil penalties or NOVs need not be issued for violations involving special

circumstances. During fiscal year 2001, eleven cases involved this exercise of discretion.

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OE Annual Report

Alaska Industrial X-Ray, Inc. EA 01-015 and EA 01-016

Anchorage, Alaska

On April 25, 2001, a Notice of Violation was issued for two Severity Level III violations. The first

violation involved the deliberate failure to assure that two qualified radiography personnel were present

during radiographic operations. Although a civil penalty would normally be proposed for this case, the

NRC exercised enforcement discretion in accordance with Section VII.B.6 of the Enforcement Policy and

refrained from issuing a civil penalty because the violation would not have been identified had the

involved radiographer not voluntarily provided information during the investigation. The second

violation involved the failure of a radiographer's assistant to wear an alarm ratemeter while involved in

radiographic operations.

Allied Inspection Services, Inc. EA 01-099

St. Clair, Michigan

On June 4, 2001, a Notice of Violation was issued for a Severity Level m violation involving the willful

failure to test exposure devices using depleted uranium (DU) shielding and an "S" tube configuration for

DU contamination within the required interval. Although a base civil penalty would normally be

proposed for this case, the NRC exercised enforcement discretion in accordance with Section VII.B.6 of

the Enforcement Policy and refrained from issuing a civil penalty because the safety significance of the

violation was low; there was no tangible benefit to the individual or licensee; and the individual accepted

responsibility, cooperated with the NRC, and voluntarily disclosed the violation to the NRC.

Arthur Brisbane Child Treatment Center EA 99-171

Farmingdale, New Jersey

On August 16, 2001, a Notice of Violation was issued for a Severity Level III problem involving

deliberate improper disposal of radioactive material generated from the cleanup of a broken exit sign and

deliberate submittal of inaccurate information to the NRC. Although a base civil penalty would normally

be proposed for this case, the NRC exercised enforcement discretion in accordance with Section VII.B.6

of the Enforcement Policy and refrained from issuing a civil penalty because the licensee was issued a

civil penalty for the event by the State of South Carolina and the licensee is no longer a general licensee.

Duke Energy Corporation EA 01-161

Oconee Nuclear Station

On July 30, 2001, the NRC issued a letter documenting its decision to exercise enforcement discretion in

accordance with Section VII.B.6 of the Enforcement Policy and refrain from issuing enforcement action

for a violation of the Technical Specifications for reactor coolant system pressure boundary leakage.

Enforcement discretion was warranted because the violation involved an equipment failure that was not

avoidable by reasonable quality assurance measures or management controls and was considered to have

resulted from matters not within the licensee's controls.

Gulf Coast Testing Laboratory, Inc. EA 01-023

Pinellas Park, Florida

On January 24, 2001, the NRC exercised enforcement discretion in accordance with Section VII.B.6 of

the Enforcement Policy for a violation involving the licensee's use of a portable moisture density gauge

at a location within the NRC's jurisdiction without first obtaining an NRC specific or general license.

Although the failure to file reciprocity is normally cited as a Severity Level III violation, the NRC

- 17 -
OE Annual Report

concluded that the lack of clarity of a license condition within the licensee's Florida license contributed

to the licensee's misinterpretation that it's Florida license permitted use of the licensed material

anywhere in the State of Florida.

Jameson Memorial Hospital EA 01-103

New Castle, Pennsylvania

On September 25, 2001, a letter was issued documenting the NRC's decision to exercise enforcement

discretion in accordance with Section VII.B.6 of the Enforcement Policy for a Severity Level III violation

involving the failure to maintain the whole body dose to a physician below 5 rem. The licensee replied in

a letter dated March 22, 2001, that it had used a different dose evaluation methodology that concluded

that it was within the regulatory limit. Although this methodology was not specifically approved for use

by the licensee, the NRC concluded that discretion was warranted because the licensee's dose evaluation

methodology is accepted by the State of Pennsylvania and is similar to other accepted methodologies.

The NRC is currently evaluating the use of alternative dose evaluation methodologies and is developing

its regulatory and technical positions on this issue.

NDT Services, Inc. EA 00-031

Caguas, Puerto Rico

On October 17, 2000, a Notice of Violation was issued for a Severity Level I violation based on multiple

failures of two former Radiation Safety Officers (RSOs) to ensure that radiation safety activities were

performed in accordance with approved procedures and regulatory requirements. Discretion was

exercised pursuant to Section VII.B.6 of the Enforcement Policy and a civil penalty was not proposed

because NDTS transferred all licensed material to authorized recipients; NDTS was no longer conducting

business or licensed activities; and NDTS requested that the license be terminated.

Oklahoma State University EA 00-203

Stillwater, Oklahoma

On December 7, 2000, a Notice of Violation was issued for a Severity Level III violation associated with

the use of licensed material (tritiated thymadine) in an unapproved and unauthorized location. Although

a civil penalty would normally be proposed by the civil penalty assessment process, the NRC exercised

discretion in accordance with Section VII.B.6 and to did not propose a penalty because of the licensee's

corrective actions and the low risk associated with the small amount of radioactive material.

Tennessee Valley Authority EA 00-163

Browns Ferry Nuclear Plant

On October 27, 2000, a Notice of Violation was issued for a Severity Level III violation involving the

failure to perform required evaluations for out-of-tolerance measuring and test equipment. Discretion

was exercised in accordance with Section VII.B.6 of the Enforcement Policy and a civil penalty was not

proposed because the NRC concluded that the underlying safety significance involving the unprocessed

nonconformance evaluations was low and because safety related plant component operability was

unaffected.

- 18 -
OE Annual Report . . I

Texas Engineering Experiment Station EA 01-029

Texas A&M University System

On May 21, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$2,400 was issued for a Severity Level II problem involving the transportation of radioactive material

from the research reactor facility to St. Croix, the Virgin Islands. The Severity Level H problem included

the failure, prior to shipment of radioactive material, to ensure that each closure device of the package

was properly installed, secured, and free of defects and the failure to train all hazardous material workers

involved in the shipment. Although a base civil penalty would normally be assessed in accordance with

the civil penalty assessment process, the NRC exercised enforcement discretion in accordance with

Section VII.B.6 of the Enforcement Policy and proposed 50 percent of the penalty because the sequence

of events was influenced, in part, by the actions of transportation workers who failed to adequately

respond when the integrity of the transportation container was breached.

Union Electric Company EA 01-093

Callaway Plant

On April 25, 2001, the NRC issued a letter documenting its decision to exercise enforcement discretion

in accordance with Section VII.B.6 of the Enforcement Policy and refrain from issuing enforcement

action for a violation of 10 CFR 50.59, "Changes, tests, and experiments." Enforcement discretion was

warranted because while this was a violation of the 10 CFR 50.59 rule in effect at the time the change to

the facility was made, it would not have violated the current 10 CFR 50.59 rule.

5. Actions Against Individuals and Non-Licensees

During FY 2001, the agency issued 27 actions against individuals and non-licensees. The following

sections provide a breakdown of the actions based on whether the actions were issued to licensed or nonlicensed individuals, or non-licensees (vendors, contractors, or certificate holders). The section on orders

includes orders that were issued to individuals that prohibited or limited their activities in NRC-licensed

activities during the fiscal year.

A. Actions Against Licensed Individuals

During FY 2001, the agency issued two NOVs to licensed individuals. Appendix D includes a short

summary description of these actions.

B. Actions Against Non-Licensed Individuals

During FY 2001, the agency issued 11 orders and 10 NOVs to non-licensed individuals. Appendix D

includes a short summary description of each of these actions.

C. Actions Against Non-Licensees (Vendors, Contractors, and Certificate Holders)

During FY 2001, the agency issued two orders and two NOVs to non-licensees. Appendix E

includes a short summary description of each of these actions.

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OE Annual Report

6. Cases Involving Discrimination

The NRC vigorously pursues enforcement action against licensees or licensee contractors who

discriminate against their employees for raising nuclear safety concerns. Acts of discrimination include

discharge and other adverse actions that relate to an employee's compensation, terms, conditions, or

privileges of employment.

The NRC places a high value on nuclear industry employees being free to raise potential safety concerns,

regardless of the merits of the concern, to both licensee management and the NRC. Unlawful adverse

actions taken against employees for raising safety concerns may create a "chilling effect" on the

employee or other workers who may wish to raise concerns. That is, the employees may not feel that

they are free to raise concerns without fear of retaliation.

Therefore, one of the goals of the NRC's enforcement program is to ensure, through appropriate

enforcement action against a licensee or licensee contractor (and when warranted, against the individual

personally responsible for the act of discrimination), that adverse employment actions taken against

licensee or contractor employees for raising safety concerns do not have a chilling effect on the

individual or others who may wish to report safety concerns.

During FY 2001, the agency issued eight enforcement actions for violations involving discrimination.

Seven actions were issued to licensees and one was issued to a vendor. These cases are listed here and

discussed further in the appropriate appendix. Figure 6 on page 29 includes escalated enforcement trends

since fiscal year 1995 for discrimination cases.

United States Enrichment Corporation NOV EA 00-047

Earthline Technologies $17,600 Civil Penalty EA 99-290

Temple University Hospital $8,800 Civil Penalty EA 00-156

Union Electric Company (Callaway) $55,000 Civil Penalty EA 01-005

United States Enrichment Corporation $88,000 Civil Penalty EA 99-110

Department of Veterans Affairs (Philadelphia) Imposition of $5,500 Civil Penalty EA 00-086

Tennessee Valley Authority Imposition of $110,000 Civil Penalty EA 99-234

Wackenhut Nuclear Services NOV EA 01-006

7. Hearing Activities

During FY 2001, two cases had some type of hearing activity, i.e., hearing request, settlement, dismissal,

discovery, hearing proceeding, appeal, etc. Appendix F includes a short summary of these cases.

8. 10 CFR 2.206 Petitions

During FY 2001, one case had some type of petition activity pending before the Office of Enforcement

during the fiscal year, i.e., petition request, NRC staff review, Director's Decision, etc. Appendix G

includes a short summary of this case.

9. Withdrawn Actions

During FY 2001, two civil penalty actions were withdrawn. Appendix H includes a short summary of

these cases.

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OE Annual Report

Escalated Enforcement By Office

25

20

151

10-

5-

0

Region I Region 11 Region IllRegion IV NMSS NRR

* Escalated NOVs * Civil Penalties

D Orders * Impositions

Figure 3

- 21 -
;. , IOE . . Annual Report

TABLE 1: ESCALATED ENFORCEMENT ITEMS

BY TYPE OF LICENSEE, NON-LICENSEE, OR INDIVIDUAL

Type of Escalated NOVs Civil Penalties Orders Impositions Total FY 01

Licensee (w/o penalty)

Academic 3 1 0 0 4

Physician 1 3 0 0 4

Fuel Facility 6 0 0 0 6

Gauge User 8 3 0 1 12

Hospital 12 2 0 1 15

Irradiator 0 0 0 0 0

Radiographer 15 4 0 2 21

Radiography 0 1 0 0

Fabricator

Pharmacy 0 1 0 0 1

Operating 22 2 0 1 25

Reactor

Research 0 1 0 0 1

Reactor

Materials 2 1 0 0 3

Distributer

Mill 0 0 0 0 0

Other 3 1 0 0 4

Waste Disposal 0 0 0 0 0

Well Logger 3 0 0 0 3

Non-Licensee 2 0 2 0 4

Licensed 2 0 0 0 2

Individual

(reactor)

Non-Licensed 2 0 3 0 5

Individual

(reactor)

Non-Licensed 8 0 8 0 16

Individual

(materials)

Total 89 20 13 5 127

-22 -
OE Annual Report

Escalated Enforcement By

Academic

Physician Fuel Facility Gauge User - _ _ Hospital -

Irradiator

Radiographer -

Radiography Fabricator

Pharmacy Operating Reactor -

Research Reactor

Materials Distributer

Mill

Other

Waste Disposal Well Logger

Non-Licensee

Licensed Indidual (R) Non-Licensed Individual (R)R Non-Licensed Individual (M) - _ =

Type

].

-I-Il

- - -

I I I I

0 5 10 15 20 25

U

DEscalated NOVs

Orders

U

U

Civil Penalties

Impositions

Figure 4

NOTE: Licensed and Non-Individual (R) = individuals working for reactor licensee

Non-Licensed Individual (M) = individuals working for materials licensee

CO) 

-23 -
OE Annual Report

-24 -
OE Annual Report

TABLE 2: CIVIL PENALTY INFORMATION

I FI 99 I FY 98 1 FY 97 I FY 96 1 FY 95

Number of 20 16 24 76 112 78 59

Proposed

Civil Penalties

Number of 5 4 5 6 10 9 10

Imposed

Civil Penalties

Number of Civil 17 16 21 68 108 56 47

Penalties Paid . l

Amount of $342,900 $446,600 $1,062,600 $5,206,600 $7,422,300 $3,832,500 $2,263,950

Proposed

Civil Penalties l

Amount of $139,900 $231,550 $913,750 $115,650 $285,250 $44,500 $615,250

Imposed

Civil Penalties .

Amount of Civil $294,100 $430,500 $1,070,850 $6,493,573 $6,657,300 $3,014,000 $2,265,949

Penalties Paid . .

NOTE: This table includes information based on individual civil penalty assessments. An enforcement

action may include more than one individual civil penalty. In addition, a civil penalty may be

proposed in one fiscal year and paid or imposed in another fiscal year.

-25 -
OE Annual Report

- 26 -
OE Annual Report

Escalated Enforcement Trends

140

120

100

80

60

40

20

FY 95 FY 96 FY 97 FY 98 FY 99 FY 00 FY 01

* Escalated NOVs

D Orders

* Ci Penales

* Impositions

Figure 5

-27 -

COLF
OE Annual Report

- 28 -
OE Annual Report

Escalated Enforcement Based on Discrimination

25

20

15

10

5

0

FY 95 FY 96 FY 97 FY 98 FY99 FY00 FY01

L Vendors . Individuals . Licensees

Figure 6

- 29 -

CO-5 
OE Annual Report

-30 -
Appendix A

APPENDIX A: SUMMARY OF ESCALATED NOTICES OF

VIOLATION (WITHOUT CIVIL PENALTIES)

Accurate NDE & Inspection, LLC EA 00-300

Opelousa, Louisiana

On January 11, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

failure of Accurate NDE & Inspection, a licensee of the State of Louisiana, to file NRC Form 241,

"Report of Proposed Activities in Non-Agreement State," prior to conducting radiographic operations

using iridium-192 on off-shore oil/gas platforms in waters off of the Gulf of Mexico in areas of Federal

jurisdiction.

Alaska Industrial X-Ray, Inc. EA 01-015 and EA 01-016

Anchorage, Alaska

On April 25, 2001, a Notice of Violation was issued for two Severity Level III violations. The first

violation involved the deliberate failure to assure that two qualified radiography personnel were present

during radiographic operations. Although a civil penalty would normally be proposed for this case, the

NRC exercised enforcement discretion in accordance with Section VII.B.6 of the Enforcement Policy and

refrained from issuing a civil penalty because the violation would not have been identified had the

involved radiographer not voluntarily provided information during the investigation. The second

violation involved the failure of a radiographer's assistant to wear an alarm ratemeter while involved in

radiographic operations.

Allied Inspection Services, Inc. EA 01-099

St. Clair, Michigan

On June 4, 2001, a Notice of Violation was issued for a Severity Level III violation involving the willful

failure to test exposure devices using depleted uranium (DU) shielding and an "S" tube configuration for

DU contamination within the required interval. Although a base civil penalty would normally be

proposed for this case, the NRC exercised enforcement discretion in accordance with Section VII.B.6 of

the Enforcement Policy and refrained from issuing a civil penalty because the safety significance of the

violation was low; there was no tangible benefit to the individual or licensee; and the individual accepted

responsibility, cooperated with the NRC, and voluntarily disclosed the violation to the NRC.

Allied Inspection Services, Inc. EA 01-213

St. Clair, Michigan

On September 17, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

a radiographer's failure to wear a direct reading dosimeter and a personal dosimeter at all times during

radiographic operations.

AmerGen Energy Company, LLC EA 01-115

Three Mile Island

On July 5, 2001, a Notice of Violation was issued for a violation associated with a white SDP finding

involving the motor driven emergency feedwater (EFW) pump. The violation was based on the

licensee's failure to promptly identify and correct a significant condition adverse to quality that resulted

-31 -
Appendix A

in the 'A' motor driven EFW pump being inoperable for longer than the technical specification allowed

outage time.

Arthur Brisbane Child Treatment Center EA 99-171

Farmingdale, New Jersey

On August 16, 2001, a Notice of Violation was issued for a Severity Level III problem involving

deliberate improper disposal of radioactive material generated from the cleanup of a broken exit sign and

deliberate submittal of inaccurate information to the NRC. Although a base civil penalty would normally

be proposed for this case, the NRC exercised enforcement discretion in accordance with Section VII.B.6

of the Enforcement Policy and refrained from issuing a civil penalty because the licensee was issued a

civil penalty for the event by the State of South Carolina and the licensee is no longer a general licensee.

Black Warrior Wireline Corporation EA 01-095

Columbus, Mississippi

On May 27, 2001, a Notice of Violation was issued for a Severity Level III violation involving the failure

of Black Warrior Wireline Corporation, a licensee of the State of Louisiana, to file NRC Form 241,

"Report of Proposed Activities in Non-Agreement State, Areas of Exclusive Federal Jurisdiction, or

Offshore Waters," prior to conducting well logging operations using americium-241/beryllium sealed

sources in offshore waters off of the Gulf of Mexico in areas of Federal jurisdiction.

Carolina Power & Light Company EA 00-263

Shearon Harris Nuclear Power Plant

On February 2, 2001, a Notice of Violation was issued for a violation associated with a white SDP

finding involving the inoperability of the charging/safety injection pump (CSIP). The violation was

based on the licensee's failure to maintain operability of the CSIP in accordance with the technical

specifications.

Central Michigan Community Hospital EA 99-005

Mount Pleasant, Michigan

On April 2, 2001, a Notice of Violation was issued for a willful Severity Level III violation involving the

use of byproduct material (technetium-99m) by an unqualified individual who was not under the

supervision of an authorized user.

CE Nuclear Power LLC EA 00-200

Festus, Missouri

On December 8, 2000, a Notice of Violation was issued for a Severity Level III problem based on the

failure to properly classify, describe, mark, and label packages containing radioactive material when the

licensee shipped uranium/gadolinium pellets and enriched pellets to Sweden and the failure to promptly

complete a Nuclear Material Transaction Report for the shipment of natural uranium pellets to Sweden.

-32 -
Appendix A

Citizens General Hospital EA 01-134

New Kensington, Pennsylvania

On June 1, 2001, a Notice of Violation was issued for a Severity Level III violation involving the failure

to provide required security and control of two licensed sources, each of which contained approximately

40 millicuries of gadolinium-153.

Columbia/HCA Healthcare Corporation EA 00-221

Anchorage, Alaska

On October 13, 2000, a Notice of Violation was issued for a Severity Level m violation based on the

failure of the licensee's quality management program to include written procedures to ensure

brachytherapy treatments were in accordance with written directives that resulted in four medical

misadministrations.

Consolidated Edison Company of New York EA 00-179

Indian Point 2

On November 20, 2000, a Notice of Violation was issued for a violation associated with a red SDP

finding. The violation involved the licensee's failure to identify and correct a significant condition

adverse to quality involving the presence of primary water stress corrosion cracking flaws in the steam

generator tubes, despite opportunities during the 1997 refueling outage. As a result, one of the tubes

failed on February 15, 2000, when the reactor was at 100% power.

Constellation Nuclear EA 01-206

Calvert Cliffs

On September 19, 2001, a Notice of Violation was issued for a violation associated with a yellow SDP

finding involving the failure of the auxiliary feedwater pump (AFW) turbine bearing. The violation cited

the licensee's failure to follow procedures involving reassembly of the AFW pump outboard bearing

housing.

Cooperheat-MQS Inspection, Inc. EA 01-166

Houston, Texas

On September 18, 2001, a Notice of Violation was issued for a Severity Level III violation involving

multiple failures to use certified radiographers while performing radiography operations.

Detroit Edison Company EA 01-092

Fermi 2 Nuclear Power Plant

On September 14, 2001, a Notice of Violation was issued for a violation associated with a white SDP

finding involving a catastrophic bearing failure of the emergency diesel generator (EDG). The violation

was cited against the licensee's failure to establish adequate design control measures for modifying the

oil sight glass indicator and associated piping for the EDG outboard bearing.

-33 -
Appendix A

District Health Partners, LP. EA 01-020

George Washington University Hospital

On March 22, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

failure of the licensee's quality management program to include a written procedure to ensure that

brachytherapy applicators were adequately secured during treatment so that the intended treatment site

received the prescribed exposure treatment and other sites received the planned dose.

Draper Aden Associates EA 01-107

Richmond, Virginia

On June 4, 2001, a Notice of Violation was issued for a Severity Level III violation involving the failure

to properly block and brace a portable gauge prior to and during transport that resulted in the loss of

control of the gauge.

Duke Energy Corporation EA 00-137

Oconee Nuclear Station

On November 9, 2000, a Notice of Violation was issued for a violation associated with a white SDP

finding. The violation involved the failure to adequately establish design control measures involving the

high pressure injection system using the spent fuel pool as a suction source following a tornado.

Duke Energy Corporation EA 01-125

Oconee Nuclear Station

On July 18, 2001, a Notice of Violation was issued for a violation associated with a white SDP finding.

The violation involved inadequate procedures for aligning the station auxiliary service water pump to

mitigate a tornado and the licensee's failure to take prompt corrective action for this adverse condition

even though the licensee had identified the condition approximately one year earlier.

Earthline Technologies (previously RMI Environmental Services) EA 01-037

Ashtabula, Ohio

On September 24, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

failure to secure from unauthorized removal or limit access to licensed material in an unrestricted area

and failure to control and maintain constant surveillance of licensed material. A Notice of Violation and

Proposed Imposition of Civil Penalty in the amount of $17,600 was also issued in conjunction with this

case (see EA 99-290 in Appendix B).

Exelon Generation Company, LLC EA 01-147

Clinton

On August 22, 2001, a Notice of Violation was issued for a violation associated with a white SDP

finding. The violation involved the licensee's failure to correct self-identified deficiencies disclosed

through control room communicator drills in 1999 and 2000.

- 34 -
Appendix A

Exelon Generation Company, LLC EA 01-148

Peach Bottom

On August 22, 2001, a Notice of Violation was issued for a violation associated with a white SDP

finding. The violation involved the licensee's failure to maintain adequate emergency facilities and

equipment (public address and evacuation alarm system) required to support an emergency response.

Framatome ANP Richland, Inc. EA 99-154

Rich land, Washington

On June 5, 2001, a Notice of Violation was issued for a Severity Level III problem involving willfully:

(1) shipping licensed material in unapproved packages, (2) exporting licensed material that did not meet

required packaging requirements, (3) certifying in shipping papers that an export shipment complied with

applicable shipping requirements, and (4) failing to maintain approved operating procedures.

Franklin Hospital Corporation EA 01-200

Franklin, Virginia

On August 1, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

licensee's failure to maintain control and constant surveillance of licensed byproduct material involving

radiopharnaceuticals in an unrestricted area.

GeoConsult, Inc. EA 00-279

San Juan, Puerto Rico

On January 23, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

failure to maintain control and constant surveillance of licensed material (a moisture density gauge

containing 10 millicuries of cesium-137 and 50 millicuries of americium-241) in an unrestricted area.

Gilmore and Associates, Inc. EA 01-010

New Britain, Pennsylvania

On February 13, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

licensee's failure to maintain control and constant surveillance of licensed material (a portable gauge

containing 8 millicuries of cesium-137 and americium-241) in an unrestricted area.

Global X-Ray & Testing Corporation EA 01-046

Morgan City, Louisiana

On March 8, 2001, a Notice of Violation was issued for a Severity Level m violation involving the

failure to perform radiation surveys following radiographic exposures using pipeliner radiography

devices. A Notice of Violation and Proposed Imposition of Civil Penalty in the amount of $5,500 for a

Severity Level III violation was also issued in conjunction with this case (see EA 00-272 in Appendix B).

-35 -
Appendix A

Griffith Electric Company, Inc. EA 01-114

Trenton, New Jersey

On May 4, 2001, a Notice of Violation was issued for a Severity Level m violation involving the transfer

of licensed byproduct material (EXIT signs containing tritium) without a specific license.

Gulf Coast Testing International Inspection, Inc. EA 00-294

Houma, Louisiana

On March 27, 2001, a Notice of Violation a Severity Level m violation involving the failure of a

radiographer to wear an alarming ratemeter when conducting radiographic operations. A Notice of

Violation and Proposed Imposition of Civil Penalty in the amount of $5,000 for a Severity Level III

violation was also issued in conjunction with this case (see EA 00-293 in Appendix B).

Idaho State University EA 01-081

Pocatello, Idaho

On April 5, 2001, a Notice of Violation was issued for a Severity Level III violation involving the failure

to control and maintain constant surveillance over licensed material (1.5 millicuries of iodine-125) that

was in a controlled area.

Law Engineering and Environmental Services, Inc. EA 00-302 and EA 00-304

Dorado, Puerto Rico

On January 24, 2001, a Notice of Violation was issued for a Severity Level III problem and a Severity

Level III violation involving an event that occurred during a radiography source exchange. The Severity

Level III problem involved: (1) failure to survey, (2) failure to follow procedures in accordance with

manufacturer's instructions, (3) failure to receive proper training prior to use, and (4) failure to perform

required visual and operability check prior to using the source changer. The Severity Level III violation

involved the radiographer's and Radiation Safety Officer's failure to stop activities and read the survey

meter upon the sounding of the alarm ratemeter.

Macia Consulting Enterprises, Inc. EA 01-123

Poughkeepsie, New York

On May 31, 2001, a Notice of Violation was issued for a Severity Level III violation involving the failure

to maintain required security of two portable nuclear density gauges containing 8 millicuries of

cesium-137 and 40 millicuries of americium-241 at a temporary job site (Newark International Airport).

Mallinckrodt, Inc. EA 00-178

Maryland Heights, Missouri

On December 21, 2000, a Notice of Violation was issued for a Severity Level III violation involving the

failure to properly survey. A Notice of Violation and Proposed Imposition of Civil Penalty in the amount

of $125,000 was also issued for a Severity Level I problem (see EA 00-178 in Appendix B).

-36 -
Appendix A

Mallinckrodt, Inc. EA 01-108

Maryland Heights, Missouri

On July 3, 2001, a Notice of Violation was issued for a Severity Level HI violation involving the failure

to prepare a package containing licensed material that was transported outside the confines of the

licensee's plant, so that under conditions normally incident to transport, the radiation levels would not

exceed 200 millirems per hour at any point on the external surface of the package.

Martin Marietta Aggregates EA 01-163

Raleigh, North Carolina

On August 21, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

unauthorized transfer of a fixed gauging device containing 50 millicuries of cesium-I 37 to a metal

recycling facility that was not authorized to receive and possess such licensed material.

Medical X-Ray Center, P.C. EA 01-018

Sioux Falls, South Dakota

On February 15, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

failure to control and maintain constant surveillance of licensed material (iridium-192) that was in a

controlled or unrestricted area and not in storage.

Mercy Hospital EA 01-133

Pittsburgh, Pennsylvania

On June 12, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

transfer of depleted uranium to an entity (South Pittsburgh Cancer Center) that was not authorized to

receive such material under the terms of an NRC or Agreement State license.

National Institutes of Health EA 01-001

Bethesda, Maryland

On January 17, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

licensee's failure to make surveys that were necessary to assure compliance with the regulations that

limit radiation exposure to the skin of a minor to 5 rem.

NDT Services, Inc. EA 00-031

Caguas, Puerto Rico

On October 17, 2000, a Notice of Violation was issued for a Severity Level I violation based on multiple

failures of two former Radiation Safety Officers (RSOs) to ensure that radiation safety activities were

performed in accordance with approved procedures and regulatory requirements. Discretion was

exercised pursuant to Section VII.B.6 of the Enforcement Policy and a civil penalty was not proposed

because NDTS transferred all licensed material to authorized recipients; NDTS was no longer conducting

business or licensed activities; and NDTS's license was terminated on October 16, 2000.

-37 -
Appendix A

Nebraska Public Power District EA 01-154

Cooper Nuclear Station

On August 13, 2001, a Notice of Violation was issued for a violation associated with a white SDP

finding. The violation involved the failure to correct a risk-significant performance weakness that was

identified in an emergency planning exercise in August 2000, such that it repeated during an April 2001

drill.

Niagra Mohawk Power Corporation EA 01-011

Nine Mile Point Nuclear Station

On May 2, 2001, a Notice of Violation was issued for a Severity Level m violation involving the

deliberate failure of an NRC-licensed chief shift operator to provide complete and accurate information

on health history forms that were required for the Fitness-For-Duty regulations.

Nondestructive & Visual Inspection, Inc. E4 01-216

Harvey, Louisiana

On September 28, 2001, a Notice of Violation was issued for a Severity Level HI violation involving the

failure of Nondestructive & Visual Inspection, Inc., a licensee of the State of Louisiana, to file NRC

Form 241, "Report of Proposed Activities in Non-Agreement State," prior to conducting radiographic

operations using curie quantities of iridium-192 on off-shore platforms in waters off of the Gulf of

Mexico in areas of Federal jurisdiction.

North Atlantic Energy Services Corporation EA 01-032

Seabrook Station

On June 29, 2001, a Notice of Violation was issued for a violation associated with a white SDP finding

involving the emergency diesel generator (EDG). The violation was based on the licensee's failure to

take adequate corrective actions to address degraded components associated with the EDG.

Nuclear Management Company, LLC EA 00-214

Kewanee Nuclear Power Plant

On February 28, 2001, a Notice of Violation was issued for a violation associated with a white SDP

finding involving the emergency response staffing drills. The violation was based on the fact that timely

augmentation of response capabilities was not available and that the licensee failed to correct

deficiencies that were identified as a result of several monthly drill failures.

-38 -
Appendix A

Northeast Nuclear Energy Company EA 00-236

Millstone Unit 2

On December 6, 2000, a Notice of Violation was issued for a violation associated with a white SDP

finding involving the degraded condition of the turbine-driven auxiliary feedwater (TDAFW) pump. The

violation was based on the licensee's failure to promptly correct a significant condition adverse to quality.

involving the speed control mechanism for the TDAFW.

Nuclear Management Company, LLC EA 00-282

Prairie Island Nuclear Power Plant

On February 20, 2001, a Notice of Violation was issued for a violation associated with a white SDP

finding involving the potential inability of the deep cooling water (service water) pumps to perform their

intended safety function. The violation was based on the licensee's failure to ensure that design control

measures would verify the adequacy of the design and would assure that appropriate quality standards

were specified.

Oklahoma State University EA 00-203

Stillwater, Oklahoma

On December 7, 2000, a Notice of Violation was issued for a Severity Level Ill violation associated with

the use of licensed material (tritiated thymadine) in an unapproved and unauthorized location. Although

a civil penalty would normally be proposed by the civil penalty assessment process, the NRC exercised

discretion in accordance with Section VII.B.6 and to did not propose a penalty because of the licensee's

corrective actions and the low risk associated with the small amount of radioactive material.

Pechiney Rolled Products, LLC EA 00-232

Ravenswood, Vest Virginia

On December 1, 2000, a Notice of Violation was issued for a Severity Level III problem involving: (I)

the failure to properly control access to licensed material contained in an Accuracy Model U-6 fixed

gauge, (2) the failure to ensure workers were properly trained on the operation and maintenance of the

gauging system, and (3) the removal and relocation of the gauge by individuals not authorized to do so.

Perf-O-Log, Inc., EA 01-060

Broussard, Louisiana

On April 10, 2001, a Notice of Violation was issued for a Severity Level III violation based on Perf-OLog Inc., a State of Louisiana Licensee, conducting well logging operations using americium241/beryllium sealed sources in offshore waters without filing a Form 241, "Report of Proposed

Activities in Non-Agreement State," with the NRC.

- 39 -
Appendix A

PPL Susquehanna, LLC EA 01-012

Susquehanna Steam Electric Station

On March 12, 2001, a Notice of Violation was issued for a violation associated with a white SDP finding

involving a substantial potential for personnel to sustain external radiation exposures in excess of

occupational exposure limits. The violation involved the failure to perform an adequate evaluation of

radiation hazards to assure that occupational dose limits would not be exceeded.

PPL Susquehanna, LLC EA 01-187

Susquehanna Steam Electric Station

On September 13, 2001, a Notice of Violation was issued for a violation associated with a white SDP

finding involving certain emergency preparedness functions for an emergency at the site not being met.

The violation involved the failure to ensure that procedures were adequate and staffing levels were

maintained to meet the site's emergency plan requirements.

Sibley Memorial Hospital EA 00-245

Washington, DC

On February 26, 2001, a Notice of Violation was issued for a Severity Level III violation involving

failure of the licensee's quality management program to include an adequate written procedure to meet

the objective that each administration of byproduct material or radiation from byproduct material is in

accordance with a written directive.

Sioux Valley Hospital Association EA 00-177

Sioux Falls, South Dakota

On November 30, 2000, a Notice of Violation was issued for a Severity Level m violation. The action

was based on multiple failures to implement the licensee's quality management program from calendar

year 1997 through April 2000. The technologist failed to verify, prior to administering byproduct

material, that the specific details of the administration were in accordance with the written directive.

These failures contributed to 66 recordable events and one medical misadministration.

South Carolina Electric & Gas Company EA 00-238

Virgil C. Summer

On December 28, 2000, a Notice of Violation was issued for a violation associated with a white SDP

finding involving the inoperability of the turbine driven emergency feedwater (TDEFW) pump. The

violation cited the licensee's failure to properly follow procedures which resulted in the failure to comply

with the technical specification for TDEFW pump operability.

Southeast Missouri State University EA 01-151

Cape Girardeau, Missouri

On September 13, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

failure to secure from unauthorized removal or limit access to a strontium-90 sealed source with a

nominal activity of 20 millicuries and failure to control and maintain constant surveillance of this

licensed material. A Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$1 1,000 for a Severity Level I problem was also issued (see EA 00-201 in Appendix B).

-40 -
Appendix A

St. Mary's Medical Center EA 00-193

Evansville, Indiana

On October 27, 2000, a Notice of Violation was issued for a Severity Level III violation involving the

failure to prepare written directives prior to administering quantities of sodium iodide iodine-131 for

diagnostic whole-body imaging.

Stork MSC EA 01-194

Louisville, Kentucky

On August 3, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

failure to control or maintain constant surveillance of a radiography exposure device containing

approximately 29 curies of iridium-192 in an unrestricted area.

SWVA, Inc. dibla Steel of West Virginia, Inc. EA 01-128

Huntington Beach, West Virginia

On June 27, 2001, a Notice of Violation was issued for a Severity Level III violation involving the failure

to secure from unauthorized removal or limit access to three gauges containing 500 mCi of cesium-1 37

(Cs-137) and failure to control and maintain constant surveillance of this licensed material.

Tennessee Valley Authority EA 00-163

Browns Ferry Nuclear Plant

On October 27, 2000, a Notice of Violation was issued for a Severity Level III violation involving the

failure to perform required evaluations for out-of-tolerance measuring and test equipment. Discretion

was exercised in accordance with Section VII.B.6 of the Enforcement Policy and a civil penalty was not

proposed because the NRC concluded that the underlying safety significance involving the unprocessed

nonconformance evaluations was low and because safety related plant component operability was

unaffected.

Testwell Laboratories, Inc. EA 01-149

Ossining, New York

On June 14, 2001, a Notice of Violation was issued for a Severity Level III violation based on Testwell

Laboratories, Inc., a licensee of the State of New York, using portable gauges in New Jersey, a nonAgreement State, without a specific license from the NRC and without filing a Form 241, "Report of

Proposed Activities in Non-Agreement State," with the NRC.

Titan Atlantic Group EA 00-191

Raleigh, North Carolina

On October 12, 2000, a Notice of Violation was issued for a Severity Level III violation based on the

performance of radiography in an NRC jurisdiction by individuals who were not certified through a

radiographer certification program.

-41 -
Appendix A

Union Electric Company

Callaway

EA 00-208

On January 9, 2001, a Notice of Violation was issued for a violation associated with three white SDP

findings involving performance deficiencies in the licensee's procedures and engineering controls

designed to achieve occupational doses that are as low as is reasonably achievable (ALARA).

Union Electric Company EA 01-130

Callaway

On July 23, 2001, a Notice of Violation was issued for a violation associated with a white SDP

inspection finding involving the essential service water (ESW) pump. The violation cited the

inoperability of two essential service water trains for approximately 132 hours.

United States Enrichment Corporation

Paducah Gaseous Diffusion Plant

EA 99-256 and EA 00-047

On January 3, 2001, A Notice of Violation was issued for a Severity Level HI problem involving:

(1) creation of classified information on an unclassified computer system and (2) deliberate failure to

report the infraction to the NRC Regional Administrator per regulation; and (3) the deliberate failure to

initiate a corrective action report for the security infraction. A Notice of Violation was also issued for a

Severity Level III violation involving the Corporation discriminating against a security supervisor

through the actions of the then site Security Manager for having engaged in protected activities at the

Paducah Gaseous Diffusion Plant.

South Carolina Electric & Gas Company

Virgil C. Summer Nuclear Station

EA 01-150

On August 31, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

failure to perform an adequate written safety evaluation to determine whether a change to the facility

involved an unreviewed safety question.

Weatherford Drilling International, Inc.

Houston, Texas

EA 01-030

On February 5, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

failure of Weatherford International, Inc., a licensee of the State of Louisiana, to file NRC Form 241,

"Report of Proposed Activities in Non-Agreement State," prior to conducting well logging operations

using americium-24I/beryllium sealed sources in offshore waters in areas of Federal jurisdiction.

WVestinghouse Electric Company

Columbia, South Carolina

EA 01-174

On August 31, 2001, a Notice of Violation was issued for a Severity Level HI problem involving multiple

violations related to an event involving the failure of criticality safety controls on the licensee's

ammonium diuranate process lines.

-42 -
Appendix A

Wheeling Hospital, Inc. EA 00-187

Wheeling, West Virginia

On October 12, 2000, a Notice of Violation for a Severity Level III was issued based on the failure to

maintain adequate security or control of licensed materials ( brachytherapy device containing an 8.98

curie iridium-192 sealed source and a transportation container containing a 3.422 curie iridium-192

sealed source).

X-Ray Inspection, Inc. EA 01-215

Alvin, Texas

On September 27, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

failure to have two qualified individuals present during radiography conducted at a temporary jobsite.

-43 -
Appendix A

- 44-
Appendix B

APPENDIX B: SUMMARY OF PROPOSED

CIVIL PENALTIES

Bayou Inspection Services, Inc. EA 00-297

Amelia, Louisiana

On April 2, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$5,500 was issued for a Severity Level m problem involving a willful failure to notify the NRC prior to

conducting industrial radiography operations in offshore waters (i.e., failure to file NRC Form 241) and a

willful failure to obtain an exemption from the NRC for the use of pipeliner radiography devices in

offshore waters.

Biomedical Scanning Services, Inc. EA 00-288

St. Louis, Missouri

On February 21, 2001, a Notice of Violation and Proposed imposition of Civil Penalty in the amount of

$8,800 was issued for a Severity Level II problem involving deliberate violations. These included:

(1) delivery of byproduct material without an authorized individual present, (2) delivery of byproduct

material to a client's address, and (3) providing inaccurate and incomplete information to the NRC.

Construction Engineering Labs, Inc. EA 01-181

Pearl City, Hawaii

On September 27, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$3,000 was issued for a Severity Level III problem involving willfulness. The problem consisted of two

violations involving the failure to secure and maintain constant surveillance over a gauge and failure to

assure that gauges were routinely secured in vehicles according to procedures.

Earthline Technologies (previously RMI Environmental Services) EA 99-290

Ashtabula, Ohio

On September 24, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$17,600 was issued for a Severity Level II violation. The violation was based on the licensee

discriminating against a radiation protection technician for engaging in protected activities. A Notice of

Violation for a Severity Level III violation was also issued in conjunction with this case (see EA 01-037

in Appendix A).

El Sefiorial PSI EA 01-145

Rio Piedras, Puerto Rico

On September 28, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$2,750 was issued for a Severity Level III violation. The violation was based on the failure to issue film

or thermoluminescent dosimeter whole body monitors to all individuals who were occupationally

exposed to ionizing photon radiation on a regular basis.

-45 -
Appendix B

Global X-Ray & Testing Corporation EA 00-272

Morgan City, Louisiana

On March 8, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$5,500 was issued for a Severity Level III violation involving the failure to use pipeliner radiography

devices in a manner described in a 1999 exemption granted by the NRC. A Notice of Violation for a

Severity Level III violation was also issued in conjunction with this case (see EA 01-046 in Appendix A).

Gulf Coast Testing International Inspection, Inc. EA 00-293

Houma, Louisiana

On March 27, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$5,500 was issued for a Severity Level III violation involving the licensee's willful failure to post

radiation and high radiation areas as required prior to conducting radiographic operations. A Notice of

Violation for a Severity Level m violation was also issued in conjunction with this case (see EA 00-294

in Appendix A).

Mallinckrodt, Inc. EA 00-180

Maryland Heights, Missouri

On October 4, 2000, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$2,750 was issued. The action was based on the failure to control the occupational dose to the skin or to

any extremity of an individual below the annual dose limit of 50 rems shallow-dose equivalent, and the

failure to make adequate surveys to assure compliance with 10 CFR 20.201.

Mallinckrodt, Inc. EA 00-178

Maryland Heights, Missouri

On December 21, 2000, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$125,000 was issued for a Severity Level I problem based on numerous failures to: (1) control activities

to keep occupational doses to workers within regulatory limits, (2) use procedures and engineering

controls to maintain doses as low as reasonably achievable, and (3) make necessary surveys to ensure

compliance with the regulations for protection against radiation. Although the normal civil penalty

assessment process would have resulted in a base civil penalty in the amount of $27,500, the NRC

exercised discretion in accordance with Section VII.A.I of the Policy and increased the penalty due to:

(1) the number of overexposures (31), (2) the severity of the overexposures, (3) the time frame over

which the exposures occurred, (4) the failure to identify the exposures despite multiple precursor events,

and (5) the licensee's poor enforcement history. A Notice of Violation was also issued for a Severity

Level m violation for a subsequent failure to properly survey (see EA 00-178 in Appendix A).

Midwest Testing, Inc. EA 01-119

Bridgeton, Missouri

On July 20, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$3,000 was issued for a Severity Level III violation involving the failure to control and maintain constant

surveillance of a portable density gauge that resulted in the loss of the gauge. Although the normal civil

penalty assessment process would have fully mitigated the civil penalty, a penalty was proposed in

accordance with Section VII.A.l.g of the Enforcement Policy to emphasize the significance of the loss of

licensed material in this case.

-46-
Appendix B

Nuclear Management Company, LLC EA 01-088

Palisades Nuclear Generating Station

On June 27, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$55,000 was issued for a Severity Level HI violation. The action was based on the licensee's failure to

provide complete and accurate information in letters to the NRC requesting enforcement discretion and

an exigent Technical Specification change.

South Pittsburgh Cancer Center EA 01-132

Pittsburgh, Pennsylvania

On August 22, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$8,800 was issued for a Severity Level II violation involving the deliberate possession of depleted

uranium (in the form of bricks used for shielding within two linear accelerators) without authorization in

a specific license issued by the NRC.

Southeast Missouri State University EA 00-201

Cape Girardeau, Missouri

On September 13, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$11,000 was issued for a Severity Level I problem involving the failure to: (1) control activities to limit

doses in accordance with requirements, (2) make necessary surveys to determine radiological hazards,

and (3) possess only material authorized on the University's license. Although a base civil penalty would

be warranted based on the normal civil penalty assessment process, the NRC exercised enforcement

discretion in accordance with Section VII.A.1 of the Enforcement Policy and increased the penalty by

100 percent based on the licensee's particularly poor performance. A Notice of Violation for a Severity

Level III violation was also issued (see EA 01-151 in Appendix A).

Stork/Twin City Testing EA 00-169

St. Paul, Minnesota

On December 15, 2000, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$11,000 was issued for a Severity Level III violation involving the deliberate failure to have two

individuals present during radiography at a temporary job site. The NRC exercised discretion in

accordance with Section VII.A.1 of the Enforcement Policy and increased the amount of the civil penalty

based on the duration of the violation, the financial gain as a result of the violation, and the willful nature

of the violation.

Temple University Hospital EA 00-156

Philadelphia, Pennsylvania

On October 19, 2000, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$8,800 was issued for a Severity Level II violation based on discrimination against a former Nuclear

Medicine Technologist for raising safety concerns.

-47 -
Appendix B

Testing Technologies EA 00-231

Woodbridge, Virginia

On November 14, 2000, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$5,500 was issued. The action was issued for a Severity Level III problem involving the failure to

(1) limit unrestricted area doses to less than two mrem in any one hour, (2) to post each radiation and

high radiation area with the appropriate sign, (3) to perform surveys necessary to demonstrate

compliance with the regulations and to evaluate the radiological hazards present. Although the normal

civil penalty assessment process would have mitigated the civil penalty, the NRC exercised discretion in

accordance with Section VII.A. I of the Enforcement Policy and proposed a base civil penalty in this case

because the failures involved particularly poor performance with respect to the overall conduct of

radiographic operations including fundamental radiological controls such as surveying, postings, and

surveilling.

Texas Engineering Experiment Station EA 01-029

Texas A&M University System

On May 21, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$2,400 was issued for a Severity Level II problem involving the transportation of radioactive material

from the research reactor facility to St. Croix, the Virgin Islands. The Severity Level II problem included

the failure, prior to shipment of radioactive material, to ensure that each closure device of the package

was properly installed, secured, and free of defects and the failure to train all hazardous material workers

involved in the shipment. Although a base civil penalty would normally be assessed in accordance with

the civil penalty assessment process, the NRC exercised enforcement discretion in accordance with

Section VII.B.6 of the Enforcement Policy and proposed 50 percent of the penalty because the sequence

of events was influenced, in part, by the actions of transportation workers who failed to adequately

respond when the integrity of the transportation container was breached.

Turabo Corporation EA 01-126

Caguas, Puerto Rico

On June 20, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$3,000 was issued for a Severity Level III violation involving the failure to secure from unauthorized

removal or limit access to two gauges containing approximately eight millicuries of cesium-137 and

50 millicuries of americium-241 and failure to control and maintain constant surveillance of this licensed

material.

Union Electric Company EA 01-005

Callaway

On May 14, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$55,000 was issued for a Severity Level III violation involving the Wackenhut Corporation, a contractor

of Union Electric (see EA 01-006 in Appendix E), and Union Electric discriminating against a security

officer and training instructor for having engaged in protected activity.

-48 -
Appendix B

University of Medicine & Dentistry of New Jersey EA 01-186

Newark, New Jersey

On September 25, 2001, a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$3,000 was issued for a Severity Level III problem. The problem included two violations involving the

failure to control and maintain constant surveillance of material in controlled or unrestricted areas and

the failure to make surveys (i.e., evaluations of the radiological conditions and potential hazards incident

to the use, transfer, release, disposal, or presence of radioactive material or other sources of radiation).

Although the normal civil penalty assessment process would have fully mitigated the civil penalty, a base

civil penalty was proposed in accordance with Section VII.A.l.g of the Enforcement Policy to emphasize

the significance of the loss of licensed material in this case.

-49 -
Appendix B

-50-
Appendix C

APPENDIX C: SUMMARY OF ORDERS

IMPOSITION OF CIVIL PENALTY ORDERS

Braun Intertec Corporation EA 00-147

Minneapolis, Minnesota

On November 14,2000, an Order Imposing Civil Monetary Penalty in the amount of $5,500 for a

Severity Level III violation involving the failure to have two qualified individuals present during

radiographic operations. The NRC reviewed the licensee's request for civil penalty mitigation dated

September 12, 2000, and concluded that the agency's original proposal remained valid.

Department of Veterans Affairs Medical Center EA 00-086

Phtiladelphia, Pennsylvania

On December 14, 2000, an Order Imposing Civil Monetary Penalty in the amount of $5,500 was issued.

The action was based on a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$5,500 that was issued on July 20, 2000, for a violation of the employee protection requirement. The

licensee's August 29, 2000, response denied the violation and requested that the violation be withdrawn

and the civil penalty rescinded. After considering the licensee's response, the NRC concluded that the

violation occurred as stated and that there was not an adequate basis for withdrawing the civil penalty.

Moisture Protection Systems Analysis, Inc. EA 98-213

Washington, DC

On April 2, 2001, an Order Imposing Civil Monetary Penalty in the amount of $5,500 was issued. The

action was based on a Notice of Violation and Proposed Imposition of Civil Penalty (Notice) in the

amount $5,500 that was issued on April 30, 1998, for failure to maintain licensed material, facilities, and

records available for inspection as required by 10 CFR 30.52. As of April 2, 2001, the licensee did not

respond to the Notice, nor did it comply with the requirements that it maintain licensed material in safe

storage, immediately notify the NRC of its current business location and status of licensed material, test

the sealed source for leak tightness, and transfer the licensed material to an authorized recipient. The

licensee has been unresponsive to the NRC's repeated attempts to discuss licensed activities associated

with the licensee. After considering the licensee's unresponsiveness, the NRC concluded that the

violation occurred as stated and that the penalty proposed for the violation should be imposed.

Stork/Twin City Testing EA 00-169

St. Paul, Minnesota

On February 20, 2001, an Order Imposing Civil Monetary Penalty in the amount of $11,000 was issued.

The action was based on a Notice of Violation and Proposed Imposition of Civil Penalty in the amount of

$11,000 that was issued on December 15, 2000, for a Severity Level m violation involving the deliberate

failure to have two individuals present during radiography at a temporary job site. The licensee's

December 21, 2001, response contested the violation and requested partial mitigation of the civil penalty.

After considering the licensee's response, the NRC concluded that the violation occurred as stated and

that there was not an adequate basis to mitigate the civil penalty.

-51 -
Appendix C

Tennessee Valley Authority EA 99-234

Watts Bar, Sequoyah, and Browns Ferry Nuclear Power Plants

On May 4, 2001, the NRC issued an Order Imposing Civil Monetary Penalty in the amount of $110,000

for a Severity Level II violation involving employment discrimination against a former corporate

employee for engaging in protected activities. The NRC reviewed the licensee's denial of the violation

and protest of the civil penalty dated January 22, 2000, and concluded that the agency's original proposal

remained valid.

CONFIRMATORY. MODIFICATION. SUSPENSION. AND CEASE & DESIST ORDERS

None.

-52 -
Appendix D

APPENDIX D: SUMMARY OF ACTIONS AGAINST

INDIVIDUALS (LICENSED & NON-LICENSED)

ORDERS

Hiram J. Bass IA 00-032

On October 27, 2000, an Order prohibiting involvement in NRC-licensed activities was issued based on

individual's deliberate failure to perform required evaluations for out-of-tolerance measuring and test

equipment.

Virgil J. Hood, Sr. IA 01-021

On September 12, 2001, an immediately effective Order prohibiting involvement in NRC-licensed

activities was issued based on the individual's deliberate actions (as President and Radiation Safety

Officer of Moisture Protection Systems Analysts) that caused the licensee to be in violation of an Order

Modifying Order Suspending License and Order Revoking License dated April 20, 1998, and 10 CFR

20.2201(a)(1)(i).

William and Joan Kimbley IA 00-024 and IA 00-025

On November 28, 2000, an immediately effective Order prohibiting involvement in NRC-licensed

activities was issued based on the individuals' deliberate possession of licensable byproduct material in

the form of nuclear moisture density gauges in violation of a June 12, 1995, Confirmatory Order issued

by the NRC. The two individuals were previously officers of Midwest Testing, Inc.

David D. Klepadlo IA 00-039

On November 3, 2000, an immediately effective Order prohibiting involvement in NRC-licensed

activities was issued to the individual for providing false information to the NRC regarding the

possession of two nuclear density gauges.

Rodney Lillard IA 00-006

On October 17, 2000, an Order prohibiting involvement in NRC-licensed activities was issued based on

the former Radiation Safety Officer's deliberate failure to report or ensure that a report was made to the

NRC within 30 days of the occurrence of a 1995 source disconnect event and failure to provide complete

and accurate information to the NRC when he advised an NRC inspector during a June 1995 inspection

that no reportable events had occurred.

Don Nottingham IA 00-008

On October 17, 2000, an Order prohibiting involvement in NRC-licensed activities was issued based on

the former senior radiographer's deliberate misconduct in violation of 10 CFR 30.10 when he permitted

assistant radiographers to perform unsupervised radiography on numerous occasions during the period of

1994 through 1995.

- 53 -
Appendix D

Garner W. Reed IA 00-028

On December 4, 2000, an Order prohibiting involvement in NRC-licensed activities was issued to the

individual based on deliberately submitting incomplete and inaccurate information on the history

questionnaire for unescorted access to Salem, Point Beach and Donald C. Cook Nuclear Power Plants

regarding his previous criminal history.

Johnny Lee Rochelle IA-007

On October 17, 2000, an Order prohibiting involvement in NRC-licensed activities was issued based on

the former senior radiographer's deliberate actions which caused a licensee to be in violation of NRC

regulations including (1) the creation of excessive radiation levels in unrestricted areas; (2) the failure to

survey and monitor areas surrounding the location where radiographic operations were being conducted;

(3) the failure to post radiation areas; (4) the failure to control access to areas that were required to be

restricted; and (5) permitting assistant radiographers to conduct radiographic operations without direct

observation.

Paige Rowland IA 01-023

On April 2, 2001, an Order prohibiting involvement in NRC-licensed activities was issued based on the

individual deliberately making false statements to the NRC that she had administered technetium-99m to

a patient at Central Michigan Community Hospital when she knew that an unqualified technician had

administered the technetium-99m under her direction.

Gail C. VanCleave IA 00-016

On November 6, 2000, an Order prohibiting involvement in NRC-licensed activities was issued to the

individual based on deliberately submitting incomplete and inaccurate information to the D.C. Cook

Nuclear Power Plant and communicating to an NRC investigator that she would repeat the deliberate acts

of falsification if in a similar financial situation.

NOTICES OF VIOLATION (NOVs)

Antonio J. Ambrad, M.D. IA 01-035

On August 22, 2001, a Notice of Violation was issued for a Severity Level II violation involving the

deliberate possession of depleted uranium (in the form of bricks used for shielding within two linear

accelerators) without authorization in a specific license issued by the NRC while acting as the Radiation

Safety Officer/owner of the South Pittsburgh Cancer Center.

Robert J. Bellan IA 01-032

On August 16, 2001, a Notice of Violation was issued for a Severity Level III problem while the

individual was employed at the Arther Brisbane Child Treatment Center that involved the deliberate

improper disposal of radioactive material generated from the cleanup of a broken exit sign and the

deliberate submittal of inaccurate information to the NRC.

- 54 -
Appendix D

Joseph Bieri IA 01-009

On February 9,2001, a Notice of Violation was issued for a Severity Level HI violation based on

violation of NRC requirements governing fitness-for-duty as a licensed operator while employed at the

D.C. Cook Nuclear Power Plant.

John Carter IA 01-044

On September 27, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

individual ( while employed at Construction Engineering Labs, Inc.) deliberately leaving a moisture

density gauge unsecured and unattended and deliberately providing false information to the NRC.

Kenneth D. Covell IA 01-015

On September 24, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

individual's deliberate failure while employed at Earthline Technologies, to secure from unauthorized

removal or limit access to licensed material in an unrestricted area and failure to control and maintain

constant surveillance of licensed material.

David Fitterer IA 00-034

On December 15, 2000, a Notice of Violation was issued for a Severity Level m violation involving the

Radiation Safety Officer's deliberate failure while employed at Stork/Twin City Testing to have two

individuals present during radiography at a temporary job site.

Andrew Grace IA 00-009

On January 3, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

individual's deliberate misconduct while employed as the security manager at the U.S. Enrichment

Corporation's Paducah Gaseous Diffusion Plant that caused the licensee to be in violation of NRC

requirements. The individual failed to promptly report a security infraction to the licensee and failed to

document the infraction in a corrective action report or report the infraction to the NRC.

James Halstead IA 01-004

On February 21, 2001, a Notice of Violation was issued for a Severity Level II problem involving

deliberate violations at Biomedical Scanning Services, Inc. These included: (1) delivery of byproduct

material without an authorized individual present, (2) delivery of byproduct material to a client's address,

and (3) providing inaccurate and incomplete information to the NRC.

Michael G. Keogh IA 01-041

On August 24, 2001, a Notice of Violation was issued for a Severity Level In violation involving

deliberate actions (while employed as a licensed operator at the Pilgrim Nuclear Power Station) in

creating a falsified record of a tour of the reactor building.

- 55 -
Appendix D

Michael Mennucci IA 01-024

On May 4, 2001, a Notice of Violation was issued for a Severity Level m violation involving the

individual's deliberate actions while employed at the Palisades Nuclear Station. Mr. Mennucci

deliberately falsified information on a corrective action document indicating that he had reviewed and

revised three radioactive material shipping procedures, when, in fact, two of the three procedures had not

been revised.

Joel Ramos, M.D. IA 01-040

On September 28, 2001, a Notice of Violation was issued for a Severity Level HI violation involving the

individual's deliberate actions, while employed as a Radiation Safety Officer at El Sefiorial PSI Nuclear

Medicine Laboratory, in failing to issue film or thermoluminescent dosimeter whole body monitors to all

individuals who were occupationally exposed to ionizing photon radiation on a regular basis.

Paul E. Ramseyer IA 01-028

On June 27, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

individual's deliberate actions (while employed at PECO Power Labs (PPL)) in fabricating and providing

false information to PPL (a reactor licensee contractor) and subsequently NRC-licensed facilities.

Craig P. Sanford IA 01-033

On August 16, 2001, a Notice of Violation was issued for a Severity Level III violation involving the

individual's deliberate actions (while employed at the Arthur Brisbane Child Treatment Center) in

providing the NRC with incomplete and inaccurate information.

DEMANDS FOR INFORMATION (DFIs)

Virgil J. Hood, Jr. IA 01-022

On September 12, 2001, a Demand For Information was issued requesting information regarding (1) the

individual's responsibilities as Vice President of NRC licensee, Moisture Protection Systems Analysts;

(2) whether he was an authorized user of the licensee's moisture density gauge; (3) why he failed to

respond to previous NRC communications; and (4) whether the individual would comply with NRC

regulatory requirements.

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Appendix E

APPENDIX E: SUMMARY OF ACTIONS

AGAINST NON-LICENSEES

(VENDORS, CONTRACTORS, AND CERTIFICATE HOLDERS)

ORDERS

JL Shepherd & Associates EA 01-164

San Fernando, California

On July 3, 2001, an immediately effective Order Withdrawing Quality Assurance Approval was issued.

The Order was based on the agency's lack of confidence that the company would implement the NRCapproved Quality Assurance (QA) Program in accordance with the regulations in a manner that would

assure the required preparation and use of transportation packages in full conformance with the terms and

conditions of the NRC Certificate of Compliance and 10 CFR Part 71.

JL Shepherd & Associates EA 01-164

San Fernando, California

On September 19, 2001, a Confirmatory Order was issued that relaxed certain provisions of the July 3,

2001, Order Withdrawing Quality Assurance Approval. The Confirmatory Order allowed the licensee to

make limited shipments based on the licensee's completion of specified corrective actions and the NRC's

inspection of those actions. The Quality Assurance Approval continues to be withdrawn.

CIVIL PENALTIES

None.

NOTICES OF VIOLATION (NOVs)

SMI East Coast Medical Waste, Inc. EA 01-064

Morrisville, Pennsylvania

On August 16, 2001, a Notice of Violation was issued for a Severity Level M violation involving the

company's deliberate actions in receiving byproduct material that it was not authorized to posses in

accordance with a general or specific license and in providing the NRC with incomplete and inaccurate

information.

Wackenhut ANuclear Services EA 01-006

Paln Beach Gardens, Florida

On May 14, 2001, a Notice of Violation was issued for a Severity Level III violation involving this

contractor of Union Electric, a 10 CFR Part 50 licensee, and Union Electric (see EA 01-005)

discriminating against a security officer and training instructor for having engaged in protected activity.

DEMANDS FOR INFORMATION (DFIs)

None.

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Appendix E

- 58 -
Appendix F

APPENDIX F: SUMMARY OF HEARING ACTIVITY

FirstEnergy Nuclear Operating Company (Perry Nuclear Power Plant) EA 99-012

On October 18, 2000, the licensee requested a hearing in response to an August 12, 2000, Order

Imposing Civil Monetary Penalty in the amount of $110,000. The civil penalty was based on a violation

of the employee protection requirement. On May 31, 2001, the Atomic Safety and Licensing Board

approved settlement of the case that included reducing the civil penalty from $110,000 to $80,000.

Tennessee Valley Authority EA 99-234

Watts Bar, Sequoyah, and Browns Ferry Nuclear Power Plants

On June 1, 2001, the licensee requested a hearing in response to a May 4, 2001, Order Imposing Civil

Monetary Penalty in the amount of $110,000 for a Severity Level II violation involving employment

discrimination against a former corporate employee for engaging in protected activities. At the close of

the fiscal year, the case was still in adjudication with both parties in the discovery process.

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Appendix F

- 60 -
Appendix G

APPENDIX Gl SUMMARY OF 10 CFR 2.206 ACTIVITY

Petition Regarding Hydro Nuclear Services/Westinghouse

A petition was received on July 18, 2000, regarding Hydro Nuclear Services/Westinghouse and/or its

successors, requesting: (1) that the NRC immediately ban Westinghouse from doing business in the

nuclear industry for willfully failing to comply with a U.S. Department of Labor (DOL) order; (2) that a

fine immediately be assessed against Westinghouse commensurate with a Severity Level I violation; and

(3) that each day of noncompliance count as a separate violation, with its own fine. The petitioner

asserted that Westinghouse's failure to comply with a DOL order created a chilled environment in the

nuclear industry. The staff concluded in a letter to the petitioner on October 18, 2000, that there was no

support for such an allegation in the petition and therefore, concluded that further review was not

warranted.

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Appendix G

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Appendix H

APPENDIX H: SUMMARY OF WITHDRAWN ACTIONS

Alfonso DeLeo, Jr. EA 99-057 and EA 99-217

Ardmore, Pennsylvania

On December 26, 2000, the NRC withdrew civil penalties that had been issued to the licensee in 1999 for

willful unauthorized possession of two nuclear density gauges. The NRC withdrew the civil penalties

because the licensee had transferred the gauges to an authorized recipient on October 23, 2000, and the

NRC terminated its license on November 9, 2000.

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Appendix H

-6CA-
Appendix I

APPENDIX 1: DISPOSITIONING OF ENFORCEMENT ISSUES

IN A RISK-INFORMED FRAMEWORK

December 5, 2000

MEMORANDUM TO: S. J. Collins, Director, Office of Nuclear Reactor Regulation

W. F. Kane, Director, Office of Nuclear Material Safeguards and Security

H. J. Miller, Regional Administrator, RI

L. A. Reyes, Regional Administrator, RiH

J. E. Dyer, Regional Administrator, RIII

E. W. Merschoff, Regional Administrator, RIV

FROM: R. W. Borchardt, Director, Office of Enforcement /RA/

SUBJECT: DISPOSITIONING OF ENFORCEMENT ISSUES IN A RISK INFORMED

FRAMEWORK

The changes to the inspection and oversight programs being implemented offer the promise of an

improved regulatory approach for how we carry out our responsibilities as a regulator. The enforcement

program has been, and continues to be modified in order to fully support these initiatives and ensure that

the enforcement program is implemented in a predictable and consistent manner. Identifying an issue,

assessing its risk significance, and verifying that the licensee has taken corrective action are important

elements of our mission. However, our responsibilities are not complete unless we also evaluate whether

issues documented in NRC inspection reports constitute violations and we disposition them accordingly.

As a regulatory agency, it is our responsibility to establish and enforce requirements. Integral to this

responsibility is the need to accurately disposition all violations that are discussed in inspection reports.

Licensees bear the responsibility to take appropriate corrective actions for identified problems. These are

appropriate and necessary regulatory burdens. I believe that the current enforcement program fully

supports the agency's performance goals by emphasizing the importance of compliance with existing

requirements (maintain safety), fully dispositioning documented violations (public confidence), being

fully coordinated with the NRR and NMSS oversight programs (effectiveness and efficiency), and

utilizing risk information and the NCV policy (reducing unnecessary regulatory burden).

As we have made the transition to the Reactor Oversight Process and the new Enforcement Policy, the

Commission adopted the following language into both the Enforcement Policy and NRC Inspection

Manual Part 9900: Technical guidance. "While safety is the fundamental regulatory objective,

compliance with NRC requirements plays an important role in giving the NRC confidence that safety is

being maintained. NRC requirements have been designed to ensure adequate protection-which

corresponds to "no undue risk to public health and safety"-through acceptable design, construction,

maintenance, modification, and quality assurance measures. In the context of risk-informed regulation,

compliance plays a very important role in ensuring that key assumptions used in underlying risk and

engineering analyses remain valid." This language is often referred to as the nexus between safety and

compliance.

While the current Enforcement Policy with its expanded use of NCVs and risk information has

significantly reduced unnecessary regulatory burden, the proper disposition of documented violations

remain an NRC responsibility. We have reduced unnecessary regulatory burden by changing the way we

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Appendix I

and our licensees disposition violations, not by failing to determine whether an inspection finding is a

violation. Failing to disposition valid violations that have more than minor safety significance does not

further any of the agency's goals. It can only serve to create the impression that there are unimportant

requirements. In short, if an issue warrants documentation in an inspection report it also warrants a

determination as to whether or not a violation exists.

I would like to emphasize the following points:

1) All issues documented in inspection reports that constitute violations must be dispositioned in

accordance with the Enforcement Policy (NCV, NOV, or exercise of discretion, where appropriate).

2) The fact that an NCV does not require a response does not relieve the NRC of the responsibility to

appropriately disposition the noncompliance nor does it relieve the licensee of the responsibility to

restore compliance and take corrective actions to preclude recurrence.

3) The NRC's responsibility to ensure the legitimacy of violations dispositioned as NCVs is not reduced

as a result of an issue being dispositioned without a formal citation. In documenting NCVs the staff must

clearly describe how violations of legally binding requirements exist.

4) The Reactor Oversight Process and Significance Determination Process appropriately focus inspection

staff attention first on the significance of issues. Compliance, however, must not be considered only an

afterthought in the assessment process. The agency cannot dismiss enforcement when an issue is

determined to be of low significance. The reasons for this are numerous but include: a) having

noncompliances placed in licensee corrective action programs to ensure compliance is restored and

corrective actions to preclude recurrence are taken in a time frame commensurate with safety;

b) maintaining and instilling public confidence that our regulations are enforced, and; c) to enable us to

make better informed regulatory decisions in the future.

5) We will not manage to violation quotas or goals. The number of Severity Level IV violations in the

reactor program has markedly decreased since the spring of 1998 and there are many factors which

influenced this change. These factors include more explicit guidance on minor violations as well as

fundamental changes in the inspection program. However, the need to properly disposition documented

issues (and violations) has not changed. The Offices of NRR, NMSS and OE will continue to work

together to define what issues are to be documented in inspection reports in a manner commensurate with

the evolving inspection, oversight and enforcement programs.

6) An integral part of NRC Manual Chapter 0610*, Appendix E, "Thresholds for Documentation," is

answering the question of whether a finding is a violation. For issues of very low safety significance, it

is not expected that an extensive inspection be conducted to determine if a legally defensible violation

exists; however, it is reasonable to expect that necessary support documentation would be gathered in

order to attempt to make the determination and to construct and document a violation, if one exists. For

more risk significant issues, it is expected that inspection effort will be expended to obtain the

information necessary to construct legally defensible violations, if they exist.

Fundamentally, the changes that have occurred since the summer of 1998 are based on the premise that

enforcement should not drive assessment and inspection. Rather, enforcement should be an integral

element of the risk informed inspection and assessment programs. The transition in no way diminishes

the importance of compliance.

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Appendix I

I or my staff are available to further discuss this issue in any appropriate forum including counterpart

meetings and formal training. We also welcome any feedback on the principles communicated herein.

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