This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

52479

Vol. 62, No. 195

Wednesday, October 8, 1997

1 10 CFR § 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 § 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.

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) selfidentification 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, selfidentification of deficiencies, selfreporting 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).

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
52480 Federal Register / Vol. 62, No. 195 / Wednesday, October 8, 1997 / Rules and Regulations

2The 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.’’

3Nuclear Regulatory Commission, General

Statement of Policy and Procedure for Enforcement

Actions, 61 FR 65561 (Oct. 18, 1996) (revision of

policy).

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.

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 newlydesignated Section IX which is based on

categorization of five types of nuclear

facilities.

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.

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 selfidentifies 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 selftracking 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 selftracking as acceptable self-reporting if

DOE has access to the contractor’s selftracking system and the contractor has

tagged the items as noncompliances
Federal Register / Vol. 62, No. 195 / Wednesday, October 8, 1997 / Rules and Regulations 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.

D. Self-Disclosing Events

A new paragraph 6 is added in newlydesignated 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 selfdisclosing 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 selfdisclosing event does not constitute selfidentification 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. Newlyredesignated 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.
52482 Federal Register / Vol. 62, No. 195 / Wednesday, October 8, 1997 / Rules and Regulations

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

Severity level

Base civil

penalty

amount

(percentage 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 selfidentification, 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
52484 Federal Register / Vol. 62, No. 195 / Wednesday, October 8, 1997 / Rules and Regulations

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 selfreporting 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 postmaintenance 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 selfdisclosing 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%
Federal Register / Vol. 62, No. 195 / Wednesday, October 8, 1997 / Rules and Regulations 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.
52486 Federal Register / Vol. 62, No. 195 / Wednesday, October 8, 1997 / Rules and Regulations

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 96–NM–149–AD; Amendment

39–10116; AD 97–18–06]

RIN 2120–AA64

Airworthiness Directives; Boeing

Model 737 Series Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule.

SUMMARY: This amendment adopts a

new airworthiness directive (AD),

applicable to all Boeing Model 737

series airplanes, that requires revising

the FAA-approved maintenance

program to prohibit the use of pressure

washing within the wheel well or on the

landing gear and to prohibit the use of

pumps and/or nozzles for washing

wheel wells or the landing gear; or

incorporation of a certain Temporary

Revision to the Boeing Airplane

Maintenance Manual into the FAAapproved maintenance program. This

amendment is prompted by a review of

the design of the flight control systems

on Model 737 series airplanes. The

actions specified by this AD are

intended to prevent corrosion of certain

equipment due to the use of

inappropriate pressure washing

techniques. Corrosion of bearings,

cables, electrical connectors, or other

equipment in the main wheel well, if

not detected and corrected in a timely

manner, could result in reduced

controllability of the airplane.

DATES: Effective November 12, 1997.

The incorporation of reference of

certain publications listed in the

regulations is approved by the Director

of the Federal Register as of November

12, 1997.

ADDRESSES: The service information

referenced in this AD may be obtained

from Boeing Commercial Airplane

Group, P.O. Box 3707, Seattle,

Washington 98124–2207. This

information may be examined at the

Federal Aviation Administration (FAA),

Transport Airplane Directorate, Rules

Docket, 1601 Lind Avenue, SW.,

Renton, Washington; or at the Office of

the Federal Register, 800 North Capitol

Street, NW., suite 700, Washington, DC.

FOR FURTHER INFORMATION CONTACT:

David Herron, Aerospace Engineer,

Systems and Equipment Branch, ANM–

130S, FAA, Transport Airplane

Directorate, Seattle Aircraft Certification

Office, 1601 Lind Avenue, SW., Renton,

Washington 98055–4056; telephone

(425) 227–2672; fax (425) 227–1181.

SUPPLEMENTARY INFORMATION: A

proposal to amend part 39 of the Federal

Aviation Regulations (14 CFR part 39) to

include an airworthiness directive (AD)

that is applicable to all Boeing Model

737 series airplanes was published in

the Federal Register on August 28, 1996

(61 FR 44239). That action proposed to

require revising the FAA-approved

maintenance program to prohibit the

use of pressure washing within the

wheel well or on the landing gear and

to prohibit the use of pumps and/or

nozzles for washing wheel wells or the

landing gear.

Interested persons have been afforded

an opportunity to participate in the

making of this amendment. Due

consideration has been given to the

comments received.

Support for the Proposal

One commenter supports the

proposal.

Request To Revise Statement of

Findings of Critical Design Review

Team

One commenter requests the second

paragraph of the Discussion section that

appeared in the preamble to the

proposed rule be revised to accurately

reflect the findings of the Critical Design

Review (CDR) team. The commenter

asks that the FAA delete the one

sentence in that paragraph, which read:

‘‘The recommendations of the team

include various changes to the design of

the flight control systems of these

airplanes, as well as correction of

certain design deficiencies.’’ The

commenter suggests that the following

sentences should be added: ‘‘The team

did not find any design issues that

could lead to a definite cause of the

accidents that gave rise to this effort.

The recommendations of the team

include various changes to the design of

the flight control systems of these

airplanes, as well as incorporation of

certain design improvements in order to

enhance its already acceptable level of

safety.’’

The FAA does not find that a revision

to this final rule in the manner

suggested by the commenter is

necessary, since the Discussion section

of a proposed rule does not reappear in

a final rule. The FAA acknowledges that

the CDR team did not find any design

issue that could lead to a definite cause

of the accidents that gave rise to this

effort. However, as a result of having

conducted the CDR of the flight control

systems on Boeing Model 737 series

airplanes, the team indicated that there

are a number of recommendations that

should be addressed by the FAA for

each of the various models of the Model

737. In reviewing these

recommendations, the FAA has

concluded that they address unsafe

conditions that must be corrected

through the issuance of AD’s. Therefore,

the FAA does not concur that these

design changes merely ‘‘enhance [the

Model 737’s] already acceptable level of

safety.’’

Request To Withdraw the Proposal:

Existing Procedures Are Adequate

Several commenters request that the

proposed rule be withdrawn since

pressure washing procedures exist that

adequately clean the wheel wells and

landing gear, yet provide protective

shielding for various components.

The FAA does not concur that this

final rule should be withdrawn for the

reason requested by the commenters.

Since the issuance of the proposal, the

FAA has reviewed and approved a new

Temporary Revision to the Airplane

Maintenance Manual (AMM), Chapter

12–40–0, that lists specific components

that require protection from exposure to

moisture. The Temporary Revision

describes procedures to shield and

protect these specific components from

moisture during pressure washing.

Therefore, the FAA has revised

paragraph (a) of this final rule to

provide an alternative method of

compliance for the requirements of this

AD by incorporating the Temporary

Revision into the AMM.

Request To Withdraw the Proposal: No

Supporting Data

Several commenters contend that

there are no data or records of in-service

findings that support the conclusion

that corrosion of the wheel wells or the

landing gear is induced by proper

pressure washing. One commenter

considers that the improper use of

pressure equipment, lack of protection

of critical areas, and improper

lubrication techniques are the more

significant and likely causes of any

corrosion occurring in the wheel well.

The commenter suggests that the

appropriate action to minimize the

possibility of corrosion is: proper

training of cleaning personnel, use of

proper equipment, protection of critical