Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Notices 6677

1Orders, rather than civil penalties, are used

when the intent is to suspend or terminate licensed

activities.

NUCLEAR REGULATORY

COMMISSION

[NUREG–1600]

Policy and Procedure for Enforcement

Actions; Policy Statement

AGENCY: Nuclear Regulatory

Commission.

ACTION: Policy Statement; amendment.

SUMMARY: The Nuclear Regulatory

Commission (NRC) is amending its

General Statement of Policy and

Procedure for Enforcement Actions

(Enforcement Policy) to modify

Supplement VI, ‘‘Fuel Cycle and

Materials Operations,’’ as well as to

reflect recent NRC organizational

changes. The Supplement VI

amendment is warranted to reflect

experience gained through fuel cycle

enforcement actions and as a result of

the Commission’s recently designated

responsibility for jurisdiction over the

Gaseous Diffusion Plants (GDPs). The

Enforcement Policy is also being

amended to establish base civil

penalties for GDPs. By a separate action

published in this issue in the Federal

Register, the Commission has issued a

final rule amending the current

regulations that govern GDPs. The

revision to the Enforcement Policy

reflects those amendments.

In addition, the Enforcement Policy is

being amended to reflect recent NRC

organizational changes. These changes

redesignate which NRC officials are

delegated the responsibility for

performing certain enforcement

functions. A clarification is also being

made to remove ambiguity as to when

the Commission is to be consulted prior

to issuance of certain actions proposing

civil penalties.

DATES: This amendment is effective on

February 12, 1997. Comments are due

on or before March 14, 1997.

ADDRESSES: Send written comments to:

The Secretary of the Commission, U.S.

Nuclear Regulatory Commission,

Washington, DC 20555–0001. ATTN:

Docketing and Service Branch. Hand

deliver comments to: 11555 Rockville

Pike, Rockville, Maryland, between 7:45

am and 4:15 pm, Federal workdays.

Copies of comments received may be

examined at the NRC Public Document

Room, 2120 L Street, NW (Lower Level),

Washington, DC.

FOR FURTHER INFORMATION CONTACT:

James Lieberman, Director, Office of

Enforcement, U.S. Nuclear Regulatory

Commission, Washington, DC 20555–

0001, (301) 415–2741.

SUPPLEMENTARY INFORMATION:

The Commission’s Enforcement

Policy was first issued on September 4,

1980. The Enforcement Policy is

published as NUREG–1600, ‘‘General

Statement of Policy and Procedure for

NRC Enforcement Actions (60 FR 34381;

June 30, 1995).’’ The Enforcement

Policy has been amended on a number

of occasions, most recently on October

18, 1996 (61 FR 54461). As a result of

experience gained through fuel cycle

enforcement actions and amendments to

10 CFR part 76 being published today as

a final regulation, an amendment to the

Enforcement Policy is warranted to

provide guidance on categorizing

potential violations of 10 CFR part 76

and establish base civil penalties for

violation of part 76. This amendment to

the Enforcement Policy is being issued

concurrently with the new rule.

Base Civil Penalties

Table 1A of the policy, which

establishes base civil penalties for

different types of licensees, is being

modified to add GDPs to category ‘‘a.’’

The amended table will provide that the

base civil penalty for a Severity Level I

violation of the Commission’s

requirements by a GDP will be at the

statutory limit of $110,000. In

accordance with Table 1B, base civil

penalties for Severity Level II and III

violations are lesser amounts. In

determining the proper civil penalty

amount, the Commission considered the

structures of these tables, which

generally take into account the gravity

of the violation as a primary

consideration and the ability to pay as

a secondary consideration.

Generally, operations involving

greater nuclear material inventories and

greater potential consequences to the

public and to workers receive higher

civil penalties. In the case of GDPs,

there are large numbers of workers at

the sites, significant source term present

(i.e., inventory of licensed material), and

various chemical and toxic substances

used as part of the GDPs operations.

Therefore, in the event of an accident,

there is the potential for significant

radiological and non-radiological

hazards to members of the public,

including workers, and the

environment.

With regard to the secondary factor of

ability to pay, it is not the NRC’s

intention that the economic impact of a

civil penalty be so severe that it puts the

licensee or certificate holder out of

business 1 or adversely affects a

licensee’s or certificate holder’s ability

to safely conduct licensed activities.

The deterrent effect of civil penalties is

best served when the amount of

penalties take into account a licensee’s

or certificate holder’s ability to pay. In

this case, issuing a civil penalty of less

than $110,000 to the Corporation for a

significant violation would be

disproportionate to the Corporation’s

significant revenues. In other words, a

civil penalty of $110,000 for a Severity

Level I violation would be financially

appropriate, but not financially

crippling. In addition, a penalty based

on this amount should get more

attention from the Corporation and

should have a greater deterrent effect.

Given the financial resources of GDPs,

it is appropriate to utilize significant

civil penalties to provide an effective

deterrence from violating the

Commission’s requirements such that

the likelihood of performance

necessitating a shutdown order would

be minimal. Accordingly, a base civil

penalty of $110,000 is appropriate in

view of the potential consequences

during an accident and the ability to

pay. In addition, establishing the base

civil penalty at the statutory limit would

provide, at the outset, a clear message

concerning the cost of noncompliance

and additional motivation to maintain

safety and compliance.

Severity Levels

The policy recognizes that regulatory

requirements have varying degrees of

safety, safeguards, or environmental

significance. Therefore, the relative

importance of each violation, including

both the technical significance and the

regulatory significance, is evaluated as

the first step in the enforcement process.

In considering the significance of a

violation, the staff considers the

technical significance (i.e., actual and

potential consequences) and regulatory

significance. Supplement VI, ‘‘Fuel

Cycle and Materials Operations,’’ is

being amended to provide additional

examples for categorizing the severity

levels of violations.

The changes are:

Severity Level I

1. Example A.5, which is being added

to Supplement VI, is consistent with

Supplement I guidance. This example is

applicable for the Gaseous Diffusion

Plants (GDPs) because other fuel

facilities do not have Technical Safety

Requirements (TSRs). Safety limits are

those bounds within which the process

variables must be maintained for

adequate control of the operation and

that must not be exceeded in order to

protect the integrity of the physical
6678 Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Notices

system that is designed to guard against

the uncontrolled release of radioactivity.

2. Example A.6 is being added to

Supplement VI to emphasize that a

significant injury or loss of life due to

a loss of control over licensed or

certified activities, including chemical

processes that are integral to the

licensed or certified activity, whether

radioactive material is released or not, is

of very significant regulatory concern.

This concern exists because an actual

impact to the health and safety of the

public or workers has occurred from

activities related to the processing of

radioactive material.

Severity Level II

1. Example B.4 is being added to

Supplement VI to emphasize that,

although less significant than Example

A.3 in Supplement VI, the absence of all

the criticality safety controls for a single

anticipated or unanticipated nuclear

criticality scenario is of very significant

regulatory concern when the availability

of fissile material makes a nuclear

criticality accident possible.

2. Example B.5 is being added to

Supplement VI to underscore that

events which do not involve actual

significant injuries or loss of life, but

reasonably could have if circumstances

had been different, are considered of

very significant regulatory concern.

Severity Level III

1. Example C.5 is being modified in

Supplement VI so that it is consistent

with Supplement IV guidance. The NRC

considers that a substantial potential for

exposures, radiation levels,

contamination levels, or releases

(including releases of toxic material)

caused by the failure to comply with

NRC regulations or with procedures

established to comply with license

conditions to be a significant regulatory

concern because it could have serious

consequences to the public and licensee

employees.

2. Example C.12 is being added to

Supplement VI to emphasize that the

failure of a certified facility to comply

with a limiting condition for operation

is considered a significant regulatory

concern. This example is similar to

Supplement I guidance and has been

selected for the GDPs because other fuel

cycle facilities do not have TSRs.

3. Example C.13 is being added to

Supplement VI to emphasize that the

loss of defense-in-depth over licensed or

certified activities is considered a

significant regulatory concern. This

example is consistent with Supplement

I guidance and is applicable to both fuel

cycle and gaseous diffusion operations.

4. Example C.14, which is consistent

with Supplement I guidance, is being

added to Supplement VI. This example

is generally applicable to the fuel cycle

facilities.

5. Example C.15 is being added to

Supplement VI. The failure to meet the

requirements of 10 CFR 76.68 is

significant because of the importance of

certificate holders using the required

process for maintaining and operating

the facilities in accordance with the

design and procedures described in

their safety analysis report when there

is uncertainty as to whether an

unreviewed safety question is present.

An after-the-fact evaluation that

demonstrates that an unreviewed safety

question was not involved would, in

general, not mitigate the regulatory

significance of failing to perform an

appropriate evaluation prior to

implementation of the change.

6. Example C.16 is being added to

Supplement VI to emphasize that

adequate control over vendors or

contractors performing safety-related

work or providing safety-related

services is a significant regulatory

concern. This example amplifies the

NRC’s concern that all safety-related

activities, whether performed by the

certificate holder or by one of its

contractors, be conducted in accordance

with the requirements in the

application, TSRs and certificates.

7. Example C.17, which is consistent

with the Supplement I guidance, is

being added to Supplement VI. This

example points out that equipment

failures caused by inadequate or

improper maintenance that substantially

complicates recovery from a plant

transient is a significant regulatory

concern.

8. Example C.18 is being added to

Supplement IV. This example indicates

that the absence of all but one criticality

safety control for a single anticipated or

unanticipated nuclear criticality

scenario is a significant regulatory

concern when a critical mass of fissile

material was present or reasonably

available, because a nuclear criticality

accident was possible.

Severity Level IV

1. Although less significant than the

above examples, examples D.5 through

D.8 are being added to Supplement VI

to stress that such failures are more than

a minor concern because they could

lead to a more serious concern if left

uncorrected.

Organizational Changes

In addition to the above changes,

recent NRC organizational changes have

redistributed certain staff functions

reporting to the Executive Director for

Operations. Under the previous

organization, the Deputy Executive

Director for Nuclear Material Safety,

Safeguards, and Operations Support

(DEDS) was delegated the authority to

approve and/or issue escalated

enforcement actions associated with

licensees of the Office of Nuclear

Material Safety and Safeguards (NMSS).

Similarly, the Deputy Executive Director

for Nuclear Reactor Regulation, Regional

Operations, and Research (DEDR) was

delegated the authority to approve and/

or issue escalated enforcement actions

associated with licensees of the Office of

Nuclear Reactor Regulation (NRR).

Based on this distribution of functions,

these two Deputy Executive Directors

were designated as the principal

enforcement officers of the NRC.

The NRC organizational changes have

replaced the previous two Deputy

Executive Director positions with three

new Deputy Executive Director

positions. Under the new organizational

arrangement, the NRC Office of

Enforcement (OE) reports to the Deputy

Executive Director for Regulatory

Effectiveness, Program Oversight,

Investigations, and Enforcement

(DEDO), and NMSS and NRR both

report to the Deputy Executive Director

for Regulatory Programs (DEDR). This

change in reporting responsibilities

consolidates the technical office

oversight under the new DEDR, and

redesignates a single deputy, the DEDO,

as the NRC’s principal enforcement

officer.

Consistent with this change, the NRC

Enforcement Policy is being modified to

replace all previous references to either

Deputy Executive Director with

references to the DEDO. As such, the

Enforcement Policy will designate the

DEDO as having the authority to

approve and/or issue escalated

enforcement actions associated with

either NRR or NMSS licensees. These

changes will be reflected in the

amendment to NUREG–1600.

Clarification

The Commission previously

published (61 FR 65088, December 10,

1996) changes to the Enforcement Policy

concerning consultation with the

Commission prior to issuance of

enforcement actions that proposed a

civil penalty more than three times the

Severity Level value shown in Table 1A

for a single violation. The Commission

is re-publishing that portion of the

Policy (Section III.2) with slightly

revised language to remove ambiguity

and make clear that the requirement

applies to a single violation or problem

and not the total of multiple penalties
Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Notices 6679

that may be proposed in one

enforcement action. This is consistent

with the Commission’s original

understanding and intent.

Paperwork Reduction Act Statement

This policy statement does not

contain a new or amended information

collection requirement subject to the

Paperwork Reduction Act of 1995 (44

U.S.C. 3501 et seq.). Existing

requirements were approved by the

Office of Management and Budget,

approval number 3150–0136. The

approved information collection

requirements contained in this policy

statement appear in Section VII.C.

Public Protection Notification

The NRC may not conduct or sponsor,

and a person is not required to respond

to, a collection of information unless it

displays a currently valid OMB control

number.

Small Business Regulatory Enforcement

Fairness Act

In accordance with the Small

Business Regulatory Enforcement

Fairness Act of 1996, the NRC has

determined that this action is not a

‘‘major rule’’ and has verified this

determination with the Office of

Information and Regulatory Affairs,

Office of Management and Budget.

Accordingly, the NRC Enforcement

Policy is amended by:

a. Changing the first paragraph under

Section III, ‘‘Responsibilities,’’ by

designating the principal enforcement

officer of the NRC as ‘‘the Deputy

Executive Director for Regulatory

Effectiveness, Program Oversight,

Investigations, and Enforcement

(DEDO), hereafter referred to as the

Deputy Executive Director,’’ and

deleting the references to the former

Deputy Executive Director for Nuclear

Material Safety, Safeguards, and

Operations Support (DEDS) and the

former Deputy Executive Director for

Nuclear Reactor Regulation, Regional

Operations, and Research (DEDR).

b. Revising all subsequent references

to ‘‘the appropriate Deputy Executive

Director’’ to read ‘‘the Deputy Executive

Director.’’

c. Revising Section III,

‘‘Responsibilities,’’ Section VI,

‘‘Enforcement Actions,’’ Subsection B.,

Table 1A, Category a., and Supplement

VI, ‘‘Fuel Cycle and Materials

Operations,’’ as follows:

General Statement of Policy and

Procedure for NRC Enforcement

Actions

* * * * *

III. Responsibilities

* * * * *

Unless Commission consultation or

notification is required by this policy,

the NRC staff may depart, where

warranted in the public’s interest, from

this policy as provided in Section VII,

‘‘Exercise of Enforcement Discretion.’’

The Commission will be provided

written notification of all enforcement

actions involving civil penalties or

orders. The Commission will also be

provided notice the first time that

discretion is exercised for a plant

meeting the criteria of Section VII.B.2.

In addition, the Commission will be

consulted prior to taking action in the

following situations (unless the urgency

of the situation dictates immediate

action):

* * * * *

(2) Proposals to impose a civil penalty

for a single violation or problem that is

greater than 3 times the Severity Level

I value shown in Table 1A for that class

of licensee;

* * * * *

VI. Enforcement Actions

* * * * *

B. Civil Penalty

TABLE 1A—BASE CIVIL PENALTIES

a. Power reactors and gaseous

diffusion plants .................... $110,000

b. Fuel fabricators, industrial

processors, and independent

spent fuel and monitored retrievable storage installations ...................................... 27,500

c. Test reactors, mills and uranium conversion facilities,

contractors, vendors, waste

disposal licensees, and industrial radiographers .......... 11,000

d. Research reactors, academic, medical, or other

material licensee 1 ................ 5,500

1This applies to nonprofit institutions not

otherwise categorized in this table, mobile

nuclear services, nuclear pharmacies, and

physician offices.

* * * * *

Supplement VI—Fuel Cycle and

Materials Operations

This supplement provides examples

of violations in each of the four severity

levels as guidance in determining the

appropriate severity level for violations

in the area of fuel cycle, gaseous

diffusion plants, and materials

operations.

A. Severity Level I—Violations

involving for example:

* * * * *

3. A nuclear criticality accident;

4. A failure to follow the procedures

of the quality management program,

required by 10 CFR 35.32, that results in

a death or serious injury (e.g.,

substantial organ impairment) to a

patient;

5. A safety limit, as defined in 10 CFR

76.4, the Technical Safety

Requirements, or the application being

exceeded; or

6. Significant injury or loss of life due

to a loss of control over licensed or

certified activities, including chemical

processes that are integral to the

licensed or certified activity, whether

radioactive material is released or not.

B. Severity Level II—Violations

involving for example:

* * * * *

2. A system designed to prevent or

mitigate a serious safety event being

inoperable;

3. A substantial programmatic failure

in the implementation of the quality

management program required by 10

CFR 35.32 that results in a

misadministration;

4. A failure to establish, implement,

or maintain all criticality controls (or

control systems) for a single nuclear

criticality scenario when a critical mass

of fissile material was present or

reasonably available, such that a nuclear

criticality accident was possible; or

5. The potential for a significant

injury or loss of life due to a loss of

control over licensed or certified

activities, including chemical processes

that are integral to the licensed or

certified activity, whether radioactive

material is released or not (e.g.,

movement of liquid UF6 cylinder by

unapproved methods).

C. Severity Level III—Violations

involving for example:

1. A failure to control access to

licensed materials for radiation

protection purposes as specified by NRC

requirements;

* * * * *

5. A substantial potential for

exposures, radiation levels,

contamination levels, or releases,

including releases of toxic material

caused by a failure to comply with NRC

regulations, from licensed or certified

activities in excess of regulatory limits;

* * * * *

10. A failure to receive required NRC

approval prior to the implementation of

a change in licensed activities that has

radiological or programmatic

significance, such as, a change in

ownership; lack of an RSO or

replacement of an RSO with an

unqualified individual; a change in the
6680 Federal Register / Vol. 62, No. 29 / Wednesday, February 12, 1997 / Notices

location where licensed activities are

being conducted, or where licensed

material is being stored where the new

facilities do not meet safety guidelines;

or a change in the quantity or type of

radioactive material being processed or

used that has radiological significance;

11. A significant failure to meet

decommissioning requirements

including a failure to notify the NRC as

required by regulation or license

condition, substantial failure to meet

decommissioning standards, failure to

conduct and/or complete

decommissioning activities in

accordance with regulation or license

condition, or failure to meet required

schedules without adequate

justification;

12. A significant failure to comply

with the action statement for a

Technical Safety Requirement Limiting

Condition for Operation where the

appropriate action was not taken within

the required time, such as:

(a) In an autoclave, where a

containment isolation valve is

inoperable for a period in excess of that

allowed by the action statement; or

(b) Cranes or other lifting devices

engaged in the movement of cylinders

having inoperable safety components,

such as redundant braking systems, or

other safety devices for a period in

excess of that allowed by the action

statement;

13. A system designed to prevent or

mitigate a serious safety event:

(a) Not being able to perform its

intended function under certain

conditions (e.g., safety system not

operable unless utilities available,

materials or components not according

to specifications); or

(b) Being degraded to the extent that

a detailed evaluation would be required

to determine its operability;

14. Changes in parameters that cause

unanticipated reductions in margins of

safety;

15. A significant failure to meet the

requirements of 10 CFR 76.68, including

a failure such that a required certificate

amendment was not sought;

16. A failure of the certificate holder

to conduct adequate oversight of

vendors or contractors resulting in the

use of products or services that are of

defective or indeterminate quality and

that have safety significance;

17. Equipment failures caused by

inadequate or improper maintenance

that substantially complicates recovery

from a plant transient; or

18. A failure to establish, maintain, or

implement all but one criticality control

(or control systems) for a single nuclear

criticality scenario when a critical mass

of fissile material was present or

reasonably available, such that a nuclear

criticality accident was possible.

D. Severity Level IV—Violations

involving for example:

* * * * *

2. Other violations that have more

than minor safety or environmental

significance;

3. Failure to follow the quality

management (QM) program, including

procedures, whether or not a

misadministration occurs, provided the

failures are isolated, do not demonstrate

a programmatic weakness in the

implementation of the QM program, and

have limited consequences if a

misadministration is involved; failure to

conduct the required program review; or

failure to take corrective actions as

required by 10 CFR 35.32;

4. A failure to keep the records

required by 10 CFR 35.32 or 35.33;

5. A less significant failure to comply

with the Action Statement for a

Technical Safety Requirement Limiting

Condition for Operation when the

appropriate action was not taken within

the required time;

6. A failure to meet the requirements

of 10 CFR 76.68 that does not result in

a Severity Level I, II, or III violation;

7. A failure to make a required written

event report, as required by 10 CFR

76.120(d)(2); or

8. A failure to establish, implement,

or maintain a criticality control (or

control system) for a single nuclear

criticality scenario when the amount of

fissile material available was not, but

could have been sufficient to result in

a nuclear criticality.

* * * * *

Dated at Rockville, Maryland, this 6th day

of February, 1997.

For the Nuclear Regulatory Commission.

John C. Hoyle,

Secretary of the Commission.

[FR Doc. 97–3465 Filed 2–11–97; 8:45 am]

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