[Federal Register Volume 62, Number 195 (Wednesday, October 8, 1997)]
[Rules and Regulations]
[Pages 52479-52486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-26277]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 62, No. 195 / Wednesday, October 8, 1997 / 
Rules and Regulations

[[Page 52479]]


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DEPARTMENT OF ENERGY

10 CFR Part 820


Procedural Rules for DOE Nuclear Activities; General Statement of 
Enforcement Policy

AGENCY: Department of Energy.

ACTION: Interim rule; amendment of enforcement policy statement.

-----------------------------------------------------------------------

SUMMARY: The Department of Energy (DOE) is amending its General 
Statement of Enforcement Policy (Policy), which is contained in an 
Appendix to the Procedural Rules for DOE Nuclear Activities. DOE has 
reevaluated this Policy in consideration of the changing mission of DOE 
and experience gained from applying the Policy since its publication. 
Under the amended Policy, DOE no longer intends to base civil penalty 
amounts on the type of nuclear facility involved. The amended Policy 
also adds new sections on (1) DOE's use of enforcement letters to close 
out investigations, (2) self-identification and tracking systems, and 
(3) self-disclosing events.

DATES: This amended Policy takes effect on November 7, 1997. Although 
the amended Policy will be effective November 7, 1997, DOE invites and 
will consider public comment. Written comments must be received by 
November 7, 1997.

ADDRESSES: Written comment (5 copies) should be addressed to: R. Keith 
Christopher, U.S. Department of Energy, Office of Enforcement and 
Investigation, EH-10-GTN, 1000 Independence Avenue SW., Washington, DC 
20585, (301) 903-0106. Written comments may be examined between 9 a.m. 
and 4 p.m., Monday through Friday, in: U.S. Department of Energy, 
Reading Room, room 1E-190, 1000 Independence Avenue SW., Washington, DC 
20585, (202) 586-6020.

FOR FURTHER INFORMATION CONTACT: Howard Wilchins, U.S. Department of 
Energy, Office of Enforcement and Investigation, EH-10-GTN, 1000 
Independence Avenue SW., Washington, DC 20585, (202) 903-0100.

SUPPLEMENTARY INFORMATION:

I. Background
II. Amendments to Policy
    A. Base Civil Penalty Structure
    B. Enforcement Letters
    C. Self-Identification and Tracking Systems
    D. Self-Disclosing Events
    E. Summary of Changes
III. Procedural Requirements
    A. Review Under Executive Order 12866
    B. Review Under the Paperwork Reduction Act
    C. Review Under the National Environmental Policy Act
    D. Review Under Executive Order 12612
    E. Review Under Executive Order 12988
    F. Congressional Notification

I. Background

    DOE's Nuclear Safety Requirements \1\ set forth the requirements 
for DOE's contractors, subcontractors and suppliers to ensure that 
DOE's nuclear facilities and activities are operated in a manner that 
protects worker and public safety and the environment. In promulgating 
Procedural Rules for DOE Nuclear Activities, DOE published a General 
Statement of Enforcement Policy (Policy) as Appendix A to 10 CFR Part 
820, 58 FR 43680 (Aug. 17, 1993). The Policy provides the bases and 
processes DOE uses to take enforcement actions for violations of the 
DOE Nuclear Safety Requirements. The enforcement provisions embodied in 
Part 820 and reflected in the Policy are based on a philosophy of 
encouraging contractors to provide adequate protection of safety, 
health, and the environment in compliance with the DOE Nuclear Safety 
Requirements. The Policy provides for discretion in pursuing 
enforcement actions where contractors demonstrate initiative in safety 
management performance, self-identification of deficiencies, self-
reporting of noncompliances to DOE, and prompt and comprehensive 
corrective actions for the deficiencies identified. Where a 
contractor's actions are not adequate, DOE may issue a Preliminary 
Notice of Violation and propose the assessment of civil penalties under 
the authority of the Price-Anderson Amendments Act of 1988 (PAAA).
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    \1\ 10 CFR Sec. 820.2 defines ``DOE Nuclear Safety 
Requirements'' as ``the set of enforceable rules, regulations, or 
orders relating to nuclear safety adopted by DOE (or by another 
Agency if DOE specifically identifies the rule, regulation, or 
order) to govern the conduct of persons in connection with any DOE 
nuclear activity and includes any programs, plans, or other 
provisions intended to implement these rules, regulations, orders, a 
Nuclear Statute or the [Atomic Energy] Act, including technical 
specifications and operational safety requirements for DOE nuclear 
facilities. For purposes of the assessment of civil penalties, the 
definition of DOE Nuclear Safety Requirements is limited to those 
identified in 10 CFR Sec. 820.20(b).'' Section 820.20(b) states that 
civil penalties may be assessed on the basis of a violation of any 
DOE Nuclear Safety Requirements, a Compliance Order, or any program, 
plan, or other provision required to implement such Requirement or 
Compliance Order.
---------------------------------------------------------------------------

    Since the Policy was published in August 1993, DOE has accumulated 
experience in applying the Policy. The complexion of DOE's operating 
facilities and activities has changed over the past several years. In 
particular, its array of weapons production facilities and activities 
has been significantly reduced so that DOE now manages a broad mix of 
operating facilities, research and development activities, 
decontamination and decommissioning operations, and environmental 
management and restoration activities. DOE has reevaluated the 
structure of its Policy considering the changing mission of DOE and its 
experience with the Policy. This reevaluation found that the Policy 
emphasized hazards based on the type of nuclear facilities and 
activities, such as the risk to the public of an accident involving a 
reactor or a release of large quantities of radiological material. The 
Policy placed inadequate emphasis on violations that caused or 
potentially caused a significant hazard to a worker or the environment, 
regardless of the type of facility or activity involved, in determining 
the applicable base civil penalty. That result sent a message to 
contractors inconsistent with DOE's intent to focus attention on 
assuring the safe conduct of work at its facilities and during nuclear 
activities conducted for DOE.
    DOE in recent years has placed greater responsibility on management 
and operating and other contractors to assure the safety of the public, 
workers, and the environment for the activities that they perform. This 
has included use of incentive or award fees to recognize proper 
performance by contractors, integration of safety management

[[Page 52480]]

systems, and application of enforcement sanctions for significant cases 
where DOE Nuclear Safety Requirements have not been met. DOE's 
amendment to the Policy is consistent with the philosophy of 
emphasizing the importance of protecting workers, the public and the 
environment. The amendment also clarifies DOE's enforcement processes 
and policies so that DOE's expectations and protocols are better 
understood. Comments received will be considered and additional 
amendments made if necessary. This amended Policy will take effect 30 
days from the date of publication.

II. Amendments to Policy

A. Base Civil Penalty Structure

    The PAAA, as modified by the Federal Civil Penalties Inflation 
Adjustment Act of 1990, establishes a statutory limit of $110,000 \2\ 
on the amount of civil penalties DOE can assess for each violation. DOE 
is eliminating the civil penalty structure that is based on the 
categorization of the type of nuclear facility, but it is retaining and 
modifying that portion of the structure based on the three Severity 
Levels of violations. DOE is simplifying the determination of civil 
penalties by moving from two tables to one table. DOE is removing Table 
1A in newly-designated Section IX which is based on categorization of 
five types of nuclear facilities.
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    \2\ The Federal Civil Penalties Inflation Adjustment Act of 
1990, 28 U.S.C. 2461 note, as amended by the Debt Collection 
Improvement Act of 1996 (Pub. L. 104-134), requires Federal agencies 
to regularly adjust each civil monetary penalty provided by law 
within the jurisdiction of the agency. As amended, the law requires 
each agency to make an initial inflationary adjustment for all 
applicable civil penalties, and to make further adjustments at least 
once every four years. DOE has promulaged a new Subpart G in 10 CFR 
Part 820, 62 FR 4618 (Sept. 2, 1997) (final rule), to establish by 
regulation that $110,000 is the new maximum civil penalty per 
violation per day authorized by 42 U.S.C. 2282a and 28 U.S.C. 2461 
note.''
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    Eliminating the sliding scale of civil penalties based on the 
categorization of type of nuclear facility will better reflect DOE's 
current mission and practices. The categorization of facility approach, 
although similar to that in NRC's enforcement policy,\3\ is not 
appropriate for DOE's current programs where both large, complex 
facilities and activities, and smaller, but not necessarily less 
hazardous, facilities and activities are often operated and managed by 
the same contractors. A violation affecting the environment or the 
health and safety of a worker or the public can occur both at high 
hazard facilities and activities, and at relatively low hazard 
facilities and activities at the same site. Accordingly, DOE is 
removing the facility categories table from the Policy as a means of 
establishing the base civil penalty.
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    \3\ Nuclear Regulatory Commission, General Statement of Policy 
and Procedure for Enforcement Actions, 61 FR 65561 (Oct. 18, 1996) 
(revision of policy).
---------------------------------------------------------------------------

    DOE is redesignating Table 1B as Table 1 and revising it to set 
civil penalty percentages for violations of Severity Levels I, II, and 
III as a percentage of the maximum statutory limit for civil penalties 
per violation per day. Severity Level I violations are assessed at the 
highest level of civil penalty of 100% of the statutory limit per 
violation per day. Severity Level II is set at 50% of the statutory 
limit. Severity Level III is set at 10% of the statutory limit.
    For Severity Level III violations, DOE is reducing the percentage 
of the statutory limit from 20% to 10%. DOE believes that a 10% penalty 
for Category Level III will more accurately reflect its intent to lower 
civil penalties for noncompliances of small or indirect safety 
consequences and to encourage contractor responsibility for correcting 
noncompliances. Except in unusual circumstances, DOE would not assess a 
civil penalty for violations of Severity Level III. There is no change 
to the percentages for Severity Levels I and II.
    In the revised table, the dollar amount of the civil penalty to 
which the percentages apply has been deleted so that the percentages 
now apply to the statutory limit of the maximum civil penalty that can 
be assessed, whatever that may be at the time. DOE is required to 
adjust the statutory limit for inflation at least every four years. See 
footnote 2. This approach is intended to establish a direct 
relationship between the magnitude of the base civil penalty and the 
significance of the violation.

B. Enforcement Letters

    In its experience with enforcement over the past several years, DOE 
has developed the Enforcement Letter to close out investigations. An 
Enforcement Letter is an administrative action which has been 
incorporated into the enforcement process to streamline the process and 
to better communicate to contractors the status of DOE closure of 
enforcement investigations and DOE expectations for corrective action 
of a noncompliance.
    Enforcement letters serve to communicate to the contractor DOE's 
decision not to issue a Preliminary Notice of Violation for a 
noncompliance that has been reported to DOE, DOE's basis for not 
pursuing enforcement in that case, and notice to the contractor of 
DOE's expectations for implementation of the contractor's commitments 
to take actions to correct the noncompliance. While the Enforcement 
Letter is not addressed in the current Policy and would not be used in 
all cases where DOE decides not to pursue a Preliminary Notice of 
Violation, it has served an effective role in several investigations 
that DOE has undertaken involving more complex matters or those of some 
safety significance. The amended Policy adds Section VIII to describe 
DOE's use of Enforcement Letters.

C. Self-Identification and Tracking Systems

    The amended Policy adds a new paragraph 5 in newly-designated 
Section IX on self-identification and tracking systems. This paragraph 
emphasizes that contractors should be proactive in identifying and 
reporting noncompliances before they result in an event with potential 
safety consequences and should take prompt and effective corrective 
actions to correct noncompliances to preclude recurrence. Contractors 
have tended to rely on self-reporting to expect significant reduction 
or full remission of civil penalties for simply reporting 
noncompliances that occur. The amended Policy encourages contractors to 
use the full spectrum of appropriate safety management responses such 
as prompt self-identification, reporting, and timely and effective 
corrective action to improve nuclear safety.
    The present Policy notes that DOE would consider partial reduction 
of a civil penalty if a contractor self-identifies the noncompliance 
and reports it to DOE. With the impracticality of formally reporting 
all noncompliances with DOE Nuclear Safety Requirements, including, for 
example, minor or trivial noncompliances with procedures, DOE will 
allow contractors an option of self-tracking those noncompliances that 
fall below certain threshold levels. In DOE's enforcement guide, 
Guidance for Identifying, Reporting and Tracking Nuclear Safety 
Noncompliances,\4\ DOE recommends threshold levels. For noncompliances 
below the threshold, DOE will accept a contractor's self-tracking as 
acceptable self-reporting if DOE has access to the contractor's self-
tracking system and the contractor has tagged the items as 
noncompliances

[[Page 52481]]

with DOE Nuclear Safety Requirements. For reporting items of 
noncompliance of potentially greater safety significance above the 
thresholds, contractors may elect to report through the voluntary DOE 
Noncompliance Tracking System (NTS), which is also described in the 
guide.
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    \4\ Guidance for Identifying, Reporting and Tracking Nuclear 
Safety Noncompliances, and Addendum, Noncompliance Tracking System 
Users Manual, DOE-HDBK-1089-95, July 1995. This guide is available 
through the DOE Technical Standards Program on the internet at 
http://apollo.osti.gov/html/techstds/techstds.html.
---------------------------------------------------------------------------

D. Self-Disclosing Events

    A new paragraph 6 is added in newly-designated Section IX on self-
disclosing events. Reduction of civil penalties may not be appropriate 
when a violation is disclosed by an event or discovered through the 
subsequent investigation of the root cause of an event (i.e., a self-
disclosing event) because the disclosure is not the result of 
contractor initiative. The new paragraph clarifies how DOE would 
consider reducing penalties for self-disclosing events. In general, a 
self-disclosing event does not constitute self-identification of the 
noncomplying event, even if the contractor reported it promptly after 
the event. A determination to reduce civil penalties for identification 
of an event after the fact will depend on various factors, including 
the duration of the noncompliance, and ease and opportunities for 
identification.

E. Summary of Changes

    The Department is making formatting changes throughout Appendix A 
to conform to Federal Register codification requirements. As a result, 
paragraph designations such as a., b., c., etc. have been added to 
sections currently containing multiple undesignated paragraphs. The 
Department is also making substantive changes by adding new Section 
VIII, Enforcement Letter, and redesignating the remaining sections 
accordingly. Newly-redesignated Section IX has been reprinted in its 
entirety to: add paragraph designations throughout; add paragraph 5, 
Self-Identification and Tracking Systems, and paragraph 6, Self-
Disclosing Events; remove Table 1A and revise and redesignate Table 1B 
as Table 1 in paragraph 2 Civil Penalty; correct cross-references to 
the Tables throughout the section; change references to Section VIII to 
read ``this section'' to reflect the redesignation; remove the phrase 
``and a categorization of DOE facilities operated'', and revise 
``facilities'' to read ``Severity Levels'' in paragraph 2c.; remove the 
phrase ``and different categories of facilities,'' revise the phrase 
``$100,000 per day'' to read ``the statutory limit'' in paragraph 2e. 
In paragraph 8, the reference to 10 CFR 820.60 is corrected to read 
``820.50.'' In newly-designated Section XII, the phrase ``$100,000'' 
has been changed to read ``the statutory limit'' in paragraph a.

III. Procedural Requirements

A. Review Under Executive Order 12866

    This amended Policy is not a ``significant regulatory action'' as 
defined in section 3(f) of Executive Order 12866, ``Regulatory Planning 
and Review,'' 58 FR 51735 (Oct. 4, 1993), and, thus, has not been 
reviewed by the Office of Information and Regulatory Affairs of the 
Office of Management and Budget for this purpose.

B. Review Under the Paperwork Reduction Act

    No new information collection requirements subject to the Paperwork 
Reduction Act, 44 U.S.C. 3501 et seq., are imposed by this amended 
Policy.

C. Review Under the National Environmental Policy Act

    The Department has determined that this amended Policy is not a 
major federal action significantly affecting the quality of the human 
environment within the meaning of the National Environmental Policy Act 
(NEPA), 42 U.S.C. 4321 et seq., and does not require preparation of an 
environmental impact statement or an environmental assessment. Today's 
action is covered under Categorical Exclusion A.5 in DOE guidelines 
implementing NEPA (Appendix A to Subpart D, 10 CFR part 1021), which 
applies to the interpretation or amendment of an existing rule or 
regulation that does not change the environmental effect of the rule or 
regulation being amended.

D. Review Under Executive Order 12612

    Executive Order 12612, ``Federalism,'' 52 FR 41685 (Oct. 30, 1987), 
requires that regulations, rules, legislation, and any other policy 
actions be reviewed for any substantial direct effects on States, on 
the relationship between the National Government and the States, or in 
the distribution of power and responsibilities among various levels of 
government. If there are sufficient substantial direct effects on 
States, on the relationship between the National Government and the 
States, or in the distribution of power and responsibilities among 
various levels of government, the Executive Order requires preparation 
of a federalism assessment to be used in all decisions involved in 
promulgating and implementing a policy action. This action will not 
have a substantial direct effect on the institutional interest or 
traditional functions of the States or various levels of government.

E. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' 61 FR 4729 (Feb. 7, 1996), imposes on 
Executive agencies the general duty to adhere to the following 
requirements: (1) eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct rather than a general standard and 
promote simplification and burden reduction. Section (3) of Executive 
Order 12988 requires Executive agencies to review regulations to 
determine whether the applicable standards in section 3 are met. DOE 
has completed the required review and determined that, to the extent 
permitted by law, this amended Policy meets the relevant standards of 
Executive Order 12988.

F. Congressional Notification

    Consistent with the Small Business Regulatory Enforcement Fairness 
Act of 1996, DOE will submit to Congress a report regarding the 
issuance of this amended Policy prior to the effective date set forth 
at the beginning of this notice. The report will note that the Office 
of Management and Budget has determined that this amended Policy does 
not constitute a ``major rule'' under that Act. 5 U.S.C. 801, 804.

List of Subjects in 10 CFR Part 820

    Government contracts, DOE contracts, Nuclear safety, Civil penalty, 
Criminal penalty.

    Issued in Washington, D.C., on September 19, 1997.
Tara O'Toole,
Assistant Secretary for Environment, Safety and Health.

    For the reason set forth in the preamble, 10 CFR part 820 is 
amended as set forth below:

PART 820--PROCEDURAL RULES FOR DOE NUCLEAR ACTIVITIES

    1. The authority citation for Part 820 continues to read as 
follows:

    Authority: 42 U.S.C. 2201, 2282(a), 7191.

Appendix A to Part 820--[Amended]

    2. Appendix A to Part 820--General Statement of Enforcement Policy 
is amended by adding paragraph designations in the following sections:
    In Section I., Introduction, add the paragraph designations a. b. 
c. d. and e. to the five paragraphs.

[[Page 52482]]

    In Section V., Procedural Framework, add the paragraph designations 
a. b. and c. to the three paragraphs.
    In Section VI., Severity of Violations, add the paragraph 
designations a. b. c. d. e. and f. to the six paragraphs.
    In Section VII, Enforcement Conferences, add the paragraph 
designations a. and b. to the two paragraphs.
    3. Appendix A to Part 820 is amended by redesignating Sections VIII 
through XI as Sections IX through XII and adding a new Section VIII to 
read as follows:

Appendix A to Part 820--General Statement of Enforcement Policy

* * * * *

VIII. Enforcement Letter

    a. In cases where DOE has decided not to issue a Preliminary Notice 
of Violation, DOE may send an Enforcement Letter to the contractor 
signed by the Director. The Enforcement Letter is intended to 
communicate the basis of the decision not to pursue further enforcement 
action for a noncompliance. The Enforcement Letter is intended to 
direct contractors to the desired level of nuclear safety performance. 
It may be used when DOE concludes the specific noncompliance at issue 
is not of the level of significance warranted for issuance of a 
Preliminary Notice of Violation (PNOV). Even where a noncompliance may 
be significant, the Enforcement Letter recognizes that the contractor's 
actions may have attenuated the need for further enforcement action. 
The Letter will typically recognize how the contractor handled the 
circumstances surrounding the noncompliance and address additional 
areas requiring the contractor's attention and DOE's expectations for 
corrective action. The Enforcement Letter notifies the contractor that, 
when verification is received that corrective actions have been 
implemented, DOE will close the enforcement action.
    b. In many investigations, an Enforcement Letter may not be 
required. When DOE decides that a contractor has appropriately 
corrected a noncompliance or that the significance of the noncompliance 
is sufficiently low, it may close out an investigation simply through 
an annotation in the DOE Noncompliance Tracking System (NTS). See 
Guidance for Identifying, Reporting and Tracking Nuclear Safety 
Noncompliances, and Addendum, Noncompliance Tracking System Users 
Manual, DOE-HDBK-1089-95, July 1995. A closeout of a noncompliance with 
or without an Enforcement Letter may only take place after DOE has 
confirmed that corrective actions have been completed.
    4. Newly-designated Section IX, Enforcement Action, is revised to 
read as follows:

IX. Enforcement Actions

    a. This section describes the enforcement sanctions available to 
DOE and specifies the conditions under which each may be used. The 
basic sanctions are Notices of Violation and civil penalties. In 
determining whether to impose enforcement sanctions, DOE will consider 
enforcement actions taken by other Federal or State regulatory bodies 
having concurrent jurisdiction, e.g., instances which involve NRC 
licensed entities which are also DOE contractors, and in which the NRC 
exercises its own enforcement authority.
    b. The nature and extent of the enforcement action is intended to 
reflect the seriousness of the violation involved. For the vast 
majority of violations for which DOE assigns severity levels as 
described previously, a Notice of Violation will be issued, requiring a 
formal response from the recipient describing the nature of and 
schedule for corrective actions it intends to take regarding the 
violation. Administrative actions, such as determination of award fees 
where DOE contracts provide for such determinations, will be considered 
separately from any civil penalties that may be imposed under this 
Enforcement Policy. Likewise, imposition of a civil penalty will be 
based on the circumstances of each case, unaffected by any award fee 
determination.
1. Notice of Violation
    a. A Notice of Violation (either a Preliminary or Final Notice) is 
a document setting forth the conclusion of the DOE Office of Nuclear 
Safety that one or more violations of DOE Nuclear Safety Requirements 
has occurred. Such a notice normally requires the recipient to provide 
a written response which may take one of several positions described in 
Section V of this policy statement. In the event that the recipient 
concedes the occurrence of the violation, it is required to describe 
corrective steps which have been taken and the results achieved; 
remedial actions which will be taken to prevent recurrence; and the 
date by which full compliance will be achieved.
    b. DOE will use the Notice of Violation as the standard method for 
formalizing the existence of a violation and, in appropriate cases as 
described in this section, the notice of violation will be issued in 
conjunction with the proposed imposition of a civil penalty. In certain 
limited instances, as described in this section, DOE may refrain from 
the issuance of an otherwise appropriate Notice of Violation. However, 
a Notice of Violation will virtually always be issued for willful 
violations, if past corrective actions for similar violations have not 
been sufficient to prevent recurrence and there are no other mitigating 
circumstances, or if the circumstances otherwise warrant increasing 
Severity Level III violations to a higher severity level.
    c. DOE contractors are not ordinarily cited for violations 
resulting from matters not within their control, such as equipment 
failures that were not avoidable by reasonable quality assurance 
measures, proper maintenance, or management controls. With regard to 
the issue of funding, however, DOE does not consider an asserted lack 
of funding to be a justification for noncompliance with DOE Nuclear 
Safety Requirements.
Should a contractor believe that a shortage of funding precludes it 
from achieving compliance with one or more DOE Nuclear Safety 
Requirements, it must pursue one of two alternative courses of action. 
First, it may request, in writing, an exemption from the requirement(s) 
in question from the appropriate Secretarial Officer (SO), explicitly 
addressing the criteria for exemptions set forth in 10 CFR 820.62. A 
justification for continued operation for the period during which the 
exemption request is being considered should also be submitted. In such 
a case, the SO must grant or deny the request in writing, explaining 
the rationale for the decision. Second, if the criteria for approval of 
an exemption cannot be demonstrated, the contractor, in conjunction 
with the SO, must take appropriate steps to modify, curtail, suspend or 
cease the activities which cannot be conducted in compliance with the 
DOE Nuclear Safety Requirement(s) in question.
    d. DOE expects the contractors which operate its facilities to have 
the proper management and supervisory systems in place to assure that 
all activities at DOE facilities, regardless of who performs them, are 
carried out in compliance with all DOE Nuclear Safety Requirements. 
Therefore, contractors are normally held responsible for the acts of 
their employees and subcontractor employees in the conduct of 
activities at DOE facilities. Accordingly, this policy should not be 
construed to excuse personnel errors.
    e. Finally, certain contractors are explicitly exempted from the 
imposition

[[Page 52483]]

of civil penalties pursuant to the provisions of the PAAA, 42 U.S.C. 
2282a(d), for activities conducted at specified facilities. See 10 CFR 
820.20(c). In addition, in fairness to non-profit educational 
institutions, the Department has determined that they should be 
likewise exempted. See 10 CFR 820.20(d). However, compliance with DOE 
Nuclear Safety Requirements is no less important for these facilities 
than for other facilities in the DOE complex which work with, store or 
dispose of radioactive materials. Indeed, the exempted contractors 
conduct some of the most important nuclear-related research and 
development activities performed for the Department. Therefore, in 
order to serve the purposes of this enforcement policy and to emphasize 
the importance the Department places on compliance with all of its 
nuclear safety requirements, DOE intends to issue Notices of Violation 
to the exempted contractors and non-profit educational institutions 
when appropriate under this policy statement, notwithstanding the 
statutory and regulatory exemptions from the imposition of civil 
penalties.
2. Civil Penalty
    a. A civil penalty is a monetary penalty that may be imposed for 
violations of applicable DOE Nuclear Safety Requirements, including 
Compliance Orders. See 10 CFR 820.20(b). Civil penalties are designed 
to emphasize the need for lasting remedial action, deter future 
violations, and underscore the importance of DOE contractor self-
identification, reporting and correction of violations of DOE Nuclear 
Safety Requirements.
    b. Absent mitigating circumstances as described below, or 
circumstances otherwise warranting the exercise of enforcement 
discretion by DOE as described in this section, civil penalties will be 
proposed for Severity Level I and II violations. Civil penalties will 
be proposed for Severity Level III violations which are similar to 
previous violations for which the contractor did not take effective 
corrective action. ``Similar'' violations are those which could 
reasonably have been expected to have been prevented by corrective 
action for the previous violation. DOE normally considers civil 
penalties only for similar Severity Level III violations that occur 
over a reasonable period of time to be determined at the discretion of 
DOE.
    c. DOE will impose different base level civil penalties considering 
the severity level of the violation(s) by Price-Anderson indemnified 
contractors. Table 1 shows the daily base civil penalties for the 
various categories of severity levels. However, as described above in 
Section IV, the imposition of civil penalties will also take into 
account the gravity, circumstances, and extent of the violation or 
violations and, with respect to the violator, any history of prior 
similar violations and the degree of culpability and knowledge.
    d. Regarding the factor of ability of DOE contractors to pay the 
civil penalties, it is not DOE's intention that the economic impact of 
a civil penalty be such that it puts a DOE contractor out of business. 
Contract termination, rather than civil penalties, is used when the 
intent is to terminate these activities. The deterrent effect of civil 
penalties is best served when the amount of such penalties takes this 
factor into account. However, DOE will evaluate the relationship of 
affiliated entities to the contractor (such as parent corporations) 
when it asserts that it cannot pay the proposed penalty.
    e. DOE will review each case involving a proposed civil penalty on 
its own merits and adjust the base civil penalty values upward or 
downward appropriately. As indicated above, Table 1 identifies the 
daily base civil penalty values for different severity levels. After 
considering all relevant circumstances, civil penalties may be 
escalated or mitigated based upon the adjustment factors described 
below in this section. In no instance will a civil penalty for any one 
violation exceed the statutory limit. However, it should be emphasized 
that if the DOE contractor is or should have been aware of a violation 
and has not reported it to DOE and taken corrective action despite an 
opportunity to do so, each day the condition existed may be considered 
as a separate violation and, as such, subject to a separate civil 
penalty. Further, as described in this section, the duration of a 
violation will be taken into account in determining the appropriate 
severity level of the base civil penalty.

              Table 1.--Severity Level Base Civil Penalties             
------------------------------------------------------------------------
                                                              Base civil
                                                               penalty  
                                                                amount  
                                                             (percentage
                       Severity level                         of maximum
                                                                civil   
                                                             penalty per
                                                              violation 
                                                               per day) 
------------------------------------------------------------------------
I..........................................................         100 
II.........................................................          50 
III........................................................          10 
------------------------------------------------------------------------

3. Adjustment Factors
    a. DOE's enforcement program is not an end in itself, but a means 
to achieve compliance with DOE Nuclear Safety Requirements, and civil 
penalties are not collected to swell the coffers of the United States 
Treasury, but to emphasize the importance of compliance and to deter 
future violations. The single most important goal of the DOE 
enforcement program is to encourage early identification and reporting 
of nuclear safety deficiencies and violations of DOE Nuclear Safety 
Requirements by the DOE contractors themselves rather than by DOE, and 
the prompt correction of any deficiencies and violations so identified. 
DOE believes that DOE contractors are in the best position to identify 
and promptly correct noncompliance with DOE Nuclear Safety 
Requirements. DOE expects that these contractors should have in place 
internal compliance programs which will ensure the detection, reporting 
and prompt correction of nuclear safety-related problems that may 
constitute, or lead to, violations of DOE Nuclear Safety Requirements 
before, rather than after, DOE has identified such violations. Thus, 
DOE contractors will almost always be aware of nuclear safety problems 
before they are discovered by DOE. Obviously, public and worker health 
and safety is enhanced if deficiencies are discovered (and promptly 
corrected) by the DOE contractor, rather than by DOE, which may not 
otherwise become aware of a deficiency until later on, during the 
course of an inspection, performance assessment, or following an 
incident at the facility. Early identification of nuclear safety-
related problems by DOE contractors has the added benefit of allowing 
information which could prevent such problems at other facilities in 
the DOE complex to be shared with all appropriate DOE contractors.
    b. Pursuant to this enforcement philosophy, DOE will provide 
substantial incentive for the early self-identification, reporting and 
prompt correction of problems which constitute, or could lead to, 
violations of DOE Nuclear Safety Requirements. Thus, application of the 
adjustment factors set forth below may result in no civil penalty being 
assessed for violations that are identified, reported, and promptly and 
effectively corrected by the DOE contractor.
    c. On the other hand, ineffective programs for problem 
identification and correction are unacceptable. Thus, for example, 
where a contractor fails to disclose and promptly correct violations

[[Page 52484]]

of which it was aware or should have been aware, substantial civil 
penalties are warranted and may be sought, including the assessment of 
civil penalties for continuing violations on a per day basis.
    d. Further, in cases involving willfulness, flagrant DOE-identified 
violations, repeated poor performance in an area of concern, or serious 
breakdown in management controls, DOE intends to apply its full 
statutory enforcement authority where such action is warranted.
4. Identification and Reporting
    Reduction of up to 50% of the base civil penalty shown in Table 1 
may be given when a DOE contractor identifies the violation and 
promptly reports the violation to the DOE. In weighing this factor, 
consideration will be given to, among other things, the opportunity 
available to discover the violation, the ease of discovery and the 
promptness and completeness of any required report. No consideration 
will be given to a reduction in penalty if the DOE contractor does not 
take prompt action to report the problem to DOE upon discovery, or if 
the immediate actions necessary to restore compliance with DOE Nuclear 
Safety Requirements or place the facility or operation in a safe 
configuration are not taken.
5. Self-Identification and Tracking Systems
    a. DOE strongly encourages contractors to self-identify 
noncompliances with DOE Nuclear Safety Requirements before the 
noncompliances lead to a string of similar and potentially more 
significant events or consequences. When a contractor identifies a 
noncompliance through its own self-monitoring activity, DOE will 
normally allow a reduction in the amount of civil penalties, regardless 
of whether prior opportunities existed for contractors to identify the 
noncompliance. DOE will normally not allow a reduction in civil 
penalties for self-identification if significant DOE intervention was 
required to induce the contractor to report a noncompliance.
    b. Self-identification of a noncompliance is possibly the single 
most important factor in considering a reduction in the civil penalty 
amount. Consideration of self-identification is linked to, among other 
things, whether prior opportunities existed to discover the violation, 
and if so, the age and number of such opportunities; the extent to 
which proper contractor controls should have identified or prevented 
the violation; whether discovery of the violation resulted from a 
contractor's self-monitoring activity; the extent of DOE involvement in 
discovering the violation or in prompting the contractor to identify 
the violation; and the promptness and completeness of any required 
report. Self-identification is also considered by DOE in deciding 
whether to pursue an investigation.
    c. DOE has established a voluntary Noncompliance Tracking System 
(NTS) which allows contractors to elect to report noncompliances. In 
the guidance document supporting the NTS (DOE-HDBK-1089-95), DOE has 
established reporting thresholds for reporting items of noncompliance 
of potentially greater safety significance into the NTS. Contractors 
may, however, use their own self-tracking systems to track 
noncompliances below the reporting threshold. This self-tracking is 
considered to be acceptable self-reporting as long as DOE has access to 
the contractor's system and the contractor's system notes the item as a 
noncompliance with a DOE Nuclear Safety Requirement. For noncompliances 
that are below the reportability thresholds, DOE will credit contractor 
self-tracking as representing self-reporting. If an item is not 
reported in NTS but only tracked in the contractor's system and DOE 
subsequently finds the facts and their safety significance have been 
significantly mischaracterized, DOE will not credit the internal 
tracking as representing appropriate self-reporting.
6. Self-Disclosing Events
    a. DOE expects contractors to demonstrate acceptance of 
responsibility for safety of the public, workers, and the environment 
and to proactively identify noncompliance conditions in their programs 
and processes. In deciding whether to reduce any civil penalty proposed 
for violations revealed by the occurrence of a self-disclosing event, 
DOE will consider the ease with which a contractor could have 
discovered the noncompliance and the prior opportunities that existed 
to discover the noncompliance. When the occurrence of an event 
discloses noncompliances that the contractor could have or should have 
identified before the event, DOE will not generally allow a reduction 
in civil penalties for self-identification, even if the underlying 
noncompliances were reported to DOE. If a contractor simply reacts to 
events that disclose potentially significant consequences or downplays 
noncompliances which did not result in significant consequences to 
workers, the public, and the environment, such contractor actions do 
not lead to the improvement in nuclear safety contemplated by the Act.
    b. The key test is whether the contractor reasonably could have 
detected any of the underlying noncompliances that contributed to the 
event. Examples of events that provide opportunities to identify 
noncompliances include, but are not limited to:
    (1) prior notifications of potential problems such as those from 
DOE operational experience publications or vendor equipment deficiency 
reports;
    (2) normal surveillance, quality assurance assessments, and post-
maintenance testing;
    (3) readily observable parameter trends; and
    (4) contractor employee or DOE observations of potential safety 
problems. Failure to utilize these types of events and activities to 
address noncompliances may result in higher civil penalty assessments 
or a DOE decision not to reduce civil penalty amounts.
    c. For example, a critique of the event might find that one of the 
root causes was a lack of clarity in a Radiation Work Permit (RWP) 
which led to improper use of anti-contamination clothing and resulting 
uptake of contamination by the individual. DOE could subsequently 
conclude that no reduction in civil penalties for self-identification 
should be allowed since the event itself disclosed the inadequate RWP 
and the contractor could have, through proper independent assessment or 
by fostering a questioning attitude by its workers and supervisors, 
identified the inadequate RWP before the event.
    d. Alternatively, if, following a self-disclosing event, DOE found 
that the contractor's processes and procedures were adequate and the 
contractor's personnel generally behaved in a manner consistent with 
the contractor's processes and procedures, DOE could conclude that the 
contractor could not have been reasonably expected to find the single 
procedural noncompliance that led to the event and thus, might allow a 
reduction in civil penalties.
7. Corrective Action To Prevent Recurrence
    The promptness (or lack thereof) and extent to which the DOE 
contractor takes corrective action, including actions to identify root 
cause and prevent recurrence, may result in up to a 50% increase or 
decrease in the base civil penalty shown in Table 1. For example, very 
extensive corrective action may result in reducing the proposed civil 
penalty as much as 50%

[[Page 52485]]

of the base value shown in Table 1. On the other hand, the civil 
penalty may be increased as much as 50% of the base value if initiation 
or corrective action is not prompt or if the corrective action is only 
minimally acceptable. In weighing this factor, consideration will be 
given to, among other things, the appropriateness, timeliness and 
degree of initiative associated with the corrective action. The 
comprehensiveness of the corrective action will also be considered, 
taking into account factors such as whether the action is focused 
narrowly to the specific violation or broadly to the general area of 
concern.
8. DOE's Contribution to a Violation
    There may be circumstances in which a violation of a DOE Nuclear 
Safety Requirement results, in part or entirely, from a direction given 
by DOE personnel to a DOE contractor to either take, or forbear from 
taking an action at a DOE facility. In such cases, DOE may refrain from 
issuing an NOV, and may mitigate, either partially or entirely, any 
proposed civil penalty, provided that the direction upon which the DOE 
contractor relied is documented in writing, contemporaneously with the 
direction. It should be emphasized, however, that pursuant to 10 CFR 
820.50, no interpretation of a DOE Nuclear Safety Requirement is 
binding upon DOE unless issued in writing by the General Counsel. 
Further, as discussed in this section of this policy statement, lack of 
funding by itself will not be considered as a mitigating factor in 
enforcement actions.
9. Exercise of Discretion
    Because DOE wants to encourage and support DOE contractor 
initiative for prompt self-identification, reporting and correction of 
problems, DOE may exercise discretion as follows:
    a. In accordance with the previous discussion, DOE may refrain from 
issuing a civil penalty for a violation which meets all of the 
following criteria:
    (1) The violation is promptly identified and reported to DOE before 
DOE learns of it.
    (2) The violation is not willful or a violation that could 
reasonably be expected to have been prevented by the DOE contractor's 
corrective action for a previous violation.
    (3) The DOE contractor, upon discovery of the violation, has taken 
or begun to take prompt and appropriate action to correct the 
violation.
    (4) The DOE contractor has taken, or has agreed to take, remedial 
action satisfactory to DOE to preclude recurrence of the violation and 
the underlying conditions which caused it.
    b. DOE may refrain from proposing a civil penalty for a violation 
involving a past problem, such as in engineering design or 
installation, that meets all of the following criteria:
    (1) It was identified by a DOE contractor as a result of a formal 
effort such as a Safety System Functional Inspection, Design 
Reconstitution program, or other program that has a defined scope and 
timetable which is being aggressively implemented and reported;
    (2) Comprehensive corrective action has been taken or is well 
underway within a reasonable time following identification; and
    (3) It was not likely to be identified by routine contractor 
efforts such as normal surveillance or quality assurance activities.
    c. DOE will not issue a Notice of Violation for cases in which the 
violation discovered by the DOE contractor cannot reasonably be linked 
to the conduct of that contractor in the design, construction or 
operation of the DOE facility involved, provided that prompt and 
appropriate action is taken by the DOE contractor upon identification 
of the past violation to report to DOE and remedy the problem.
    d. DOE may refrain from issuing a Notice of Violation for an item 
of noncompliance that meets all of the following criteria:
    (1) It was promptly identified by the DOE nuclear entity;
    (2) It is normally classified at a Severity Level III;
    (3) It was promptly reported to DOE;
    (4) Prompt and appropriate corrective action will be taken, 
including measures to prevent recurrence; and
    (5) It was not a willful violation or a violation that could 
reasonably be expected to have been prevented by the DOE contractor's 
corrective action for a previous violation.
    e. DOE may refrain from issuing a Notice of Violation for an item 
of noncompliance that meets all of the following criteria:
    (1) It was an isolated Severity Level III violation identified 
during a Tiger Team inspection conducted by the Office of Environment, 
Safety and Health, during an inspection or integrated performance 
assessment conducted by the Office of Nuclear Safety, or during some 
other DOE assessment activity.
    (2) The identified noncompliance was properly reported by the 
contractor upon discovery.
    (3) The contractor initiated or completed appropriate assessment 
and corrective actions within a reasonable period, usually before the 
termination of the onsite inspection or integrated performance 
assessment.
    (4) The violation is not willful or one which could reasonably be 
expected to have been prevented by the DOE contractor's corrective 
action for a previous violation.
    f. In situations where corrective actions have been completed 
before termination of an inspection or assessment, a formal response 
from the contractor is not required and the inspection or integrated 
performance assessment report serves to document the violation and the 
corrective action. However, in all instances, the contractor is 
required to report the noncompliance through established reporting 
mechanisms so the noncompliance issue and any corrective actions can be 
properly tracked and monitored.
    g. If DOE initiates an enforcement action for a violation at a 
Severity Level II or III and, as part of the corrective action for that 
violation, the DOE contractor identifies other examples of the 
violation with the same root cause, DOE may refrain from initiating an 
additional enforcement action. In determining whether to exercise this 
discretion, DOE will consider whether the DOE contractor acted 
reasonably and in a timely manner appropriate to the safety 
significance of the initial violation, the comprehensiveness of the 
corrective action, whether the matter was reported, and whether the 
additional violation(s) substantially change the safety significance or 
character of the concern arising out of the initial violation.
    h. It should be emphasized that the preceding paragraphs are solely 
intended to be examples indicating when enforcement discretion may be 
exercised to forego the issuance of a civil penalty or, in some cases, 
the initiation of any enforcement action at all. However, 
notwithstanding these examples, a civil penalty may be proposed or 
Notice of Violation issued when, in DOE's judgment, such action is 
warranted on the basis of the circumstances of an individual case.
    5. Newly designated Section X., Procurement of Products or Services 
and the Reporting of Defects, is amended by adding the paragraph 
designations a. b. and c. to the first three paragraphs.
    6. Newly designated Section XI., Inaccurate and Incomplete 
Information, is amended by adding the paragraph designations a. and b. 
to the first two paragraphs, redesignating paragraphs (a) through (g) 
as (b)(1) through (b)(7), and adding the paragraph designations c., d., 
e. and f. to the remaining paragraphs.

[[Page 52486]]

    7. Newly-designated Section XII, Secretarial Notification and 
Consultation, is amended by revising ``$100,000'' to read ``the 
statutory limit'' in paragraph a.

[FR Doc. 97-26277 Filed 10-7-97; 8:45 am]
BILLING CODE 6560-50-P