26630 Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices

1Copies of NUREG–1622 may be purchased from

the Superintendent of Documents, U.S. Government

Printing Office, Mail Stop SSOP, Washington, DC

20402–9328. Copies are also available from the

National Technical Information Service, 5285 Port

Royal Road, Springfield, Virginia 22161. A copy is

also available for inspection and copying for a fee

in the NRC Public Document Room, 2120 L Street,

NW. (Lower Level), Washington, DC 20555–0001.

The report is also included on the NRC’s Office of

Enforcement’s homepage on the Internet at

www.nrc.gov/OE/.

EXECUTIVE ORDER 12372: This program is

subject to the provisions of Executive

Order 12372. Executive Order 12372

allows States that option of setting up a

system for reviewing applications from

within their States for assistance under

certain Federal programs. Applicants

(other than Federally-recognized Indian

tribal governments) should contact their

State Single Point of Contact (SPOC), a

list of which is included in the

application kit, along with further

instructions on proposed projects

serving more than one State.

The Catalog of Federal Domestic

Assistance number is: 16.603.

Dated: May 11, 1998.

Morris L. Thigpen,

Director, National Institute of Corrections.

[FR Doc. 98–12836 Filed 5–12–98; 8:45 am]

BILLING CODE 4410–36–M

DEPARTMENT OF JUSTICE

National Institute of Corrections

Advisory Board Meeting

TIME AND DATE: 8:00 a.m. to 12 noon on

Tuesday, June 23, 1998.

PLACE: DoubleTree Hotel—World Arena,

1775 East Cheyenne Mountain

Boulevard, Colorado Springs, Colorado

80906.

STATUS: Open.

MATTERS TO BE CONSIDERED: Fees for

Technical/Training Resource Providers;

Updates on Strategic Planning and

Interstate Compact Activities; and

Program Division Reports and FY 1999

Service Plan Recommendations.

CONTACT PERSON FOR MORE INFORMATION:

Larry Solomon, Deputy Director, (202)

307–3106, ext. 155.

Morris L. Thigpen,

Director.

[FR Doc. 98–12662 Filed 5–12–98; 8:45 am]

BILLING CODE 4410–36–M

NUCLEAR REGULATORY

COMMISSION

[Docket Nos. 50–387 and 50–388]

Pennsylvania Power and Light

Company Susquehanna Steam Electric

Station, Units 1 and 2; Correction

The April 27, 1998, Federal Register

contained a ‘‘Notice of Consideration of

Issuance of Amendments to Facility

Operating Licenses, Proposed No

Significant Hazards Consideration

Determination, and Opportunity for a

Hearing,’’ for the Susquehanna Steam

Electric Station, Unit 1 and 2. This

notice corrects the notice published in

the Federal Register on April 27, 1998

(63 FR 20667). The application date

should read August 1, 1996, instead of

August 6, 1996.

Dated at Rockville, Maryland, this 4th day

of May 1998.

For the Nuclear Regulatory Commission.

Robert A. Capra,

Director, Project Directorate I–2, Division of

Reactor Projects—I/II, Office of Nuclear

Reactor Regulation.

[FR Doc. 98–12673 Filed 5–12–98; 8:45 am]

BILLING CODE 7590–01–P

NUCLEAR REGULATORY

COMMISSION

[NUREG–1600, Rev. 1]

Revision of NRC Enforcement Policy

AGENCY: Nuclear Regulatory

Commission.

ACTION: Policy statement.

SUMMARY: The Nuclear Regulatory

Commission (NRC) is publishing a

complete revision of the agency’s

Enforcement Policy (NUREG–1600,

‘‘General Statement of Policy and

Procedure for NRC Enforcement

Actions’’) based on (1) a 2-year review

of the revised Enforcement Policy, that

was effective June 30, 1995, and (2) a

consolidation of changes to the

Enforcement Policy since June 30, 1995.

DATES: This action is effective May 13,

1998, while comments are being

received. Submit comments on or before

June 29, 1998.

ADDRESSES: Submit written comments

to: David L. Meyer, Chief, Rules and

Directives Branch, Division of

Administrative Services, Office of

Administration, Mail Stop: T6D59, U.S.

Nuclear Regulatory Commission,

Washington, DC 20555. Hand deliver

comments to: 11555 Rockville Pike,

Rockville, Maryland, between 7:30 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,

(301) 415–2741.

SUPPLEMENTARY INFORMATION: On June

30, 1995, the Commission published a

complete revision of the NRC’s

Enforcement Policy (60 FR 34381). The

changes to the Enforcement Policy

resulted from the efforts of a review

team established in 1994 to assess the

NRC’s enforcement program. The review

team published its recommendations in

NUREG–1525, ‘‘Assessment of the NRC

Enforcement Program,’’ and the

Commission made revisions to the

Enforcement Policy after considering

those recommendations. The revisions

to the Enforcement Policy were

intended to, among other things:

• Emphasize the importance of

identifying problems before events

occur, and of taking prompt,

comprehensive corrective action when

problems are identified;

• Direct agency attention at licensees

with multiple enforcement actions in a

relatively short period; and

• Focus on current performance of

licensees.

The revisions to the Enforcement

Policy were also intended to better focus

the inspection and enforcement process

on safety, provide greater incentives for

strong self-monitoring and corrective

action programs in the civil penalty

assessment process, provide more

predictability and consistency in the

civil penalty assessment process, and to

better convey clear regulatory messages.

When the Commission published the

revised Enforcement Policy in the

Federal Register on June 30, 1995, it

stated that it would provide the public

an opportunity to comment on the

revised Enforcement Policy after it had

been in effect for about 18 months. On

February 5, 1997 (62 FR 5495), the

Commission published an opportunity

for the public to comment on the

revised Enforcement Policy.

The NRC has reviewed approximately

2 years of experience under the revised

Enforcement Policy and considered

public comments. The NRC staff

prepared a report (NUREG–1622,1 ‘‘NRC

Enforcement Policy Review: July 1995—

July 1997,’’ November 1997) that

concluded that the changes made to the

Enforcement Policy in 1995 (especially

in the civil penalty assessment process)

have helped to improve the

predictability and consistency of

enforcement actions, while maintaining

the agency’s desire to use enforcement

sanctions for providing appropriate

emphasis and deterrence in a way that

helps to support the agency’s overall

safety mission. This conclusion is
Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices 26631

reflected in several aspects of the

Enforcement Policy:

• The current Enforcement Policy is

appropriately geared toward creating

deterrence (i.e., taking action in a

manner that provides incentives to

identify and correct violations that have

occurred and discourage future

violations) and is properly structured

for nuclear regulation.

• The Enforcement Policy recognizes

that violations have varying degrees of

safety significance, and that in

considering the significance of a

violation, it is appropriate to consider

the technical significance (i.e., actual

and potential consequences) and the

regulatory significance. In addition, risk

is an appropriate consideration in

evaluating the technical significance of

a violation.

• The Enforcement Policy is

appropriately structured to maintain a

focus on safety.

• The current civil penalty

assessment process is appropriately

structured to reflect issues the agency

believes are appropriate to consider in

assessing whether a civil penalty should

be proposed, i.e., past performance,

identification, corrective action, and

those warranting discretion.

• The use of discretion and judgment

throughout the deliberative process

recognizes that enforcement of NRC

requirements does not lend itself to

mechanistic treatment.

Notwithstanding the general

satisfaction with the Enforcement

Policy, the review included a number of

recommendations to the Commission for

revisions to the Enforcement Policy and

for development of additional

enforcement guidance. The Commission

is issuing this policy statement after

considering those recommendations and

the bases for them in NUREG–1622.

The more significant changes to the

Enforcement Policy (in the order that

they appear in the Policy) are described

below:

I. Introduction and Purpose

This section has been modified to

include a brief discussion on the

meaning of ‘‘safety’’ and ‘‘compliance’’

as they are used in the context of this

policy statement. This section also

references a new appendix (Appendix

A) that describes the nexus between

safety and compliance.

III. Responsibilities

This section has been modified to

reflect that the Chief Financial Officer

(CFO) is delegated the authority to issue

orders where licensees violate

Commission regulations by nonpayment

of license and inspection fees. The

Office of the Chief Financial Officer

(OCFO) was created as part of the NRC’s

January 5, 1997, reorganization. The

Office of the Controller has now been

incorporated into the OCFO and the

position of the Director, Office of the

Controller (previously identified in the

policy as having the issuing authority),

has been subsumed by the CFO.

This section has also been modified to

emphasize that the technical and

regulatory significance of violations are

considered in conjunction with the

principles of the policy statement and

the surrounding circumstances when

the agency determines the appropriate

enforcement strategy.

This section has also been revised to

indicate that the Commission is to be

provided notification (where

appropriate, based on the uniqueness or

significance of the issue) for a plant

meeting the criteria of Section VII.B.6

(mitigation for violations involving

special circumstances). This is

consistent with the policy revision to

Section VII issued on December 26,

1996 (61 FR 68070).

IV. Severity of Violations

This section has been modified such

that minor violations will no longer be

noted as Non-Cited Violations (NCVs)

when they are documented in

inspection reports. Instead, if a minor

violation warrants documentation, it

will be noted as a violation of minor

significance that is not subject to formal

enforcement action. The definition of an

NCV included in footnote 6 has also

been deleted. The purpose of these

changes is to avoid confusion between

minor violations dispositioned as NCVs

in accordance with Section IV and

Severity Level IV violations

dispositioned as NCVs in accordance

with Section VII.B.1, ‘‘LicenseeIdentified Severity Level IV Violations.’’

Use of the term ‘‘NCV’’ will now be

reserved for those Severity Level IV

violations that meet the criteria for

discretion in Section VII.B.1.

V. Predecisional Enforcement

Conferences

This section has been modified to

indicate that a predecisional

enforcement conference is not required

if the NRC has sufficient information to

make an informed enforcement

decision. If a conference is not held, the

licensee may be requested to provide a

written response to an inspection report

as to the licensee’s views on the

apparent violations and their root

causes and a description of planned or

implemented corrective actions. (The

previous discussion indicated that the

licensee will normally be requested to

provide a written response.) It is the

NRC’s intent that this approach will

normally be taken in the event a civil

penalty is under consideration. This

section has also been modified to

include an additional option when a

conference is not held, such that the

NRC may proceed to issue an

enforcement action without first

obtaining the licensee’s response to the

inspection report, if the NRC has

sufficient information to conclude that a

civil penalty is not warranted. This

approach would still: (1) Provide

licensees an opportunity to request a

conference to dispute the action, (2)

provide licensees an opportunity to

dispute the action in writing through

the provisions of 10 CFR 2.201 (as with

any Notice of Violation), (3) allow the

NRC to conduct a conference where

matters are disputed or where the

licensee’s documented corrective

actions are not sufficiently prompt and

comprehensive, and (4) provide for

modification or recision of the NOV, if

appropriate.

It should be noted that these

modifications are not meant to be

construed as exclusive enforcement

options. In other words, it does not

change the existing practice whereby

the NRC may choose to issue an

enforcement action (including civil

penalties and orders) without

conducting a conference. These changes

are being made in an effort to make the

enforcement process more efficient (by

reducing the number of conferences and

reducing the workload of both the NRC

and licensees and improving the

timeliness of enforcement actions).

VI. Enforcement Actions

This general discussion of the NRC’s

philosophy and approach to taking

enforcement has been modified by

including the recognition that

circumstances regarding a violation may

warrant discretion such that the NRC

may refrain from issuing a Notice of

Violation or other enforcement action.

This discussion was previously

included in Section VI.A, ‘‘Notice of

Violation,’’ and has been more

appropriately relocated to this section.

A. Notice of Violation

The NRC has had a long-standing

policy that licensees are not ordinarily

cited for violations resulting from

matters not within their control, such as

equipment failures that are not

avoidable by reasonable licensee quality

assurance measures or management

controls. This discussion has been

deleted from this section and more

appropriately included in the

discussion on mitigation of sanctions in
26632 Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices

Section VII.B.6, ‘‘Violations Involving

Special Circumstances.’’

B. Civil Penalty

1. Base Civil Penalty

Table 1A has been revised to correct

the inadvertent omission of a footnote

that indicates that large firms engaged in

manufacturing or distribution of

byproduct, source, or special nuclear

material be considered as industrial

processors. Table 1A had included this

footnote prior to the 1995 policy

revision and this footnote was included

in the table in the draft Federal Register

notice that the Commission approved

for publication and in the table in

Section II.D.7.c of NUREG–1525. Table

1A has also been revised to include

additional guidance in determining

which category material users should be

considered under by including ‘‘other

large material users’’ in category ‘‘c’’

and ‘‘other small materials users’’ in

category ‘‘d.’’

VII. Exercise of Discretion

B. Mitigation of Enforcement Sanctions

Section VII.B.1, ‘‘Licensee-Identified

Severity Level IV Violations,’’ is being

modified to address licensee-identified

violations that are identified as a result

of an event. On December 10, 1996 (61

FR 65088), the Commission issued a

revision to the Enforcement Policy that

included a modification to the criterion

in Section VII.B.1.a. Specifically, the

phrase ‘‘including identification

through an event’’ was deleted from the

criterion. The modification was

intended to make it clear that use of

discretion is not automatic if the

violation is identified through an event.

A footnote is being included to the

criterion to address how the NRC will

normally consider violations that are

identified as a result of an event.

The Commission recognizes that there

may be particular circumstances in a

case where discretion is warranted and

the NRC should refrain from issuing

enforcement action. Sections VII.B.3,

VII.B.4, and VII.B.6 of the Enforcement

Policy provide that discretion may be

warranted for certain Severity Level II

and III violations. If the circumstances

of a particular case may warrant

discretion at Severity Level II or III, then

discretion may also be appropriate at

Severity Level IV. Therefore, changes

have been made to the examples to

reflect that the NRC may choose to

refrain from issuing a Notice of

Violation for a Severity Level IV

violation.

Section VII.B.6 was also modified to

include additional factors for

consideration, including whether the

regulatory requirement that was violated

was clear, or given the NRC’s current

information, appropriate. As previously

addressed, this section also includes

that the NRC may refrain from issuing

enforcement action for violations

resulting from matters beyond a

licensee’s control. However, licensees

are generally responsible for the actions

of its employees. The revised text,

consistent with long-standing NRC

interpretation, makes it clear that

licensees are also responsible for the

actions of their contractors.

Appendix A: Safety and Compliance

This appendix has been added to

address the NRC’s philosophy on the

nexus between safety and compliance.

Appendix B: Supplements—Violation

Examples

This appendix was administratively

created as a result of the addition of

Appendix A and includes the previous

guidance included in the Supplements

section of the policy.

Supplement VII—Miscellaneous

Matters

Examples B.4 and C.4 have been

revised to reflect NRC practice in

applying Severity Level II and III

categorization for violations involving

discrimination. In particular, Severity

Level II categorization is appropriate for

discriminatory acts by middle to upper

management, not simply any level

above first-line supervision. Severity

Level III categorization is appropriate

for low-level supervision and

management, even if they are above a

first-line supervisor.

Paperwork Reduction Act

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 of

OMB.

Accordingly, the NRC Enforcement

Policy is revised to read as follows:

GENERAL STATEMENT OF POLICY AND

PROCEDURE FOR NRC ENFORCEMENT

ACTIONS

Table of Contents

Preface

I. Introduction and Purpose

II. Statutory Authority

A. Statutory Authority

B. Procedural Framework

III. Responsibilities

IV. Severity of Violations

A. Aggregation of Violations

B. Repetitive Violations

C. Willful Violations

D. Violations of Reporting Requirements

V. Predecisional Enforcement Conferences

VI. Enforcement Actions

A. Notice of Violation

B. Civil Penalty

1. Base Civil Penalty

2. Civil Penalty Assessment

a. Initial Escalated Action

b. Credit for Actions Related to

Identification

c. Credit for Prompt and Comprehensive

Corrective Action

d. Exercise of Discretion

C. Orders

D. Related Administrative Actions

VII. Exercise of Discretion

A. Escalation of Enforcement Sanctions

1. Civil Penalties

2. Orders

3. Daily Civil Penalties

B. Mitigation of Enforcement Sanctions

1. Licensee-Identified Severity Level IV

Violations

2. Violations Identified During Extended

Shutdowns or Work Stoppages

3. Violations Involving Old Design Issues

4. Violations Identified Due to Previous

Enforcement Action

5. Violations Involving Discrimination

6. Violations Involving Special

Circumstances

C. Exercise of Discretion for an Operating

Facility

VIII. Enforcement Actions Involving

Individuals

IX. Inaccurate and Incomplete Information

X. Enforcement Action Against NonLicensees

XI. Referrals to the Department of Justice

XII. Public Disclosure of Enforcement

Actions

XIII. Reopening Closed Enforcement Actions

Appendix A: Safety and Compliance

Appendix B: Supplements—Violation

Examples

Preface

The following statement of general

policy and procedure explains the

enforcement policy and procedures of

the U.S. Nuclear Regulatory

Commission (NRC or Commission) and
Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices 26633

1Antitrust enforcement matters will be dealt with

on a case-by-case basis.

2The term ‘‘contractor’’ as used in this policy

inlcudes vendors who supply products or services

to be used in an NRC-licensed facility or activity.

3This policy primarily addresses the activities of

NRC licensees and applicants for NRC linceses.

Therefore, the term ‘‘licensee’’ is used throughout

the policy. However, in those cases where the NRC

determines that it is appropriate to take

enforcement action against a non-licensee or

individual, the guidance in this policy will be used,

as applicable. These non-licensees include

contractors and subcontractors, holders of, or

applicants for, NRC approvals, e.g, certificates of

compliance, early site permits, or standard design

certiciates and the employees of these nonlicensees. Specific guidance regarding enforcement

action against individuals and non-licensees is

addressed in Sections VIII and X. respectively.

the NRC staff (staff) in initiating

enforcement actions, and of the

presiding officers and the Commission

in reviewing these actions. This

statement is applicable to enforcement

in matters involving the radiological

health and safety of the public,

including employees’ health and safety,

the common defense and security, and

the environment.1 This statement of

general policy and procedure will be

published as NUREG–1600 to provide

widespread dissemination of the

Commission’s Enforcement Policy.

However, this is a policy statement and

not a regulation. The Commission may

deviate from this statement of policy

and procedure as appropriate under the

circumstances of a particular case.

I. Introduction and Purpose

The purpose of the NRC enforcement

program is to support the NRC’s overall

safety mission in protecting the public

and the environment. Consistent with

that purpose, enforcement action should

be used:

• As a deterrent to emphasize the

importance of compliance with

requirements, and

• To encourage prompt identification

and prompt, comprehensive correction

of violations.

Consistent with the purpose of this

program, prompt and vigorous

enforcement action will be taken when

dealing with licensees, contractors,2 and

their employees, who do not achieve the

necessary meticulous attention to detail

and the high standard of compliance

which the NRC expects.3 Each

enforcement action is dependent on the

circumstances of the case and requires

the exercise of discretion after

consideration of this enforcement

policy. In no case, however, will

licensees who cannot achieve and

maintain adequate levels of safety be

permitted to conduct licensed activities.

For purposes of this policy statement,

safety means avoiding undue risk, i.e.,

providing reasonable assurance of

adequate protection for the public in

connection with the use of source,

byproduct and special nuclear

materials. Compliance means meeting

regulatory requirements. Appendix A to

this policy statement describes the

nexus between safety and compliance.

II. Statutory Authority and Procedural

Framework

A. Statutory Authority

The NRC’s enforcement jurisdiction is

drawn from the Atomic Energy Act of

1954, as amended, and the Energy

Reorganization Act (ERA) of 1974, as

amended.

Section 161 of the Atomic Energy Act

authorizes the NRC to conduct

inspections and investigations and to

issue orders as may be necessary or

desirable to promote the common

defense and security or to protect health

or to minimize danger to life or

property. Section 186 authorizes the

NRC to revoke licenses under certain

circumstances (e.g., for material false

statements, in response to conditions

that would have warranted refusal of a

license on an original application, for a

licensee’s failure to build or operate a

facility in accordance with the terms of

the permit or license, and for violation

of an NRC regulation). Section 234

authorizes the NRC to impose civil

penalties not to exceed $100,000 per

violation per day for the violation of

certain specified licensing provisions of

the Act, rules, orders, and license terms

implementing these provisions, and for

violations for which licenses can be

revoked. In addition to the enumerated

provisions in section 234, sections 84

and 147 authorize the imposition of

civil penalties for violations of

regulations implementing those

provisions. Section 232 authorizes the

NRC to seek injunctive or other

equitable relief for violation of

regulatory requirements.

Section 206 of the Energy

Reorganization Act authorizes the NRC

to impose civil penalties for knowing

and conscious failures to provide

certain safety information to the NRC.

Notwithstanding the $100,000 limit

stated in the Atomic Energy Act, the

Commission may impose higher civil

penalties as provided by the Debt

Collection Improvement Act of 1996.

Under the Act, the Commission is

required to modify civil monetary

penalties to reflect inflation. The

adjusted maximum civil penalty amount

is reflected in 10 CFR 2.205 and this

Policy Statement.

Chapter 18 of the Atomic Energy Act

provides for varying levels of criminal

penalties (i.e., monetary fines and

imprisonment) for willful violations of

the Act and regulations or orders issued

under sections 65, 161(b), 161(i), or

161(o) of the Act. Section 223 provides

that criminal penalties may be imposed

on certain individuals employed by

firms constructing or supplying basic

components of any utilization facility if

the individual knowingly and willfully

violates NRC requirements such that a

basic component could be significantly

impaired. Section 235 provides that

criminal penalties may be imposed on

persons who interfere with inspectors.

Section 236 provides that criminal

penalties may be imposed on persons

who attempt to or cause sabotage at a

nuclear facility or to nuclear fuel.

Alleged or suspected criminal violations

of the Atomic Energy Act are referred to

the Department of Justice for

appropriate action.

B. Procedural Framework

Subpart B of 10 CFR Part 2 of NRC’s

regulations sets forth the procedures the

NRC uses in exercising its enforcement

authority. 10 CFR 2.201 sets forth the

procedures for issuing notices of

violation.

The procedure to be used in assessing

civil penalties is set forth in 10 CFR

2.205. This regulation provides that the

civil penalty process is initiated by

issuing a Notice of Violation and

Proposed Imposition of a Civil Penalty.

The licensee or other person is provided

an opportunity to contest in writing the

proposed imposition of a civil penalty.

After evaluation of the response, the

civil penalty may be mitigated, remitted,

or imposed. An opportunity is provided

for a hearing if a civil penalty is

imposed. If a civil penalty is not paid

following a hearing or if a hearing is not

requested, the matter may be referred to

the U.S. Department of Justice to

institute a civil action in District Court.

The procedure for issuing an order to

institute a proceeding to modify,

suspend, or revoke a license or to take

other action against a licensee or other

person subject to the jurisdiction of the

Commission is set forth in 10 CFR

2.202. The licensee or any other person

adversely affected by the order may

request a hearing. The NRC is

authorized to make orders immediately

effective if required to protect the public

health, safety, or interest, or if the

violation is willful. Section 2.204 sets

out the procedures for issuing a Demand

for Information (Demand) to a licensee

or other person subject to the

Commission’s jurisdiction for the

purpose of determining whether an

order or other enforcement action

should be issued. The Demand does not
26634 Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices

4The term ‘‘escalated enforcement action’’ as

used in this policy means a Notice of Violation or

civil penalty for any Severity Level I, II, or III

violation (or problem) or any order based upon a

violation.

5The term ‘‘requirement’’ as used in this policy

means a legally binding requirement such as a

statute, regulation, license condition, technical

specification, or order.

provide hearing rights, as only

information is being sought. A licensee

must answer a Demand. An unlicensed

person may answer a Demand by either

providing the requested information or

explaining why the Demand should not

have been issued.

III. Responsibilities

The Executive Director for Operations

(EDO) and the principal enforcement

officer of the NRC, the Deputy Executive

Director for Regulatory Effectiveness,

hereafter referred to as the Deputy

Executive Director, has been delegated

the authority to approve or issue all

escalated enforcement actions.4 The

Deputy Executive Director is

responsible to the EDO for the NRC

enforcement program. The Office of

Enforcement (OE) exercises oversight of

and implements the NRC enforcement

program. The Director, OE, acts for the

Deputy Executive Director in

enforcement matters in his absence or as

delegated.

Subject to the oversight and direction

of OE, and with the approval of the

Deputy Executive Director, where

necessary, the regional offices normally

issue Notices of Violation and proposed

civil penalties. However, subject to the

same oversight as the regional offices,

the Office of Nuclear Reactor Regulation

(NRR) and the Office of Nuclear

Material Safety and Safeguards (NMSS)

may also issue Notices of Violation and

proposed civil penalties for certain

activities. Enforcement orders are

normally issued by the Deputy

Executive Director or the Director, OE.

However, orders may also be issued by

the EDO, especially those involving the

more significant matters. The Directors

of NRR and NMSS have also been

delegated authority to issue orders, but

it is expected that normal use of this

authority by NRR and NMSS will be

confined to actions not associated with

compliance issues. The Chief Financial

Officer has been delegated the authority

to issue orders where licensees violate

Commission regulations by nonpayment

of license and inspection fees.

In recognition that the regulation of

nuclear activities in many cases does

not lend itself to a mechanistic

treatment, judgment and discretion

must be exercised in determining the

severity levels of the violations and the

appropriate enforcement sanctions,

including the decision to issue a Notice

of Violation, or to propose or impose a

civil penalty and the amount of this

penalty, after considering the general

principles of this statement of policy

and the technical and regulatory

significance of the violations and the

surrounding circumstances.

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.

The Commission is also to be provided

notification (where appropriate, based

on the uniqueness or significance of the

issue) for a plant meeting the criteria of

Section VII.B.6. In addition, the

Commission will be consulted prior to

taking action in the following situations

(unless the urgency of the situation

dictates immediate action):

(1) An action affecting a licensee’s

operation that requires balancing the

public health and safety or common

defense and security implications of not

operating with the potential radiological

or other hazards associated with

continued operation;

(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;

(3) Any proposed enforcement action

that involves a Severity Level I

violation;

(4) Any action the EDO believes

warrants Commission involvement;

(5) Any proposed enforcement case

involving an Office of Investigations

(OI) report where the NRC staff (other

than the OI staff) does not arrive at the

same conclusions as those in the OI

report concerning issues of intent if the

Director of OI concludes that

Commission consultation is warranted;

and

(6) Any proposed enforcement action

on which the Commission asks to be

consulted.

IV. Severity of Violations

Regulatory requirements 5 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 the

regulatory significance. In evaluating

the technical significance, risk is an

appropriate consideration.

Consequently, for purposes of formal

enforcement action, violations are

normally categorized in terms of four

levels of severity to show their relative

importance within each of the following

eight activity areas:

I. Reactor Operations;

II. Facility Construction;

III. Safeguards;

IV. Health Physics;

V. Transportation;

VI. Fuel Cycle and Materials Operations;

VII. Miscellaneous Matters; and

VIII. Emergency Preparedness.

Licensed activities will be placed in

the activity area most suitable in light of

the particular violation involved

including activities not directly covered

by one of the above listed areas, e.g.,

export license activities. Within each

activity area, Severity Level I has been

assigned to violations that are the most

significant and Severity Level IV

violations are the least significant.

Severity Level I and II violations are of

very significant regulatory concern. In

general, violations that are included in

these severity categories involve actual

or high potential impact on the public.

Severity Level III violations are cause

for significant regulatory concern.

Severity Level IV violations are less

serious but are of more than minor

concern; i.e., if left uncorrected, they

could lead to a more serious concern.

The Commission recognizes that there

are other violations of minor safety or

environmental concern which are below

the level of significance of Severity

Level IV violations. These minor

violations are not the subject of formal

enforcement action and are not usually

described in inspection reports. To the

extent such violations are described,

they will be noted as violations of minor

significance that are not subject to

formal enforcement action.

Comparisons of significance between

activity areas are inappropriate. For

example, the immediacy of any hazard

to the public associated with Severity

Level I violations in Reactor Operations

is not directly comparable to that

associated with Severity Level I

violations in Facility Construction.

Supplements I through VIII provide

examples and serve as guidance in

determining the appropriate severity

level for violations in each of the eight

activity areas. However, the examples
Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices 26635

6The term ‘‘repetitive violation’’ or ‘‘similar

violation’’ as used in this policy statement means

a violation that reasonably could have been

prevented by a licensee’s corrective action for a

previous violation normally occurring (1) within

the past 2 years of the inspection at issue, or (2) the

period within the last two inspections, whichever

is longer.

7The term ‘‘licensee official’’ as used in this

policy statement means a first-line supervisor or

above, a licensed individual, a radiation safety

officer, or an authorized user of licensed material

whether or not listed on a license. Notwithstanding

an individual’s job title, severity level

categorization for willful acts involving individuals

who can be considered licensee officials will

consider several factors, including the position of

the individual relative to the licensee’s

organizational structure and the individual’s

responsibilities relative to the oversight of licensed

activities and to the use of licensed material.

are neither exhaustive nor controlling.

In addition, these examples do not

create new requirements. Each is

designed to illustrate the significance

that the NRC places on a particular type

of violation of NRC requirements. Each

of the examples in the supplements is

predicated on a violation of a regulatory

requirement.

The NRC reviews each case being

considered for enforcement action on its

own merits to ensure that the severity of

a violation is characterized at the level

best suited to the significance of the

particular violation. In some cases,

special circumstances may warrant an

adjustment to the severity level

categorization.

A. Aggregation of Violations

A group of Severity Level IV

violations may be evaluated in the

aggregate and assigned a single,

increased severity level, thereby

resulting in a Severity Level III problem,

if the violations have the same

underlying cause or programmatic

deficiencies, or the violations

contributed to or were unavoidable

consequences of the underlying

problem. Normally, Severity Level II

and III violations are not aggregated into

a higher severity level.

The purpose of aggregating violations

is to focus the licensee’s attention on the

fundamental underlying causes for

which enforcement action appears

warranted and to reflect the fact that

several violations with a common cause

may be more significant collectively

than individually and may, therefore,

warrant a more substantial enforcement

action.

B. Repetitive Violations

The severity level of a Severity Level

IV violation may be increased to

Severity Level III, if the violation can be

considered a repetitive violation. 6 The

purpose of escalating the severity level

of a repetitive violation is to

acknowledge the added significance of

the situation based on the licensee’s

failure to implement effective corrective

action for the previous violation. The

decision to escalate the severity level of

a repetitive violation will depend on the

circumstances, such as, but not limited

to, the number of times the violation has

occurred, the similarity of the violations

and their root causes, the adequacy of

previous corrective actions, the period

of time between the violations, and the

significance of the violations.

C. Willful Violations

Willful violations are by definition of

particular concern to the Commission

because its regulatory program is based

on licensees and their contractors,

employees, and agents acting with

integrity and communicating with

candor. Willful violations cannot be

tolerated by either the Commission or a

licensee. Licensees are expected to take

significant remedial action in

responding to willful violations

commensurate with the circumstances

such that it demonstrates the

seriousness of the violation thereby

creating a deterrent effect within the

licensee’s organization. Although

removal of the person is not necessarily

required, substantial disciplinary action

is expected.

Therefore, the severity level of a

violation may be increased if the

circumstances surrounding the matter

involve careless disregard of

requirements, deception, or other

indications of willfulness. The term

‘‘willfulness’’ as used in this policy

embraces a spectrum of violations

ranging from deliberate intent to violate

or falsify to and including careless

disregard for requirements. Willfulness

does not include acts which do not rise

to the level of careless disregard, e.g.,

inadvertent clerical errors in a

document submitted to the NRC. In

determining the specific severity level

of a violation involving willfulness,

consideration will be given to such

factors as the position and

responsibilities of the person involved

in the violation (e.g., licensee official 7

or non-supervisory employee), the

significance of any underlying violation,

the intent of the violator (i.e., careless

disregard or deliberateness), and the

economic or other advantage, if any,

gained as a result of the violation. The

relative weight given to each of these

factors in arriving at the appropriate

severity level will be dependent on the

circumstances of the violation.

However, if a licensee refuses to correct

a minor violation within a reasonable

time such that it willfully continues, the

violation should be categorized at least

at a Severity Level IV.

D. Violations of Reporting Requirements

The NRC expects licensees to provide

complete, accurate, and timely

information and reports. Accordingly,

unless otherwise categorized in the

Supplements, the severity level of a

violation involving the failure to make

a required report to the NRC will be

based upon the significance of and the

circumstances surrounding the matter

that should have been reported.

However, the severity level of an

untimely report, in contrast to no report,

may be reduced depending on the

circumstances surrounding the matter.

A licensee will not normally be cited for

a failure to report a condition or event

unless the licensee was actually aware

of the condition or event that it failed

to report. A licensee will, on the other

hand, normally be cited for a failure to

report a condition or event if the

licensee knew of the information to be

reported, but did not recognize that it

was required to make a report.

V. Predecisional Enforcement

Conferences

Whenever the NRC has learned of the

existence of a potential violation for

which escalated enforcement action

appears to be warranted, or recurring

nonconformance on the part of a

contractor, the NRC may provide an

opportunity for a predecisional

enforcement conference with the

licensee, contractor, or other person

before taking enforcement action. The

purpose of the conference is to obtain

information that will assist the NRC in

determining the appropriate

enforcement action, such as: (1) A

common understanding of facts, root

causes and missed opportunities

associated with the apparent violations,

(2) a common understanding of

corrective actions taken or planned, and

(3) a common understanding of the

significance of issues and the need for

lasting comprehensive corrective action.

If the NRC concludes that it has

sufficient information to make an

informed enforcement decision, a

conference will not normally be held.

However, an opportunity for a

conference will normally be provided

before issuing an order based on a

violation of the rule on Deliberate

Misconduct or a civil penalty to an

unlicensed person. If a conference is not

held, the licensee may be requested to

provide a written response to an

inspection report, if issued, as to the

licensee’s views on the apparent

violations and their root causes and a
26636 Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices

description of planned or implemented

corrective actions. However, if the NRC

has sufficient information to conclude

that a civil penalty is not warranted, it

may proceed to issue an enforcement

action without first obtaining the

licensee’s response to the inspection

report.

During the predecisional enforcement

conference, the licensee, contractor, or

other persons will be given an

opportunity to provide information

consistent with the purpose of the

conference, including an explanation to

the NRC of the immediate corrective

actions (if any) that were taken

following identification of the potential

violation or nonconformance and the

long-term comprehensive actions that

were taken or will be taken to prevent

recurrence. Licensees, contractors, or

other persons will be told when a

meeting is a predecisional enforcement

conference.

A predecisional enforcement

conference is a meeting between the

NRC and the licensee. Conferences are

normally held in the regional offices

and are normally open to public

observation. Conferences will not

normally be open to the public if the

enforcement action being contemplated:

(1) Would be taken against an

individual, or if the action, though not

taken against an individual, turns on

whether an individual has committed

wrongdoing;

(2) Involves significant personnel

failures where the NRC has requested

that the individual(s) involved be

present at the conference;

(3) Is based on the findings of an NRC

Office of Investigations report that has

not been publicly disclosed; or

(4) Involves safeguards information,

Privacy Act information, or information

which could be considered proprietary;

In addition, conferences will not

normally be open to the public if:

(5) The conference involves medical

misadministrations or overexposures

and the conference cannot be conducted

without disclosing the exposed

individual’s name; or

(6) The conference will be conducted

by telephone or the conference will be

conducted at a relatively small

licensee’s facility.

Notwithstanding meeting any of these

criteria, a conference may still be open

if the conference involves issues related

to an ongoing adjudicatory proceeding

with one or more intervenors or where

the evidentiary basis for the conference

is a matter of public record, such as an

adjudicatory decision by the

Department of Labor. In addition,

notwithstanding the above normal

criteria for opening or closing

conferences, with the approval of the

Executive Director for Operations,

conferences may either be open or

closed to the public after balancing the

benefit of the public’s observation

against the potential impact on the

agency’s decision-making process in a

particular case.

The NRC will notify the licensee that

the conference will be open to public

observation. Consistent with the

agency’s policy on open meetings, ‘‘Staff

Meetings Open to Public,’’ published

September 20, 1994 (59 FR 48340), the

NRC intends to announce open

conferences normally at least 10

working days in advance of conferences

through (1) notices posted in the Public

Document Room, (2) a toll-free

telephone recording at 800–952–9674,

(3) a toll-free electronic bulletin board at

800–952–9676, and on the World Wide

Web at the NRC Office of Enforcement

homepage (www.nrc.gov/OE). In

addition, the NRC will also issue a press

release and notify appropriate State

liaison officers that a predecisional

enforcement conference has been

scheduled and that it is open to public

observation.

The public attending open

conferences may observe but may not

participate in the conference. It is noted

that the purpose of conducting open

conferences is not to maximize public

attendance, but rather to provide the

public with opportunities to be

informed of NRC activities consistent

with the NRC’s ability to exercise its

regulatory and safety responsibilities.

Therefore, members of the public will

be allowed access to the NRC regional

offices to attend open enforcement

conferences in accordance with the

‘‘Standard Operating Procedures For

Providing Security Support For NRC

Hearings and Meetings,’’ published

November 1, 1991 (56 FR 56251). These

procedures provide that visitors may be

subject to personnel screening, that

signs, banners, posters, etc., not larger

than 18′′ be permitted, and that

disruptive persons may be removed.

The open conference will be terminated

if disruption interferes with a successful

conference. NRC’s Predecisional

Enforcement Conferences (whether open

or closed) normally will be held at the

NRC’s regional offices or in NRC

Headquarters Offices and not in the

vicinity of the licensee’s facility.

For a case in which an NRC Office of

Investigations (OI) report finds that

discrimination as defined under 10 CFR

50.7 (or similar provisions in Parts 30,

40, 60, 70, or 72) has occurred, the OI

report may be made public, subject to

withholding certain information (i.e.,

after appropriate redaction), in which

case the associated predecisional

enforcement conference will normally

be open to public observation. In a

conference where a particular

individual is being considered

potentially responsible for the

discrimination, the conference will

remain closed. In either case (i.e.,

whether the conference is open or

closed), the employee or former

employee who was the subject of the

alleged discrimination (hereafter

referred to as ‘‘complainant’’) will

normally be provided an opportunity to

participate in the predecisional

enforcement conference with the

licensee/employer. This participation

will normally be in the form of a

complainant statement and comment on

the licensee’s presentation, followed in

turn by an opportunity for the licensee

to respond to the complainant’s

presentation. In cases where the

complainant is unable to attend in

person, arrangements will be made for

the complainant’s participation by

telephone or an opportunity given for

the complainant to submit a written

response to the licensee’s presentation.

If the licensee chooses to forego an

enforcement conference and, instead,

responds to the NRC’s findings in

writing, the complainant will be

provided the opportunity to submit

written comments on the licensee’s

response. For cases involving potential

discrimination by a contractor, any

associated predecisional enforcement

conference with the contractor would be

handled similarly. These arrangements

for complainant participation in the

predecisional enforcement conference

are not to be conducted or viewed in

any respect as an adjudicatory hearing.

The purpose of the complainant’s

participation is to provide information

to the NRC to assist it in its enforcement

deliberations.

A predecisional enforcement

conference may not need to be held in

cases where there is a full adjudicatory

record before the Department of Labor.

If a conference is held in such cases,

generally the conference will focus on

the licensee’s corrective action. As with

discrimination cases based on OI

investigations, the complainant may be

allowed to participate.

Members of the public attending open

conferences will be reminded that (1)

the apparent violations discussed at

predecisional enforcement conferences

are subject to further review and may be

subject to change prior to any resulting

enforcement action and (2) the

statements of views or expressions of

opinion made by NRC employees at

predecisional enforcement conferences,
Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices 26637

or the lack thereof, are not intended to

represent final determinations or beliefs.

When needed to protect the public

health and safety or common defense

and security, escalated enforcement

action, such as the issuance of an

immediately effective order, will be

taken before the conference. In these

cases, a conference may be held after the

escalated enforcement action is taken.

VI. Enforcement Actions

This section describes the

enforcement sanctions available to the

NRC and specifies the conditions under

which each may be used. The basic

enforcement sanctions are Notices of

Violation, civil penalties, and orders of

various types. As discussed further in

Section VI.D, related administrative

actions such as Notices of

Nonconformance, Notices of Deviation,

Confirmatory Action Letters, Letters of

Reprimand, and Demands for

Information are used to supplement the

enforcement program. In selecting the

enforcement sanctions or administrative

actions, the NRC will consider

enforcement actions taken by other

Federal or State regulatory bodies

having concurrent jurisdiction, such as

in transportation matters.

Usually, whenever a violation of NRC

requirements of more than a minor

concern is identified, enforcement

action is taken. The nature and extent of

the enforcement action is intended to

reflect the seriousness of the violation

involved. For the vast majority of

violations, a Notice of Violation or a

Notice of Nonconformance is the normal

action.

However, circumstances regarding the

violation findings may warrant

discretion being exercised such that the

NRC refrains from issuing a Notice of

Violation or other enforcement action.

(See Section VII.B, ‘‘Mitigation of

Enforcement Sanctions.’’)

A. Notice of Violation

A Notice of Violation is a written

notice setting forth one or more

violations of a legally binding

requirement. The Notice of Violation

normally requires the recipient to

provide a written statement describing

(1) the reasons for the violation or, if

contested, the basis for disputing the

violation; (2) corrective steps that have

been taken and the results achieved; (3)

corrective steps that will be taken to

prevent recurrence; and (4) the date

when full compliance will be achieved.

The NRC may waive all or portions of

a written response to the extent relevant

information has already been provided

to the NRC in writing or documented in

an NRC inspection report. The NRC may

require responses to Notices of Violation

to be under oath. Normally, responses

under oath will be required only in

connection with Severity Level I, II, or

III violations or orders.

The NRC uses the Notice of Violation

as the usual method for formalizing the

existence of a violation. Issuance of a

Notice of Violation is normally the only

enforcement action taken, except in

cases where the criteria for issuance of

civil penalties and orders, as set forth in

Sections VI.B and VI.C, respectively, are

met.

B. Civil Penalty

A civil penalty is a monetary penalty

that may be imposed for violation of (1)

certain specified licensing provisions of

the Atomic Energy Act or

supplementary NRC rules or orders; (2)

any requirement for which a license

may be revoked; or (3) reporting

requirements under section 206 of the

Energy Reorganization Act. Civil

penalties are designed to deter future

violations both by the involved licensee

as well as by other licensees conducting

similar activities and to emphasize the

need for licensees to identify violations

and take prompt comprehensive

corrective action.

Civil penalties are considered for

Severity Level III violations. In addition,

civil penalties will normally be assessed

for Severity Level I and II violations and

knowing and conscious violations of the

reporting requirements of section 206 of

the Energy Reorganization Act.

Civil penalties are used to encourage

prompt identification and prompt and

comprehensive correction of violations,

to emphasize compliance in a manner

that deters future violations, and to

serve to focus licensees’ attention on

violations of significant regulatory

concern.

Although management involvement,

direct or indirect, in a violation may

lead to an increase in the civil penalty,

the lack of management involvement

may not be used to mitigate a civil

penalty. Allowing mitigation in the

latter case could encourage the lack of

management involvement in licensed

activities and a decrease in protection of

the public health and safety.

1. Base Civil Penalty

The NRC imposes different levels of

penalties for different severity level

violations and different classes of

licensees, contractors, and other

persons. Tables 1A and 1B show the

base civil penalties for various reactor,

fuel cycle, and materials programs.

(Civil penalties issued to individuals are

determined on a case-by-case basis.) The

structure of these tables generally takes

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 licensee

employees receive higher civil

penalties. Regarding the secondary

factor of ability of various classes of

licensees to pay the civil penalties, it is

not the NRC’s intention that the

economic impact of a civil penalty be so

severe that it puts a licensee out of

business (orders, rather than civil

penalties, are used when the intent is to

suspend or terminate licensed activities)

or adversely affects a licensee’s ability

to safely conduct licensed activities.

The deterrent effect of civil penalties is

best served when the amounts of the

penalties take into account a licensee’s

ability to pay. In determining the

amount of civil penalties for licensees

for whom the tables do not reflect the

ability to pay or the gravity of the

violation, the NRC will consider as

necessary an increase or decrease on a

case-by-case basis. Normally, if a

licensee can demonstrate financial

hardship, the NRC will consider

payments over time, including interest,

rather than reducing the amount of the

civil penalty. However, where a licensee

claims financial hardship, the licensee

will normally be required to address

why it has sufficient resources to safely

conduct licensed activities and pay

license and inspection fees.

2. Civil Penalty Assessment

In an effort to (1) emphasize the

importance of adherence to

requirements and (2) reinforce prompt

self-identification of problems and root

causes and prompt and comprehensive

correction of violations, the NRC

reviews each proposed civil penalty on

its own merits and, after considering all

relevant circumstances, may adjust the

base civil penalties shown in Table 1A

and 1B for Severity Level I, II, and III

violations as described below.

The civil penalty assessment process

considers four decisional points: (a)

Whether the licensee has had any

previous escalated enforcement action

(regardless of the activity area) during

the past 2 years or past 2 inspections,

whichever is longer; (b) whether the

licensee should be given credit for

actions related to identification; (c)

whether the licensee’s corrective actions

are prompt and comprehensive; and (d)

whether, in view of all the

circumstances, the matter in question

requires the exercise of discretion.

Although each of these decisional

points may have several associated
26638 Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices

8An ‘‘event,’’ as used here, means (1) an event

characterized by an active adverse impact on

equipment or personnel, readily obvious by human

observation or instrumentation, or (2) a radiological

impact on personnel or the environment in excess

of regulatory limits, such as an overexposure, a

release of radioactive material above NRC limits, or

a loss of radioactive material. For example, an

equipment failure discovered through a spill of

liquid, a loud noise, the failure to have a system

considerations for any given case, the

outcome of the assessment process for

each violation or problem, absent the

exercise of discretion, is limited to one

of the following three results: no civil

penalty, a base civil penalty, or a base

civil penalty escalated by 100%. The

flow chart presented below is a graphic

representation of the civil penalty

assessment process.

BILLING CODE 7590–01–P

BILLING CODE 7590–01–C

a. Initial Escalated Action. When the

NRC determines that a non-willful

Severity Level III violation or problem

has occurred, and the licensee has not

had any previous escalated actions

(regardless of the activity area) during

the past 2 years or 2 inspections,

whichever is longer, the NRC will

consider whether the licensee’s

corrective action for the present

violation or problem is reasonably

prompt and comprehensive (see the

discussion under Section VI.B.2.c,

below). Using 2 years as the basis for

assessment is expected to cover most

situations, but considering a slightly

longer or shorter period might be

warranted based on the circumstances

of a particular case. The starting point

of this period should be considered the

date when the licensee was put on

notice of the need to take corrective

action. For a licensee-identified

violation or an event, this would be

when the licensee is aware that a

problem or violation exists requiring

corrective action. For an NRC-identified

violation, the starting point would be

when the NRC puts the licensee on

notice, which could be during the

inspection, at the inspection exit

meeting, or as part of post-inspection

communication.

If the corrective action is judged to be

prompt and comprehensive, a Notice of

Violation normally should be issued

with no associated civil penalty. If the

corrective action is judged to be less

than prompt and comprehensive, the

Notice of Violation normally should be

issued with a base civil penalty.

b. Credit for Actions Related to

Identification. (1) If a Severity Level I or

II violation or a willful Severity Level III

violation has occurred—or if, during the

past 2 years or 2 inspections, whichever

is longer, the licensee has been issued

at least one other escalated action—the

civil penalty assessment should

normally consider the factor of

identification in addition to corrective

action (see the discussion under Section

VI.B.2.c, below). As to identification,

the NRC should consider whether the

licensee should be given credit for

actions related to identification.

In each case, the decision should be

focused on identification of the problem

requiring corrective action. In other

words, although giving credit for

Identification and Corrective Action

should be separate decisions, the

concept of Identification presumes that

the identifier recognizes the existence of

a problem, and understands that

corrective action is needed. The

decision on Identification requires

considering all the circumstances of

identification including:

(i) Whether the problem requiring

corrective action was NRC-identified,

licensee-identified, or revealed through

an event 8;
Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices 26639

respond properly, or an annunciator alarm would

be considered an event; a system discovered to be

inoperable through a document review would not.

Similarly, if a licensee discovered, through

quarterly dosimetry readings, that employees had

been inadequately monitored for radiation, the

issue would normally be considered licenseeidentified; however, if the same dosimetry readings

disclosed an overexposure, the issue would be

considered an event.

(ii) Whether prior opportunities

existed to identify the problem requiring

corrective action, and if so, the age and

number of those opportunities;

(iii) Whether the problem was

revealed as the result of a licensee selfmonitoring effort, such as conducting an

audit, a test, a surveillance, a design

review, or troubleshooting;

(iv) For a problem revealed through

an event, the ease of discovery, and the

degree of licensee initiative in

identifying the root cause of the

problem and any associated violations;

(v) For NRC-identified issues, whether

the licensee would likely have

identified the issue in the same timeperiod if the NRC had not been

involved;

(vi) For NRC-identified issues,

whether the licensee should have

identified the issue (and taken action)

earlier; and

(vii) For cases in which the NRC

identifies the overall problem requiring

corrective action (e.g., a programmatic

issue), the degree of licensee initiative

or lack of initiative in identifying the

problem or problems requiring

corrective action.

(2) Although some cases may consider

all of the above factors, the importance

of each factor will vary based on the

type of case as discussed in the

following general guidance:

(i) Licensee-Identified. When a

problem requiring corrective action is

licensee-identified (i.e., identified

before the problem has resulted in an

event), the NRC should normally give

the licensee credit for actions related to

identification, regardless of whether

prior opportunities existed to identify

the problem.

(ii) Identified Through an Event.

When a problem requiring corrective

action is identified through an event,

the decision on whether to give the

licensee credit for actions related to

identification normally should consider

the ease of discovery, whether the event

occurred as the result of a licensee selfmonitoring effort (i.e., whether the

licensee was ‘‘looking for the problem’’),

the degree of licensee initiative in

identifying the problem or problems

requiring corrective action, and whether

prior opportunities existed to identify

the problem.

Any of these considerations may be

overriding if particularly noteworthy or

particularly egregious. For example, if

the event occurred as the result of

conducting a surveillance or similar

self-monitoring effort (i.e., the licensee

was looking for the problem), the

licensee should normally be given credit

for identification. As a second instance,

even if the problem was easily

discovered (e.g., revealed by a large spill

of liquid), the NRC may choose to give

credit because noteworthy licensee

effort was exerted in ferreting out the

root cause and associated violations, or

simply because no prior opportunities

(e.g., procedural cautions, postmaintenance testing, quality control

failures, readily observable parameter

trends, or repeated or locked-in

annunciator warnings) existed to

identify the problem.

(iii) NRC-Identified. When a problem

requiring corrective action is NRCidentified, the decision on whether to

give the licensee credit for actions

related to Identification should

normally be based on an additional

question: should the licensee have

reasonably identified the problem (and

taken action) earlier?

In most cases, this reasoning may be

based simply on the ease of the NRC

inspector’s discovery (e.g., conducting a

walkdown, observing in the control

room, performing a confirmatory NRC

radiation survey, hearing a cavitating

pump, or finding a valve obviously out

of position). In some cases, the

licensee’s missed opportunities to

identify the problem might include a

similar previous violation, NRC or

industry notices, internal audits, or

readily observable trends.

If the NRC identifies the violation but

concludes that, under the

circumstances, the licensee’s actions

related to Identification were not

unreasonable, the matter would be

treated as licensee-identified for

purposes of assessing the civil penalty.

In such cases, the question of

Identification credit shifts to whether

the licensee should be penalized for

NRC’s identification of the problem.

(iv) Mixed Identification. For ‘‘mixed’’

identification situations (i.e., where

multiple violations exist, some NRCidentified, some licensee-identified, or

where the NRC prompted the licensee to

take action that resulted in the

identification of the violation), the

NRC’s evaluation should normally

determine whether the licensee could

reasonably have been expected to

identify the violation in the NRC’s

absence. This determination should

consider, among other things, the timing

of the NRC’s discovery, the information

available to the licensee that caused the

NRC concern, the specificity of the

NRC’s concern, the scope of the

licensee’s efforts, the level of licensee

resources given to the investigation, and

whether the NRC’s path of analysis had

been dismissed or was being pursued in

parallel by the licensee.

In some cases, the licensee may have

addressed the isolated symptoms of

each violation (and may have identified

the violations), but failed to recognize

the common root cause and taken the

necessary comprehensive action. Where

this is true, the decision on whether to

give licensee credit for actions related to

Identification should focus on

identification of the problem requiring

corrective action (e.g., the programmatic

breakdown). As such, depending on the

chronology of the various violations, the

earliest of the individual violations

might be considered missed

opportunities for the licensee to have

identified the larger problem.

(v) Missed Opportunities to Identify.

Missed opportunities include prior

notifications or missed opportunities to

identify or prevent violations such as (1)

through normal surveillances, audits, or

quality assurance (QA) activities; (2)

through prior notice, i.e., specific NRC

or industry notification; or (3) through

other reasonable indication of a

potential problem or violation, such as

observations of employees and

contractors, and failure to take effective

corrective steps. It may include findings

of the NRC, the licensee, or industry

made at other facilities operated by the

licensee where it is reasonable to expect

the licensee to take action to identify or

prevent similar problems at the facility

subject to the enforcement action at

issue. In assessing this factor,

consideration will be given to, among

other things, the opportunities available

to discover the violation, the ease of

discovery, the similarity between the

violation and the notification, the

period of time between when the

violation occurred and when the

notification was issued, the action taken

(or planned) by the licensee in response

to the notification, and the level of

management review that the notification

received (or should have received).

The evaluation of missed

opportunities should normally depend

on whether the information available to

the licensee should reasonably have

caused action that would have

prevented the violation. Missed

opportunities is normally not applied

where the licensee appropriately

reviewed the opportunity for

application to its activities and

reasonable action was either taken or
26640 Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices

planned to be taken within a reasonable

time.

In some situations the missed

opportunity is a violation in itself. In

these cases, unless the missed

opportunity is a Severity Level III

violation in itself, the missed

opportunity violation may be grouped

with the other violations into a single

Severity Level III ‘‘problem.’’ However,

if the missed opportunity is the only

violation, then it should not normally be

counted twice (i.e., both as the violation

and as a missed opportunity—’’double

counting’’) unless the number of

opportunities missed was particularly

significant.

The timing of the missed opportunity

should also be considered. While a rigid

time-frame is unnecessary, a 2-year

period should generally be considered

for consistency in implementation, as

the period reflecting relatively current

performance.

(3) When the NRC determines that the

licensee should receive credit for

actions related to Identification the civil

penalty assessment should normally

result in either no civil penalty or a base

civil penalty, based on whether

Corrective Action is judged to be

reasonably prompt and comprehensive.

When the licensee is not given credit for

actions related to Identification the civil

penalty assessment should normally

result in a Notice of Violation with

either a base civil penalty or a base civil

penalty escalated by 100%, depending

on the quality of Corrective Action,

because the licensee’s performance is

clearly not acceptable.

c. Credit for Prompt and

Comprehensive Corrective Action. The

purpose of the Corrective Action factor

is to encourage licensees to (1) take the

immediate actions necessary upon

discovery of a violation that will restore

safety and compliance with the license,

regulation(s), or other requirement(s);

and (2) develop and implement (in a

timely manner) the lasting actions that

will not only prevent recurrence of the

violation at issue, but will be

appropriately comprehensive, given the

significance and complexity of the

violation, to prevent occurrence of

violations with similar root causes.

Regardless of other circumstances

(e.g., past enforcement history,

identification), the licensee’s corrective

actions should always be evaluated as

part of the civil penalty assessment

process. As a reflection of the

importance given to this factor, an NRC

judgment that the licensee’s corrective

action has not been prompt and

comprehensive will always result in

issuing at least a base civil penalty.

In assessing this factor, consideration

will be given to the timeliness of the

corrective action (including the

promptness in developing the schedule

for long term corrective action), the

adequacy of the licensee’s root cause

analysis for the violation, and, given the

significance and complexity of the

issue, the comprehensiveness of the

corrective action (i.e., whether the

action is focused narrowly to the

specific violation or broadly to the

general area of concern). Even in cases

when the NRC, at the time of the

enforcement conference, identifies

additional peripheral or minor

corrective action still to be taken, the

licensee may be given credit in this area,

as long as the licensee’s actions

addressed the underlying root cause and

are considered sufficient to prevent

recurrence of the violation and similar

violations.

Normally, the judgment of the

adequacy of corrective actions will

hinge on whether the NRC had to take

action to focus the licensee’s evaluative

and corrective process in order to obtain

comprehensive corrective action. This

will normally be judged at the time of

the predecisional enforcement

conference (e.g., by outlining

substantive additional areas where

corrective action is needed). Earlier

informal discussions between the

licensee and NRC inspectors or

management may result in improved

corrective action, but should not

normally be a basis to deny credit for

Corrective Action. For cases in which

the licensee does not get credit for

actions related to Identification because

the NRC identified the problem, the

assessment of the licensee’s corrective

action should begin from the time when

the NRC put the licensee on notice of

the problem. Notwithstanding eventual

good comprehensive corrective action, if

immediate corrective action was not

taken to restore safety and compliance

once the violation was identified,

corrective action would not be

considered prompt and comprehensive.

Corrective action for violations

involving discrimination should

normally only be considered

comprehensive if the licensee takes

prompt, comprehensive corrective

action that (1) addresses the broader

environment for raising safety concerns

in the workplace, and (2) provides a

remedy for the particular discrimination

at issue.

In response to violations of 10 CFR

50.59, corrective action should normally

be considered prompt and

comprehensive only if the licensee:

(i) Makes a prompt decision on

operability; and either

(ii) Makes a prompt evaluation under

10 CFR 50.59 if the licensee intends to

maintain the facility or procedure in the

as found condition; or

(iii) Promptly initiates corrective

action consistent with Criterion XVI of

10 CFR 50, Appendix B, if it intends to

restore the facility or procedure to the

FSAR description.

d. Exercise of Discretion. As provided

in Section VII, ‘‘Exercise of Discretion,’’

discretion may be exercised by either

escalating or mitigating the amount of

the civil penalty determined after

applying the civil penalty adjustment

factors to ensure that the proposed civil

penalty reflects the NRC’s concern

regarding the violation at issue and that

it conveys the appropriate message to

the licensee. However, in no instance

will a civil penalty for any one violation

exceed $110,000 per day.

TABLE 1A—BASE CIVIL PENALTIES

a. Power reactors and gaseous

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

b. Fuel fabricators, industrial processors,1 and independent spent

fuel and monitored retrievable

storage installations........................ ................... 27,500

c. Test reactors, mills and uranium conversion facilities, contractors, waste disposal licensees, industrial radiographers,

and other large material

users........................................ .. 11,000

d. Research reactors, academic,

medical, or other small material

users2............................ ............ 5,500

1 Large firms engaged in manufacturing or

distribution of byproduct, source, or special

nuclear material. 2This applies to nonprofit institutions not

otherwise categorized in this table, mobile nuclear services, nuclear pharmacies, and physician offices.

TABLE 1B—BASE CIVIL PENALTIES

[In percent]

Severity level

Base civil

penalty

amount 1

I ....................................... ............. 100

II ....................................... ............ 80

III ...................................... ............ 50

1Percent of amount listed in Table 1A.

C. Orders

An order is a written NRC directive to

modify, suspend, or revoke a license; to

cease and desist from a given practice or

activity; or to take such other action as

may be proper (see 10 CFR 2.202).

Orders may also be issued in lieu of, or

in addition to, civil penalties, as

appropriate for Severity Level I, II, or III
Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices 26641

violations. Orders may be issued as

follows:

1. License Modification orders are

issued when some change in licensee

equipment, procedures, personnel, or

management controls is necessary.

2. Suspension Orders may be used:

(a) To remove a threat to the public

health and safety, common defense and

security, or the environment;

(b) To stop facility construction when,

(i) Further work could preclude or

significantly hinder the identification or

correction of an improperly constructed

safety-related system or component; or

(ii) The licensee’s quality assurance

program implementation is not adequate

to provide confidence that construction

activities are being properly carried out;

(c) When the licensee has not

responded adequately to other

enforcement action;

(d) When the licensee interferes with

the conduct of an inspection or

investigation; or

(e) For any reason not mentioned

above for which license revocation is

legally authorized.

Suspensions may apply to all or part

of the licensed activity. Ordinarily, a

licensed activity is not suspended (nor

is a suspension prolonged) for failure to

comply with requirements where such

failure is not willful and adequate

corrective action has been taken.

3. Revocation Orders may be used:

(a) When a licensee is unable or

unwilling to comply with NRC

requirements;

(b) When a licensee refuses to correct

a violation;

(c) When licensee does not respond to

a Notice of Violation where a response

was required;

(d) When a licensee refuses to pay an

applicable fee under the Commission’s

regulations; or

(e) For any other reason for which

revocation is authorized under section

186 of the Atomic Energy Act (e.g., any

condition which would warrant refusal

of a license on an original application).

4. Cease and Desist Orders may be

used to stop an unauthorized activity

that has continued after notification by

the NRC that the activity is

unauthorized.

5. Orders to non-licensees, including

contractors and subcontractors, holders

of NRC approvals, e.g., certificates of

compliance, early site permits, standard

design certificates, or applicants for any

of them, and to employees of any of the

foregoing, are used when the NRC has

identified deliberate misconduct that

may cause a licensee to be in violation

of an NRC requirement or where

incomplete or inaccurate information is

deliberately submitted or where the

NRC loses its reasonable assurance that

the licensee will meet NRC

requirements with that person involved

in licensed activities.

Unless a separate response is

warranted pursuant to 10 CFR 2.201, a

Notice of Violation need not be issued

where an order is based on violations

described in the order. The violations

described in an order need not be

categorized by severity level.

Orders are made effective

immediately, without prior opportunity

for hearing, whenever it is determined

that the public health, interest, or safety

so requires, or when the order is

responding to a violation involving

willfulness. Otherwise, a prior

opportunity for a hearing on the order

is afforded. For cases in which the NRC

believes a basis could reasonably exist

for not taking the action as proposed,

the licensee will ordinarily be afforded

an opportunity to show why the order

should not be issued in the proposed

manner by way of a Demand for

Information. (See 10 CFR 2.204)

D. Related Administrative Actions. In

addition to the formal enforcement

actions, Notices of Violation, civil

penalties, and orders, the NRC also uses

administrative actions, such as Notices

of Deviation, Notices of

Nonconformance, Confirmatory Action

Letters, Letters of Reprimand, and

Demands for Information to supplement

its enforcement program. The NRC

expects licensees and contractors to

adhere to any obligations and

commitments resulting from these

actions and will not hesitate to issue

appropriate orders to ensure that these

obligations and commitments are met.

1. Notices of Deviation are written

notices describing a licensee’s failure to

satisfy a commitment where the

commitment involved has not been

made a legally binding requirement. A

Notice of Deviation requests a licensee

to provide a written explanation or

statement describing corrective steps

taken (or planned), the results achieved,

and the date when corrective action will

be completed.

2. Notices of Nonconformance are

written notices describing contractors’

failures to meet commitments which

have not been made legally binding

requirements by NRC. An example is a

commitment made in a procurement

contract with a licensee as required by

10 CFR Part 50, Appendix B. Notices of

Nonconformances request non-licensees

to provide written explanations or

statements describing corrective steps

(taken or planned), the results achieved,

the dates when corrective actions will

be completed, and measures taken to

preclude recurrence.

3. Confirmatory Action Letters are

letters confirming a licensee’s or

contractor’s agreement to take certain

actions to remove significant concerns

about health and safety, safeguards, or

the environment.

4. Letters of Reprimand are letters

addressed to individuals subject to

Commission jurisdiction identifying a

significant deficiency in their

performance of licensed activities.

5. Demands for Information are

demands for information from licensees

or other persons for the purpose of

enabling the NRC to determine whether

an order or other enforcement action

should be issued.

VII. Exercise of Discretion

Notwithstanding the normal guidance

contained in this policy, as provided in

Section III, ‘‘Responsibilities,’’ the NRC

may choose to exercise discretion and

either escalate or mitigate enforcement

sanctions within the Commission’s

statutory authority to ensure that the

resulting enforcement action

appropriately reflects the level of NRC

concern regarding the violation at issue

and conveys the appropriate message to

the licensee.

A. Escalation of Enforcement Sanctions

The NRC considers violations

categorized at Severity Level I, II, or III

to be of significant regulatory concern.

If the application of the normal

guidance in this policy does not result

in an appropriate sanction, with the

approval of the Deputy Executive

Director and consultation with the EDO

and Commission, as warranted, the NRC

may apply its full enforcement authority

where the action is warranted. NRC

action may include (1) escalating civil

penalties, (2) issuing appropriate orders,

and (3) assessing civil penalties for

continuing violations on a per day basis,

up to the statutory limit of $110,000 per

violation, per day.

1. Civil penalties. Notwithstanding

the outcome of the normal civil penalty

assessment process addressed in Section

VI.B, the NRC may exercise discretion

by either proposing a civil penalty

where application of the factors would

otherwise result in zero penalty or by

escalating the amount of the resulting

civil penalty (i.e., base or twice the base

civil penalty) to ensure that the

proposed civil penalty reflects the

significance of the circumstances and

conveys the appropriate regulatory

message to the licensee. The

Commission will be notified if the

deviation in the amount of the civil

penalty proposed under this discretion

from the amount of the civil penalty

assessed under the normal process is
26642 Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices

9 Discretion is not warranted when a licensee

identifies a violation as a result of an event where

the root cause of the event is obvious or the licensee

had prior opportunity to identify the problem but

failed to take action that would have prevented the

event. Discretion may be warranted if the licensee

demonstrated initiative in identifying the

violation’s root cause.

more than two times the base civil

penalty shown in Tables 1A and 1B.

Examples when this discretion should

be considered include, but are not

limited to the following:

(a) Problems categorized at Severity

Level I or II;

(b) Overexposures, or releases of

radiological material in excess of NRC

requirements;

(c) Situations involving particularly

poor licensee performance, or involving

willfulness;

(d) Situations when the licensee’s

previous enforcement history has been

particularly poor, or when the current

violation is directly repetitive of an

earlier violation;

(e) Situations when the violation

results in a substantial increase in risk,

including cases in which the duration of

the violation has contributed to the

substantial increase;

(f) Situations when the licensee made

a conscious decision to be in

noncompliance in order to obtain an

economic benefit;

(g) Cases involving the loss of a

source. In addition, unless the licensee

self-identifies and reports the loss to the

NRC, these cases should normally result

in a civil penalty in an amount at least

in the order of the cost of an authorized

disposal of the material or of the transfer

of the material to an authorized

recipient; or

(h) Severity Level II or III violations

associated with departures from the

Final Safety Analysis Report identified

after two years from October 18, 1996.

Such a violation or problem would

consider the number and nature of the

violations, the severity of the violations,

whether the violations were continuing,

and who identified the violations (and

if the licensee identified the violation,

whether exercise of Section VII.B.3

enforcement discretion is warranted).

2. Orders. The NRC may, where

necessary or desirable, issues orders in

conjunction with or in lieu of civil

penalties to achieve or formalize

corrective actions and to deter further

recurrence of serious violations.

3. Daily civil penalties. In order to

recognize the added technical safety

significance or regulatory significance

for those cases where a very strong

message is warranted for a significant

violation that continues for more than

one day, the NRC may exercise

discretion and assess a separate

violation and attendant civil penalty up

to the statutory limit of $110,000 for

each day the violation continues. The

NRC may exercise this discretion if a

licensee was aware or clearly should

have been aware of a violation, or if the

licensee had an opportunity to identify

and correct the violation but failed to do

so.

B. Mitigation of Enforcement Sanctions

The NRC may exercise discretion and

refrain from issuing a civil penalty and/

or a Notice of Violation, if the outcome

of the normal process described in

Sections VI.A and VI.B does not result

in a sanction consistent with an

appropriate regulatory message. In

addition, even if the NRC exercises this

discretion, when the licensee failed to

make a required report to the NRC, a

separate enforcement action will

normally be issued for the licensee’s

failure to make a required report. The

approval of the Director, Office of

Enforcement, with consultation with the

Deputy Executive Director as warranted,

is required for exercising discretion of

the type described in Section VII.B.1.b

where a willful violation is involved,

and of the types described in Sections

VII.B.2 through VII.B.6. Commission

notification is required for exercising

discretion of the type described in: (1)

Section VII.B.2 the first time discretion

is exercised during that plant shutdown,

and (2) Section VII.B.6 where

appropriate based on the uniqueness or

significance of the issue. Examples

when discretion should be considered

for departing from the normal approach

in Sections VI.A and VI.B include, but

are not limited to the following:

1. Licensee-Identified Severity Level

IV Violations. The NRC, with the

approval of the Regional Administrator

or his or her designee, may refrain from

issuing a Notice of Violation for a

Severity Level IV violation that is

documented in an inspection report (or

official field notes for some material

cases) and described therein as a NonCited Violation (NCV) provided that the

inspection report includes a brief

description of the corrective action and

that the violation meets all of the

following criteria:

(a) It was identified by the licensee; 9

(b) It was not a violation that could

reasonably be expected to have been

prevented by the licensee’s corrective

action for a previous violation or a

previous licensee finding that occurred

within the past 2 years of the inspection

at issue, or the period within the last

two inspections, whichever is longer;

(c) It was or will be corrected within

a reasonable time, by specific corrective

action committed to by the licensee by

the end of the inspection, including

immediate corrective action and

comprehensive corrective action to

prevent recurrence;

(d) It was not a willful violation or if

it was a willful violation;

(i) The information concerning the

violation, if not required to be reported,

was promptly provided to appropriate

NRC personnel, such as a resident

inspector or regional section or branch

chief;

(ii) The violation involved the acts of

a low-level individual (and not a

licensee official as defined in Section

IV.C);

(iii) The violation appears to be the

isolated action of the employee without

management involvement and the

violation was not caused by lack of

management oversight as evidenced by

either a history of isolated willful

violations or a lack of adequate audits

or supervision of employees; and

(iv) Significant remedial action

commensurate with the circumstances

was taken by the licensee such that it

demonstrated the seriousness of the

violation to other employees and

contractors, thereby creating a deterrent

effect within the licensee’s organization.

Although removal of the employee from

licensed activities is not necessarily

required, substantial disciplinary action

is expected.

2. Violations Identified During

Extended Shutdowns or Work

Stoppages. The NRC may refrain from

issuing a Notice of Violation or a

proposed civil penalty for a violation

that is identified after (i) the NRC has

taken significant enforcement action

based upon a major safety event

contributing to an extended shutdown

of an operating reactor or a material

licensee (or a work stoppage at a

construction site), or (ii) the licensee

enters an extended shutdown or work

stoppage related to generally poor

performance over a long period of time,

provided that the violation is

documented in an inspection report (or

official field notes for some material

cases) and that it meets all of the

following criteria:

(a) It was either licensee-identified as

a result of a comprehensive program for

problem identification and correction

that was developed in response to the

shutdown or identified as a result of an

employee allegation to the licensee; (If

the NRC identifies the violation and all

of the other criteria are met, the NRC

should determine whether enforcement

action is necessary to achieve remedial

action, or if discretion may still be

appropriate.)
Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices 26643

(b) It is based upon activities of the

licensee prior to the events leading to

the shutdown;

(c) It would not be categorized at

Severity Level I;

(d) It was not willful; and

(e) The licensee’s decision to restart

the plant requires NRC concurrence.

3. Violations Involving Old Design

Issues. The NRC may refrain from

proposing a civil penalty for a Severity

Level II or III violation involving a past

problem, such as in engineering, design,

or installation, provided that the

violation is documented in an

inspection report (or official field notes

for some material cases) that includes a

description of the corrective action and

that it meets all of the following criteria:

(a) It was a licensee-identified as a

result of its voluntary initiative;

(b) It was or will be corrected,

including immediate corrective action

and long term comprehensive corrective

action to prevent recurrence, within a

reasonable time following identification

(this action should involve expanding

the initiative, as necessary, to identify

other failures caused by similar root

causes); and

(c) It was not likely to be identified

(after the violation occurred) by routine

licensee efforts such as normal

surveillance or quality assurance (QA)

activities.

In addition, the NRC may refrain from

issuing a Notice of Violation for a

Severity Level II, III, or IV violation that

meets the above criteria provided the

violation was caused by conduct that is

not reasonably linked to present

performance (normally, violations that

are at least 3 years old or violations

occurring during plant construction)

and there had not been prior notice so

that the licensee should have reasonably

identified the violation earlier. This

exercise of discretion is to place a

premium on licensees initiating efforts

to identify and correct subtle violations

that are not likely to be identified by

routine efforts before degraded safety

systems are called upon to work.

Section VII.B.3 discretion would not

normally be applied to departures from

the FSAR if:

(a) The NRC identifies the violation

unless it was likely in the staff’s view

that the licensee would have identified

the violation in light of the defined

scope, thoroughness, and schedule of

the licensee’s initiative (provided the

schedule provides for completion of the

licensee’s initiative within two years

after October 18, 1996;

(b) The licensee identifies the

violation as a result of an event or

surveillance or other required testing

where required corrective action

identifies the FSAR issue;

(c) The licensee identifies the

violation but had prior opportunities to

do so (was aware of the departure from

the FSAR) and failed to correct it earlier;

(d) There is willfulness associated

with the violation;

(e) The licensee fails to make a report

required by the identification of the

departure from the FSAR; or

(f) The licensee either fails to take

comprehensive corrective action or fails

to appropriately expand the corrective

action program. The corrective action

should be broad with a defined scope

and schedule.

4. Violations Identified Due to

Previous Enforcement Action. The NRC

may refrain from issuing a Notice of

Violation or a proposed civil penalty for

a violation that is identified after the

NRC has taken enforcement action,

provided that the violation is

documented in an inspection report (or

official field notes for some material

cases) that includes a description of the

corrective action and that it meets all of

the following criteria:

(a) It was licensee-identified as part of

the corrective action for the previous

enforcement action;

(b) It has the same or similar root

cause as the violation for which

enforcement action was issued;

(c) It does not substantially change the

safety significance or the character of

the regulatory concern arising out of the

initial violation; and

(d) It was or will be corrected,

including immediate corrective action

and long term comprehensive corrective

action to prevent recurrence, within a

reasonable time following identification.

(e) It would not be categorized at

Severity Level I;

5. Violations Involving Certain

Discrimination Issues. Enforcement

discretion may be exercised for

discrimination cases when a licensee

who, without the need for government

intervention, identifies an issue of

discrimination and takes prompt,

comprehensive, and effective corrective

action to address both the particular

situation and the overall work

environment for raising safety concerns.

Similarly, enforcement may not be

warranted where a complaint is filed

with the Department of Labor (DOL)

under Section 211 of the Energy

Reorganization Act of 1974, as

amended, but the licensee settles the

matter before the DOL makes an initial

finding of discrimination and addresses

the overall work environment.

Alternatively, if a finding of

discrimination is made, the licensee

may choose to settle the case before the

evidentiary hearing begins. In such

cases, the NRC may exercise its

discretion not to take enforcement

action when the licensee has addressed

the overall work environment for raising

safety concerns and has publicized that

a complaint of discrimination for

engaging in protected activity was made

to the DOL, that the matter was settled

to the satisfaction of the employee (the

terms of the specific settlement

agreement need not be posted), and that,

if the DOL Area Office found

discrimination, the licensee has taken

action to positively reemphasize that

discrimination will not be tolerated.

Similarly, the NRC may refrain from

taking enforcement action if a licensee

settles a matter promptly after a person

comes to the NRC without going to the

DOL. Such discretion would normally

not be exercised in cases in which the

licensee does not appropriately address

the overall work environment (e.g., by

using training, postings, revised policies

or procedures, any necessary

disciplinary action, etc., to

communicate its policy against

discrimination) or in cases that involve:

allegations of discrimination as a result

of providing information directly to the

NRC, allegations of discrimination

caused by a manager above first-line

supervisor (consistent with current

Enforcement Policy classification of

Severity Level I or II violations),

allegations of discrimination where a

history of findings of discrimination (by

the DOL or the NRC) or settlements

suggests a programmatic rather than an

isolated discrimination problem, or

allegations of discrimination which

appear particularly blatant or egregious.

6. Violations Involving Special

Circumstances. Notwithstanding the

outcome of the normal enforcement

process addressed in Section VI.A or the

normal civil penalty assessment process

addressed in Section VI.B, the NRC may

reduce or refrain from issuing a civil

penalty or a Notice of Violation for a

Severity Level II, III, or IV violation

based on the merits of the case after

considering the guidance in this

statement of policy and such factors as

the age of the violation, the technical

and regulatory significance of the

violation, the clarity of the requirement,

the appropriateness of the requirement,

the overall sustained performance of the

licensee has been particularly good, and

other relevant circumstances, including

any that may have changed since the

violation. This discretion is expected to

be exercised only where application of

the normal guidance in the policy is

unwarranted. In addition, the NRC may

refrain from issuing enforcement action
26644 Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices

for violations resulting from matters not

within a licensee’s control, such as

equipment failures that were not

avoidable by reasonable licensee quality

assurance measures or management

controls. Generally, however, licensees

are held responsible for the acts of their

employees and contractors.

Accordingly, this policy should not be

construed to excuse personnel or

contractor errors.

C. Exercise of Discretion for an

Operating Facility

On occasion, circumstances may arise

where a licensee’s compliance with a

Technical Specification (TS) Limiting

Condition for Operation or with other

license conditions would involve an

unnecessary plant transient or

performance of testing, inspection, or

system realignment that is inappropriate

with the specific plant conditions, or

unnecessary delays in plant startup

without a corresponding health and

safety benefit. In these circumstances,

the NRC staff may choose not to enforce

the applicable TS or other license

condition. This enforcement discretion,

designated as a Notice of Enforcement

Discretion (NOED), will only be

exercised if the NRC staff is clearly

satisfied that the action is consistent

with protecting the public health and

safety. A licensee seeking the issuance

of a NOED must provide a written

justification, or in circumstances where

good cause is shown, oral justification

followed as soon as possible by written

justification, which documents the

safety basis for the request and provides

whatever other information the NRC

staff deems necessary in making a

decision on whether or not to issue a

NOED.

The appropriate Regional

Administrator, or his or her designee,

may issue a NOED where the

noncompliance is temporary and

nonrecurring when an amendment is

not practical. The Director, Office of

Nuclear Reactor Regulation, or his or

her designee, may issue a NOED if the

expected noncompliance will occur

during the brief period of time it

requires the NRC staff to process an

emergency or exigent license

amendment under the provisions of 10

CFR 50.91(a)(5) or (6). The person

exercising enforcement discretion will

document the decision.

For an operating plant, this exercise of

enforcement discretion is intended to

minimize the potential safety

consequences of unnecessary plant

transients with the accompanying

operational risks and impacts or to

eliminate testing, inspection, or system

realignment which is inappropriate for

the particular plant conditions. For

plants in a shutdown condition,

exercising enforcement discretion is

intended to reduce shutdown risk by,

again, avoiding testing, inspection or

system realignment which is

inappropriate for the particular plant

conditions, in that, it does not provide

a safety benefit or may, in fact, be

detrimental to safety in the particular

plant condition. Exercising enforcement

discretion for plants attempting to

startup is less likely than exercising it

for an operating plant, as simply

delaying startup does not usually leave

the plant in a condition in which it

could experience undesirable transients.

In such cases, the Commission would

expect that discretion would be

exercised with respect to equipment or

systems only when it has at least

concluded that, notwithstanding the

conditions of the license: (1) The

equipment or system does not perform

a safety function in the mode in which

operation is to occur; (2) the safety

function performed by the equipment or

system is of only marginal safety

benefit, provided remaining in the

current mode increases the likelihood of

an unnecessary plant transient; or (3)

the TS or other license condition

requires a test, inspection or system

realignment that is inappropriate for the

particular plant conditions, in that it

does not provide a safety benefit, or

may, in fact, be detrimental to safety in

the particular plant condition.

The decision to exercise enforcement

discretion does not change the fact that

a violation will occur nor does it imply

that enforcement discretion is being

exercised for any violation that may

have led to the violation at issue. In

each case where the NRC staff has

chosen to issue a NOED, enforcement

action will normally be taken for the

root causes, to the extent violations

were involved, that led to the

noncompliance for which enforcement

discretion was used. The enforcement

action is intended to emphasize that

licensees should not rely on the NRC’s

authority to exercise enforcement

discretion as a routine substitute for

compliance or for requesting a license

amendment.

Finally, it is expected that the NRC

staff will exercise enforcement

discretion in this area infrequently.

Although a plant must shut down,

refueling activities may be suspended,

or plant startup may be delayed, absent

the exercise of enforcement discretion,

the NRC staff is under no obligation to

take such a step merely because it has

been requested. The decision to forego

enforcement is discretionary. When

enforcement discretion is to be

exercised, it is to be exercised only if

the NRC staff is clearly satisfied that

such action is warranted from a health

and safety perspective.

VIII. Enforcement Actions Involving

Individuals

Enforcement actions involving

individuals, including licensed

operators, are significant personnel

actions, which will be closely controlled

and judiciously applied. An

enforcement action involving an

individual will normally be taken only

when the NRC is satisfied that the

individual fully understood, or should

have understood, his or her

responsibility; knew, or should have

known, the required actions; and

knowingly, or with careless disregard

(i.e., with more than mere negligence)

failed to take required actions which

have actual or potential safety

significance. Most transgressions of

individuals at the level of Severity Level

III or IV violations will be handled by

citing only the facility licensee.

More serious violations, including

those involving the integrity of an

individual (e.g., lying to the NRC)

concerning matters within the scope of

the individual’s responsibilities, will be

considered for enforcement action

against the individual as well as against

the facility licensee. Action against the

individual, however, will not be taken

if the improper action by the individual

was caused by management failures.

The following examples of situations

illustrate this concept:

• Inadvertent individual mistakes

resulting from inadequate training or

guidance provided by the facility

licensee.

• Inadvertently missing an

insignificant procedural requirement

when the action is routine, fairly

uncomplicated, and there is no unusual

circumstance indicating that the

procedures should be referred to and

followed step-by-step.

• Compliance with an express

direction of management, such as the

Shift Supervisor or Plant Manager,

resulted in a violation unless the

individual did not express his or her

concern or objection to the direction.

• Individual error directly resulting

from following the technical advice of

an expert unless the advise was clearly

unreasonable and the licensed

individual should have recognized it as

such.

• Violations resulting from

inadequate procedures unless the

individual used a faulty procedure

knowing it was faulty and had not

attempted to get the procedure

corrected.
Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices 26645

10Except for individuals subject to civil penalties

under section 206 of the Energy Reorganization Act

of 1974, as amended, NRC will not normally impose

a civil penalty against an individual. However,

section 234 of the Atomic Energy Act (AEA) gives

the Commission authority to impose civil penalties

on ‘‘any person.’’ ‘‘Person’’ is broadly defined in

Section 11s of the AEA to include individuals, a

variety of organizations, and any representatives or

agents. This gives the Commission authority to

impose civil penalties on employees of licensees or

on separate entities when a violation of a

requirement directly imposed on them is

committed.

Listed below are examples of

situations which could result in

enforcement actions involving

individuals, licensed or unlicensed. If

the actions described in these examples

are taken by a licensed operator or taken

deliberately by an unlicensed

individual, enforcement action may be

taken directly against the individual.

However, violations involving willful

conduct not amounting to deliberate

action by an unlicensed individual in

these situations may result in

enforcement action against a licensee

that may impact an individual. The

situations include, but are not limited

to, violations that involve:

• Willfully causing a licensee to be in

violation of NRC requirements.

• Willfully taking action that would

have caused a licensee to be in violation

of NRC requirements but the action did

not do so because it was detected and

corrective action was taken.

• Recognizing a violation of

procedural requirements and willfully

not taking corrective action.

• Willfully defeating alarms which

have safety significance.

• Unauthorized abandoning of reactor

controls.

• Dereliction of duty.

• Falsifying records required by NRC

regulations or by the facility license.

• Willfully providing, or causing a

licensee to provide, an NRC inspector or

investigator with inaccurate or

incomplete information on a matter

material to the NRC.

• Willfully withholding safety

significant information rather than

making such information known to

appropriate supervisory or technical

personnel in the licensee’s organization.

• Submitting false information and as

a result gaining unescorted access to a

nuclear power plant.

• Willfully providing false data to a

licensee by a contractor or other person

who provides test or other services,

when the data affects the licensee’s

compliance with 10 CFR Part 50,

Appendix B, or other regulatory

requirement.

• Willfully providing false

certification that components meet the

requirements of their intended use, such

as ASME Code.

• Willfully supplying, by contractors

of equipment for transportation of

radioactive material, casks that do not

comply with their certificates of

compliance.

• Willfully performing unauthorized

bypassing of required reactor or other

facility safety systems.

• Willfully taking actions that violate

Technical Specification Limiting

Conditions for Operation or other

license conditions (enforcement action

for a willful violation will not be taken

if that violation is the result of action

taken following the NRC’s decision to

forego enforcement of the Technical

Specification or other license condition

or if the operator meets the

requirements of 10 CFR 50.54 (x), (i.e.,

unless the operator acted unreasonably

considering all the relevant

circumstances surrounding the

emergency).

Normally, some enforcement action is

taken against a licensee for violations

caused by significant acts of wrongdoing

by its employees, contractors, or

contractors’ employees. In deciding

whether to issue an enforcement action

to an unlicensed person as well as to the

licensee, the NRC recognizes that

judgments will have to be made on a

case by case basis. In making these

decisions, the NRC will consider factors

such as the following:

1. The level of the individual within

the organization.

2. The individual’s training and

experience as well as knowledge of the

potential consequences of the

wrongdoing.

3. The safety consequences of the

misconduct.

4. The benefit to the wrongdoer, e.g.,

personal or corporate gain.

5. The degree of supervision of the

individual, i.e., how closely is the

individual monitored or audited, and

the likelihood of detection (such as a

radiographer working independently in

the field as contrasted with a team

activity at a power plant).

6. The employer’s response, e.g.,

disciplinary action taken.

7. The attitude of the wrongdoer, e.g.,

admission of wrongdoing, acceptance of

responsibility.

8. The degree of management

responsibility or culpability.

9. Who identified the misconduct.

Any proposed enforcement action

involving individuals must be issued

with the concurrence of the Deputy

Executive Director. The particular

sanction to be used should be

determined on a case-by-case basis.10

Notices of Violation and Orders are

examples of enforcement actions that

may be appropriate against individuals.

The administrative action of a Letter of

Reprimand may also be considered. In

addition, the NRC may issue Demands

for Information to gather information to

enable it to determine whether an order

or other enforcement action should be

issued.

Orders to NRC-licensed reactor

operators may involve suspension for a

specified period, modification, or

revocation of their individual licenses.

Orders to unlicensed individuals might

include provisions that would:

• Prohibit involvement in NRC

licensed activities for a specified period

of time (normally the period of

suspension would not exceed 5 years) or

until certain conditions are satisfied,

e.g., completing specified training or

meeting certain qualifications.

• Require notification to the NRC

before resuming work in licensed

activities.

• Require the person to tell a

prospective employer or customer

engaged in licensed activities that the

person has been subject to an NRC

order.

In the case of a licensed operator’s

failure to meet applicable fitness-forduty requirements (10 CFR 55.53(j)), the

NRC may issue a Notice of Violation or

a civil penalty to the Part 55 licensee,

or an order to suspend, modify, or

revoke the Part 55 license. These actions

may be taken the first time a licensed

operator fails a drug or alcohol test, that

is, receives a confirmed positive test

that exceeds the cutoff levels of 10 CFR

Part 26 or the facility licensee’s cutoff

levels, if lower. However, normally only

a Notice of Violation will be issued for

the first confirmed positive test in the

absence of aggravating circumstances

such as errors in the performance of

licensed duties or evidence of prolonged

use. In addition, the NRC intends to

issue an order to suspend the Part 55

license for up to 3 years the second time

a licensed operator exceeds those cutoff

levels. In the event there are less than

3 years remaining in the term of the

individual’s license, the NRC may

consider not renewing the individual’s

license or not issuing a new license after

the three year period is completed. The

NRC intends to issue an order to revoke

the Part 55 license the third time a

licensed operator exceeds those cutoff

levels. A licensed operator or applicant

who refuses to participate in the drug

and alcohol testing programs

established by the facility licensee or

who is involved in the sale, use, or

possession of an illegal drug is also

subject to license suspension,

revocation, or denial.
26646 Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices

In addition, the NRC may take

enforcement action against a licensee

that may impact an individual, where

the conduct of the individual places in

question the NRC’s reasonable

assurance that licensed activities will be

properly conducted. The NRC may take

enforcement action for reasons that

would warrant refusal to issue a license

on an original application. Accordingly,

appropriate enforcement actions may be

taken regarding matters that raise issues

of integrity, competence, fitness-forduty, or other matters that may not

necessarily be a violation of specific

Commission requirements.

In the case of an unlicensed person,

whether a firm or an individual, an

order modifying the facility license may

be issued to require (1) the removal of

the person from all licensed activities

for a specified period of time or

indefinitely, (2) prior notice to the NRC

before utilizing the person in licensed

activities, or (3) the licensee to provide

notice of the issuance of such an order

to other persons involved in licensed

activities making reference inquiries. In

addition, orders to employers might

require retraining, additional oversight,

or independent verification of activities

performed by the person, if the person

is to be involved in licensed activities.

IX. Inaccurate and Incomplete

Information

A violation of the regulations

involving submittal of incomplete and/

or inaccurate information, whether or

not considered a material false

statement, can result in the full range of

enforcement sanctions. The labeling of a

communication failure as a material

false statement will be made on a caseby-case basis and will be reserved for

egregious violations. Violations

involving inaccurate or incomplete

information or the failure to provide

significant information identified by a

licensee normally will be categorized

based on the guidance herein, in Section

IV, ‘‘Severity of Violations,’’ and in

Supplement VII.

The Commission recognizes that oral

information may in some situations be

inherently less reliable than written

submittals because of the absence of an

opportunity for reflection and

management review. However, the

Commission must be able to rely on oral

communications from licensee officials

concerning significant information.

Therefore, in determining whether to

take enforcement action for an oral

statement, consideration may be given

to factors such as (1) the degree of

knowledge that the communicator

should have had, regarding the matter,

in view of his or her position, training,

and experience; (2) the opportunity and

time available prior to the

communication to assure the accuracy

or completeness of the information; (3)

the degree of intent or negligence, if

any, involved; (4) the formality of the

communication; (5) the reasonableness

of NRC reliance on the information; (6)

the importance of the information

which was wrong or not provided; and

(7) the reasonableness of the

explanation for not providing complete

and accurate information.

Absent at least careless disregard, an

incomplete or inaccurate unsworn oral

statement normally will not be subject

to enforcement action unless it involves

significant information provided by a

licensee official. However, enforcement

action may be taken for an

unintentionally incomplete or

inaccurate oral statement provided to

the NRC by a licensee official or others

on behalf of a licensee, if a record was

made of the oral information and

provided to the licensee thereby

permitting an opportunity to correct the

oral information, such as if a transcript

of the communication or meeting

summary containing the error was made

available to the licensee and was not

subsequently corrected in a timely

manner.

When a licensee has corrected

inaccurate or incomplete information,

the decision to issue a Notice of

Violation for the initial inaccurate or

incomplete information normally will

be dependent on the circumstances,

including the ease of detection of the

error, the timeliness of the correction,

whether the NRC or the licensee

identified the problem with the

communication, and whether the NRC

relied on the information prior to the

correction. Generally, if the matter was

promptly identified and corrected by

the licensee prior to reliance by the

NRC, or before the NRC raised a

question about the information, no

enforcement action will be taken for the

initial inaccurate or incomplete

information. On the other hand, if the

misinformation is identified after the

NRC relies on it, or after some question

is raised regarding the accuracy of the

information, then some enforcement

action normally will be taken even if it

is in fact corrected. However, if the

initial submittal was accurate when

made but later turns out to be erroneous

because of newly discovered

information or advance in technology, a

citation normally would not be

appropriate if, when the new

information became available or the

advancement in technology was made,

the initial submittal was corrected.

The failure to correct inaccurate or

incomplete information which the

licensee does not identify as significant

normally will not constitute a separate

violation. However, the circumstances

surrounding the failure to correct may

be considered relevant to the

determination of enforcement action for

the initial inaccurate or incomplete

statement. For example, an

unintentionally inaccurate or

incomplete submission may be treated

as a more severe matter if the licensee

later determines that the initial

submittal was in error and does not

correct it or if there were clear

opportunities to identify the error. If

information not corrected was

recognized by a licensee as significant,

a separate citation may be made for the

failure to provide significant

information. In any event, in serious

cases where the licensee’s actions in not

correcting or providing information

raise questions about its commitment to

safety or its fundamental

trustworthiness, the Commission may

exercise its authority to issue orders

modifying, suspending, or revoking the

license. The Commission recognizes

that enforcement determinations must

be made on a case-by-case basis, taking

into consideration the issues described

in this section.

X. Enforcement Action Against NonLicensees

The Commission’s enforcement policy

is also applicable to non-licensees,

including contractors and

subcontractors, holders of NRC

approvals, e.g., certificates of

compliance, early site permits, standard

design certificates, quality assurance

program approvals, or applicants for any

of them, and to employees of any of the

foregoing, who knowingly provide

components, equipment, or other goods

or services that relate to a licensee’s

activities subject to NRC regulation. The

prohibitions and sanctions for any of

these persons who engage in deliberate

misconduct or knowing submission of

incomplete or inaccurate information

are provided in the rule on deliberate

misconduct, e.g., 10 CFR 30.10 and 50.5.

Contractors who supply products or

services provided for use in nuclear

activities are subject to certain

requirements designed to ensure that

the products or services supplied that

could affect safety are of high quality.

Through procurement contracts with

licensees, suppliers may be required to

have quality assurance programs that

meet applicable requirements, e.g., 10

CFR Part 50, Appendix B, and 10 CFR

Part 71, Subpart H. Contractors

supplying certain products or services
Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices 26647

11The term ‘‘system’’ as used in these

supplements, includes administrative and

managerial control systems, as well as physical

systems.

12 ‘‘Intended safety function’’ means the total

safety function, and is not directed toward a loss

of redundancy. A loss of one subsystem does not

defeat the intended safety function as long as the

other subsystem is operable.

to licensees are subject to the

requirements of 10 CFR Part 21

regarding reporting of defects in basic

components.

When inspections determine that

violations of NRC requirements have

occurred, or that contractors have failed

to fulfill contractual commitments (e.g.,

10 CFR Part 50, Appendix B) that could

adversely affect the quality of a safety

significant product or service,

enforcement action will be taken.

Notices of Violation and civil penalties

will be used, as appropriate, for licensee

failures to ensure that their contractors

have programs that meet applicable

requirements. Notices of Violation will

be issued for contractors who violate 10

CFR Part 21. Civil penalties will be

imposed against individual directors or

responsible officers of a contractor

organization who knowingly and

consciously fail to provide the notice

required by 10 CFR 21.21(b)(1). Notices

of Nonconformance will be used for

contractors who fail to meet

commitments related to NRC activities.

XI. Referrals to the Department of

Justice

Alleged or suspected criminal

violations of the Atomic Energy Act

(and of other relevant Federal laws) are

referred to the Department of Justice

(DOJ) for investigation. Referral to the

DOJ does not preclude the NRC from

taking other enforcement action under

this policy. However, enforcement

actions will be coordinated with the

DOJ in accordance with the

Memorandum of Understanding

between the NRC and the DOJ, 53 FR

50317 (December 14, 1988).

XII. Public Disclosure of Enforcement

Actions

Enforcement actions and licensees’

responses, in accordance with 10 CFR

2.790, are publicly available for

inspection. In addition, press releases

are generally issued for orders and civil

penalties and are issued at the same

time the order or proposed imposition

of the civil penalty is issued. In

addition, press releases are usually

issued when a proposed civil penalty is

withdrawn or substantially mitigated by

some amount. Press releases are not

normally issued for Notices of Violation

that are not accompanied by orders or

proposed civil penalties.

XIII. Reopening Closed Enforcement

Actions

If significant new information is

received or obtained by NRC which

indicates that an enforcement sanction

was incorrectly applied, consideration

may be given, dependent on the

circumstances, to reopening a closed

enforcement action to increase or

decrease the severity of a sanction or to

correct the record. Reopening decisions

will be made on a case-by-case basis, are

expected to occur rarely, and require the

specific approval of the Deputy

Executive Director.

Appendix A: Safety and Compliance

As commonly understood, safety means

freedom from exposure to danger, or

protection from harm. In a practical sense, an

activity is deemed to be safe if the perceived

risks are judged to be acceptable. The Atomic

Energy Act of 1954, as amended, establishes

‘‘adequate protection’’ as the standard of

safety on which NRC regulation is based. In

the context of NRC regulation, safety means

avoiding undue risk or, stated another way,

providing reasonable assurance of adequate

protection for the public in connection with

the use of source, byproduct and special

nuclear materials.

The definition of compliance is much

simpler. Compliance simply means meeting

applicable regulatory requirements. The

relationship between compliance and safety

is discussed below.

• Safety is the fundamental regulatory

objective, and compliance with NRC

requirements plays a fundamental role in

giving the NRC confidence that safety is

being maintained. NRC requirements,

including technical specifications, other

license conditions, orders, and regulations,

have been designed to ensure adequate

protection—which corresponds to ‘‘no undue

risk to public health and safety’’—through

acceptable design, construction, operation,

maintenance, modification, and quality

assurance measures. In the context of riskinformed regulation, compliance plays a very

important role in ensuring that key

assumptions used in underlying risk and

engineering analyses remain valid.

• Adequate protection is presumptively

assured by compliance with NRC

requirements. Circumstances may arise,

however, where new information reveals, for

example, that an unforeseen hazard exists or

that there is a substantially greater potential

for a known hazard to occur. In such

situations, the NRC has the statutory

authority to require licensee action above and

beyond existing regulations to maintain the

level of protection necessary to avoid undue

risk to public health and safety.

• The NRC has the authority to exercise

discretion to permit continued operations—

despite the existence of a noncompliance—

where the noncompliance is not significant

from a risk perspective and does not, in the

particular circumstances, pose an undue risk

to public health and safety. When noncompliances occur, the NRC must evaluate

the degree of risk posed by that noncompliance to determine if specific

immediate action is required. Where needed

to ensure adequate protection of public

health and safety, the NRC may demand

immediate licensee action, up to and

including a shutdown or cessation of

licensed activities. In addition, in

determining the appropriate action to be

taken, the NRC must evaluate the noncompliance both in terms of its direct safety

and regulatory significance and by assessing

whether it is part of a pattern of noncompliance (i.e., the degree of pervasiveness)

that can lead to the determination that

licensee control processes are no longer

adequate to ensure protection of the public

health and safety. Based on the NRC’s

evaluation, the appropriate action could

include refraining from taking any action,

taking specific enforcement action, issuing

orders, or providing input to other regulatory

actions or assessments, such as increased

oversight (e.g., increased inspection).

• Since some requirements are more

important to safety than others, the

Commission should use a risk-informed

approach when applying NRC resources

to the oversight of licensed activities

(this includes enforcement).

Appendix B: Supplements—Enforcement

Examples

This appendix provides examples of

violations in each of four severity levels as

guidance in determining the appropriate

severity level for violations in each of eight

activity areas (reactor operations, Part 50

facility construction, safeguards, health

physics, transportation, fuel cycle and

materials operations, miscellaneous matters,

and emergency preparedness).

Supplement I—Reactor 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

reactor operations.

A. Severity Level I—Violations involving

for example:

1. A Safety Limit, as defined in 10 CFR

50.36 and the Technical Specifications being

exceeded;

2. A system 11 designed to prevent or

mitigate a serious safety event not being able

to perform its intended safety function 12

when actually called upon to work;

3. An accidental criticality; or

4. A licensed operator at the controls of a

nuclear reactor, or a senior operator directing

licensed activities, involved in procedural

errors which result in, or exacerbate the

consequences of, an alert or higher level

emergency and who, as a result of subsequent

testing, receives a confirmed positive test

result for drugs or alcohol.

B. Severity Level II—Violations involving

for example:

1. A system designed to prevent or mitigate

serious safety events not being able to

perform its intended safety function;

2. A licensed operator involved in the use,

sale, or possession of illegal drugs or the

consumption of alcoholic beverages, within

the protected area;
26648 Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices

13The term ‘‘completed’’ as used in this

supplement means completion of construction

including review and acceptance by the

construction QA organization.

3. A licensed operator at the control of a

nuclear reactor, or a senior operator directing

licensed activities, involved in procedural

errors and who, as a result of subsequent

testing, receives a confirmed positive test

result for drugs or alcohol; or

4. Failures to meet 10 CFR 50.59 including

several unreviewed safety questions, or

conflicts with technical specifications,

involving a broad spectrum of problems

affecting multiple areas, some of which

impact the operability of required equipment.

C. Severity Level III—Violations involving

for example:

1. A significant failure to comply with the

Action Statement for a Technical

Specification Limiting Condition for

Operation where the appropriate action was

not taken within the required time, such as:

(a) In a pressurized water reactor, in the

applicable modes, having one high-pressure

safety injection pump inoperable for a period

in excess of that allowed by the action

statement; or

(b) In a boiling water reactor, one primary

containment isolation valve inoperable for a

period in excess of that allowed by the action

statement.

2. 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 offsite power is

available; materials or components not

environmentally qualified); or

(b) Being degraded to the extent that a

detailed evaluation would be required to

determine its operability (e.g., component

parameters outside approved limits such as

pump flow rates, heat exchanger transfer

characteristics, safety valve lift setpoints, or

valve stroke times);

3. Inattentiveness to duty on the part of

licensed personnel;

4. Changes in reactor parameters that cause

unanticipated reductions in margins of

safety;

5. [Reserved]

6. A licensee failure to conduct adequate

oversight of contractors resulting in the use

of products or services that are of defective

or indeterminate quality and that have safety

significance;

7. A breakdown in the control of licensed

activities involving a number of violations

that are related (or, if isolated, that are

recurring violations) that collectively

represent a potentially significant lack of

attention or carelessness toward licensed

responsibilities;

8. A licensed operator’s confirmed positive

test for drugs or alcohol that does not result

in a Severity Level I or II violation;

9. Equipment failures caused by

inadequate or improper maintenance that

substantially complicates recovery from a

plant transient;

10. The failure to meet 10 CFR 50.59 where

an unreviewed safety question is involved, or

a conflict with a technical specification, such

that a license amendment is required;

11. The failure to perform the required

evaluation under 10 CFR 50.59 prior to

implementation of the change in those

situations in which no unreviewed safety

question existed, but an extensive evaluation

would be needed before a licensee would

have had a reasonable expectation that an

unreviewed safety question did not exist;

12. Programmatic failures (i.e., multiple or

recurring failures) to meet the requirements

of 10 CFR 50.59 and/or 50.71(e) that show a

significant lack of attention to detail, whether

or not such failures involve an unreviewed

safety question, resulting in a current safety

or regulatory concern about the accuracy of

the FSAR or a concern that 10 CFR 50.59

requirements are not being met. Application

of this example requires weighing factors

such as: a) the time period over which the

violations occurred and existed, b) the

number of failures, c) whether one or more

systems, functions, or pieces of equipment

were involved and the importance of such

equipment, functions, or systems, and d) the

potential significance of the failures;

13. The failure to update the FSAR as

required by 10 CFR 50.71(e) where the

unupdated FSAR was used in performing a

10 CFR 50.59 evaluation and as a result, an

inadequate decision was made demonstrating

a significant regulatory concern; or

14. The failure to make a report required

by 10 CFR 50.72 or 50.73 associated with (a)

an unreviewed safety question, (b) a conflict

with a technical specification, or (c) any

other Severity Level III violation.

D. Severity Level IV—Violations involving

for example:

1. A less significant failure to comply with

the Action Statement for a Technical

Specification Limiting Condition for

Operation where the appropriate action was

not taken within the required time, such as:

(a) In a pressurized water reactor, a 5%

deficiency in the required volume of the

condensate storage tank; or

(b) In a boiling water reactor, one

subsystem of the two independent MSIV

leakage control subsystems inoperable;

2. [Reserved]

3. A failure to meet regulatory

requirements that have more than minor

safety or environmental significance;

4. A failure to make a required Licensee

Event Report;

5. Relatively isolated violations of 10 CFR

50.59 not involving severity level II or III

violations that do not suggest a programmatic

failure to meet 10 CFR 50.59. Relatively

isolated violations or failures would include

a number of recently discovered violations

that occurred over a period of years and are

not indicative of a programmatic safety

concern with meeting 10 CFR 50.59 or

50.71(e);

6. A relatively isolated failure to document

an evaluation where there is evidence that an

adequate evaluation was performed prior to

the change in the facility or procedures, or

the conduct of an experiment or test;

7. A failure to update the FSAR as required

by 10 CFR 50.71(e) where an adequate

evaluation under 10 CFR 50.59 had been

performed and documented; or

8. A past programmatic failure to meet 10

CFR 50.59 and/or 10 CFR 50.71(e)

requirements not involving Severity Level II

or III violations that does not reflect a current

safety or regulatory concern about the

accuracy of the FSAR or a concern that 10

CFR 50.59 requirements are not being met.

E. Minor Violations

A failure to meet 10 CFR 50.59

requirements that involves a change to the

FSAR description or procedure, or involves

a test or experiment not described in the

FSAR, where there was not a reasonable

likelihood that the change to the facility or

procedure or the conduct of the test or

experiment would ever be an unreviewed

safety question. In the case of a 10 CFR

50.71(e) violation, where a failure to update

the FSAR would not have a material impact

on safety or licensed activities. The focus of

the minor violation is not on the actual

change, test, or experiment, but on the

potential safety role of the system,

equipment, etc., that is being changed, tested,

or experimented on.

Supplement II—Part 50 Facility

Construction

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 Part

50 facility construction.

A. Severity Level I—Violations involving

structures or systems that are completed 13 in

such a manner that they would not have

satisfied their intended safety related

purpose.

B. Severity Level II—Violations involving

for example:

1. A breakdown in the Quality Assurance

(QA) program as exemplified by deficiencies

in construction QA related to more than one

work activity (e.g., structural, piping,

electrical, foundations). These deficiencies

normally involve the licensee’s failure to

conduct adequate audits or to take prompt

corrective action on the basis of such audits

and normally involve multiple examples of

deficient construction or construction of

unknown quality due to inadequate program

implementation; or

2. A structure or system that is completed

in such a manner that it could have an

adverse effect on the safety of operations.

C. Severity Level III—Violations involving

for example:

1. A deficiency in a licensee QA program

for construction related to a single work

activity (e.g., structural, piping, electrical or

foundations). This significant deficiency

normally involves the licensee’s failure to

conduct adequate audits or to take prompt

corrective action on the basis of such audits,

and normally involves multiple examples of

deficient construction or construction of

unknown quality due to inadequate program

implementation;

2. A failure to confirm the design safety

requirements of a structure or system as a

result of inadequate preoperational test

program implementation; or

3. A failure to make a required 10 CFR

50.55(e) report.

D. Severity Level IV—Violations involving

failure to meet regulatory requirements

including one or more Quality Assurance

Criterion not amounting to Severity Level I,
Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices 26649

14See 10 CFR 73.2 for the definition of ‘‘formula

quantity.’’

15The term ‘‘unauthorized individual’’ as used in

this supplement means someone who was not

authorized for entrance into the area in question, or

not authorized to enter in the manner entered.

16The phrase ‘‘vital area’’ as used in this

supplement includes vital areas and material access

areas.

17See 10 CFR 73.2 for the definition of ‘‘special

nuclear material of moderate strategic significance.’’

18 In determining whether access can be easily

gained, factors such as predictability, identifiability,

and ease of passage should be considered.

19Personnel overexposures and associated

violations incurred during a life-saving or other

emergency response effort will be treated on a caseby-case basis.

II, or III violations that have more than minor

safety or environmental significance.

Supplement III—Safeguards

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

safeguards.

A. Severity Level I—Violations involving

for example:

1. An act of radiological sabotage in which

the security system did not function as

required and, as a result of the failure, there

was a significant event, such as:

(a) A Safety Limit, as defined in 10 CFR

50.36 and the Technical Specifications, was

exceeded;

(b) A system designed to prevent or

mitigate a serious safety event was not able

to perform its intended safety function when

actually called upon to work; or

(c) An accidental criticality occurred;

2. The theft, loss, or diversion of a formula

quantity 14 of special nuclear material (SNM);

or

3. Actual unauthorized production of a

formula quantity of SNM

B. Severity Level II—Violations involving

for example:

1. The entry of an unauthorized

individual 15 who represents a threat into a

vital area 16 from outside the protected area;

2. The theft, loss or diversion of SNM of

moderate strategic significance 17 in which

the security system did not function as

required; or

3. Actual unauthorized production of

SNM.

C. Severity Level III—Violations involving for

example:

1. A failure or inability to control access

through established systems or procedures,

such that an unauthorized individual (i.e.,

not authorized unescorted access to protected

area) could easily gain undetected access 18

into a vital area from outside the protected

area;

2. A failure to conduct any search at the

access control point or conducting an

inadequate search that resulted in the

introduction to the protected area of firearms,

explosives, or incendiary devices and

reasonable facsimiles thereof that could

significantly assist radiological sabotage or

theft of strategic SNM;

3. A failure, degradation, or other

deficiency of the protected area intrusion

detection or alarm assessment systems such

that an unauthorized individual who

represents a threat could predictably

circumvent the system or defeat a specific

zone with a high degree of confidence

without insider knowledge, or other

significant degradation of overall system

capability;

4. A significant failure of the safeguards

systems designed or used to prevent or detect

the theft, loss, or diversion of strategic SNM;

5. A failure to protect or control classified

or safeguards information considered to be

significant while the information is outside

the protected area and accessible to those not

authorized access to the protected area;

6. A significant failure to respond to an

event either in sufficient time to provide

protection to vital equipment or strategic

SNM, or with an adequate response force;

7. A failure to perform an appropriate

evaluation or background investigation so

that information relevant to the access

determination was not obtained or

considered and as a result a person, who

would likely not have been granted access by

the licensee, if the required investigation or

evaluation had been performed, was granted

access; or

8. A breakdown in the security program

involving a number of violations that are

related (or, if isolated, that are recurring

violations) that collectively reflect a

potentially significant lack of attention or

carelessness toward licensed responsibilities.

D. Severity Level IV—Violations involving

for example:

1. A failure or inability to control access

such that an unauthorized individual (i.e.,

authorized to protected area but not to vital

area) could easily gain undetected access into

a vital area from inside the protected area or

into a controlled access area;

2. A failure to respond to a suspected event

in either a timely manner or with an

adequate response force;

3. A failure to implement 10 CFR Parts 25

and 95 with respect to the information

addressed under Section 142 of the Act, and

the NRC approved security plan relevant to

those parts;

4. A failure to make, maintain, or provide

log entries in accordance with 10 CFR 73.71

(c) and (d), where the omitted information (i)

is not otherwise available in easily

retrievable records, and (ii) significantly

contributes to the ability of either the NRC

or the licensee to identify a programmatic

breakdown;

5. A failure to conduct a proper search at

the access control point;

6. A failure to properly secure or protect

classified or safeguards information inside

the protected area which could assist an

individual in an act of radiological sabotage

or theft of strategic SNM where the

information was not removed from the

protected area;

7. A failure to control access such that an

opportunity exists that could allow

unauthorized and undetected access into the

protected area but which was neither easily

nor likely to be exploitable;

8. A failure to conduct an adequate search

at the exit from a material access area;

9. A theft or loss of SNM of low strategic

significance that was not detected within the

time period specified in the security plan,

other relevant document, or regulation; or

10. Other violations that have more than

minor safeguards significance.

Supplement IV—Health Physics (10 CFR

Part 20)

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

health physics, 10 CFR Part 20.19

A. Severity Level I—Violations involving

for example:

1. A radiation exposure during any year of

a worker in excess of 25 rems total effective

dose equivalent, 75 rems to the lens of the

eye, or 250 rads to the skin of the whole

body, or to the feet, ankles, hands or

forearms, or to any other organ or tissue;

2. A radiation exposure over the gestation

period of the embryo/fetus of a declared

pregnant woman in excess of 2.5 rems total

effective dose equivalent;

3. A radiation exposure during any year of

a minor in excess of 2.5 rems total effective

dose equivalent, 7.5 rems to the lens of the

eye, or 25 rems to the skin of the whole body,

or to the feet, ankles, hands or forearms, or

to any other organ or tissue;

4. An annual exposure of a member of the

public in excess of 1.0 rem total effective

dose equivalent;

5. A release of radioactive material to an

unrestricted area at concentrations in excess

of 50 times the limits for members of the

public as described in 10 CFR

20.1302(b)(2)(i); or

6. Disposal of licensed material in

quantities or concentrations in excess of 10

times the limits of 10 CFR 20.2003.

B. Severity Level II—Violations involving

for example:

1. A radiation exposure during any year of

a worker in excess of 10 rems total effective

dose equivalent, 30 rems to the lens of the

eye, or 100 rems to the skin of the whole

body, or to the feet, ankles, hands or

forearms, or to any other organ or tissue;

2. A radiation exposure over the gestation

period of the embryo/fetus of a declared

pregnant woman in excess of 1.0 rem total

effective dose equivalent;

3. A radiation exposure during any year of

a minor in excess of 1 rem total effective dose

equivalent; 3.0 rems to the lens of the eye,

or 10 rems to the skin of the whole body, or

to the feet, ankles, hands or forearms, or to

any other organ or tissue;

4. An annual exposure of a member of the

public in excess of 0.5 rem total effective

dose equivalent;

5. A release of radioactive material to an

unrestricted area at concentrations in excess

of 10 times the limits for members of the

public as described in 10 CFR

20.1302(b)(2)(i) (except when operation up to

0.5 rem a year has been approved by the

Commission under Section 20.1301(c));

6. Disposal of licensed material in

quantities or concentrations in excess of five

times the limits of 10 CFR 20.2003; or

7. A failure to make an immediate

notification as required by 10 CFR

20.2202 (a)(1) or (a)(2).

C. Severity Level III—Violations involving

for example:
26650 Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices

20Some transportation requirements are applied

to more than one licensee involved in the same

activity such as a shipper and a carrier. When a

violation of such a requirement occurs, enforcement

action will be directed against the responsible

licensee which, under the circumstances of the

case, may be one or more of the licensees involved.

1. A radiation exposure during any year of

a worker in excess of 5 rems total effective

dose equivalent, 15 rems to the lens of the

eye, or 50 rems to the skin of the whole body

or to the feet, ankles, hands or forearms, or

to any other organ or tissue;

2. A radiation exposure over the gestation

period of the embryo/fetus of a declared

pregnant woman in excess of 0.5 rem total

effective dose equivalent (except when doses

are in accordance with the provisions of

Section 20.1208(d));

3. A radiation exposure during any year of

a minor in excess of 0.5 rem total effective

dose equivalent; 1.5 rems to the lens of the

eye, or 5 rems to the skin of the whole body,

or to the feet, ankles, hands or forearms, or

to any other organ or tissue;

4. A worker exposure above regulatory

limits when such exposure reflects a

programmatic (rather than an isolated)

weakness in the radiation control program;

5. An annual exposure of a member of the

public in excess of 0.1 rem total effective

dose equivalent (except when operation up to

0.5 rem a year has been approved by the

Commission under Section 20.1301(c));

6. A release of radioactive material to an

unrestricted area at concentrations in excess

of two times the effluent concentration limits

referenced in 10 CFR 20.1302(b)(2)(i) (except

when operation up to 0.5 rem a year has been

approved by the Commission under Section

20.1301(c));

7. A failure to make a 24-hour notification

required by 10 CFR 20.2202(b) or an

immediate notification required by 10 CFR

20.2201(a)(1)(i);

8. A substantial potential for exposures or

releases in excess of the applicable limits in

10 CFR Part 20 Sections 20.1001–20.2401

whether or not an exposure or release occurs;

9. Disposal of licensed material not

covered in Severity Levels I or II;

10. A release for unrestricted use of

contaminated or radioactive material or

equipment that poses a realistic potential for

exposure of the public to levels or doses

exceeding the annual dose limits for

members of the public, or that reflects a

programmatic (rather than an isolated)

weakness in the radiation control program;

11. Conduct of licensee activities by a

technically unqualified person;

12. A significant failure to control licensed

material; or

13. A breakdown in the radiation safety

program involving a number of violations

that are related (or, if isolated, that are

recurring) that collectively represent a

potentially significant lack of attention or

carelessness toward licensed responsibilities.

D. Severity Level IV—Violations involving

for example:

1. Exposures in excess of the limits of 10

CFR 20.1201, 20.1207, or 20.1208 not

constituting Severity Level I, II, or III

violations;

2. A release of radioactive material to an

unrestricted area at concentrations in excess

of the limits for members of the public as

referenced in 10 CFR 20.1302(b)(2)(i) (except

when operation up to 0.5 rem a year has been

approved by the Commission under Section

20.1301(c));

3. A radiation dose rate in an unrestricted

or controlled area in excess of 0.002 rem in

any 1 hour (2 millirem/hour) or 50 millirems

in a year;

4. Failure to maintain and implement

radiation programs to keep radiation

exposures as low as is reasonably achievable;

5. Doses to a member of the public in

excess of any EPA generally applicable

environmental radiation standards, such as

40 CFR Part 190;

6. A failure to make the 30-day notification

required by 10 CFR 20.2201(a)(1)(ii) or

20.2203(a);

7. A failure to make a timely written report

as required by 10 CFR 20.2201(b), 20.2204, or

20.2206;

8. A failure to report an exceedance of the

dose constraint established in 10 CFR

20.1101(d) or a failure to take corrective

action for an exceedance, as required by 10

CFR 20.1101(d); or

9. Any other matter that has more than a

minor safety, health, or environmental

significance.

Supplement V—Transportation

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

NRC transportation requirements 20.

A. Severity Level I—Violations involving

for example:

1. Failure to meet transportation

requirements that resulted in loss of control

of radioactive material with a breach in

package integrity such that the material

caused a radiation exposure to a member of

the public and there was clear potential for

the public to receive more than .1 rem to the

whole body;

2. Surface contamination in excess of 50

times the NRC limit; or

3. External radiation levels in excess of 10

times the NRC limit.

B. Severity Level II—Violations

involving for example:

1. Failure to meet transportation

requirements that resulted in loss of control

of radioactive material with a breach in

package integrity such that there was a clear

potential for the member of the public to

receive more than .1 rem to the whole body;

2. Surface contamination in excess of 10,

but not more than 50 times the NRC limit;

3. External radiation levels in excess of

five, but not more than 10 times the NRC

limit; or

4. A failure to make required initial

notifications associated with Severity Level I

or II violations.

C. Severity Level III—Violations involving

for example:

1. Surface contamination in excess of five

but not more than 10 times the NRC limit;

2. External radiation in excess of one but

not more than five times the NRC limit;

3. Any noncompliance with labeling,

placarding, shipping paper, packaging,

loading, or other requirements that could

reasonably result in the following:

(a) A significant failure to identify the type,

quantity, or form of material;

(b) A failure of the carrier or recipient to

exercise adequate controls; or

(c) A substantial potential for either

personnel exposure or contamination above

regulatory limits or improper transfer of

material;

4. A failure to make required initial

notification associated with Severity Level III

violations; or

5. A breakdown in the licensee’s program

for the transportation of licensed material

involving a number of violations that are

related (or, if isolated, that are recurring

violations) that collectively reflect a

potentially significant lack of attention or

carelessness toward licensed responsibilities.

D. Severity Level IV—Violations involving

for example:

1. A breach of package integrity without

external radiation levels exceeding the NRC

limit or without contamination levels

exceeding five times the NRC limits;

2. Surface contamination in excess of but

not more than five times the NRC limit;

3. A failure to register as an authorized

user of an NRC-Certified Transport package;

4. A noncompliance with shipping papers,

marking, labeling, placarding, packaging or

loading not amounting to a Severity Level I,

II, or III violation;

5. A failure to demonstrate that packages

for special form radioactive material meets

applicable regulatory requirements;

6. A failure to demonstrate that packages

meet DOT Specifications for 7A Type A

packages; or

7. Other violations that have more than

minor safety or environmental significance.

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 and materials operations.

A. Severity Level I—Violations involving

for example:

1. Radiation levels, contamination levels,

or releases that exceed 10 times the limits

specified in the license;

2. A system designed to prevent or mitigate

a serious safety event not being operable

when actually required to perform its design

function;

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:
Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices 26651

21 In applying the examples in this supplement

regarding inaccurate or incomplete information and

records, reference should also be made to the

buidance in Section IX, ‘‘Inaccurate and Incomplete

Information,’’ and to the definition of ‘‘licensee

official’’ contianed in Section IV.C.

1. Radiation levels, contamination levels,

or releases that exceed five times the limits

specified in the license;

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;

2. Possession or use of unauthorized

equipment or materials in the conduct of

licensee activities which degrades safety;

3. Use of radioactive material on humans

where such use is not authorized;

4. Conduct of licensed activities by a

technically unqualified or uncertified person;

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;

6. Substantial failure to implement the

quality management program as required by

10 CFR 35.32 that does not result in a

misadministration; failure to report a

misadministration; or programmatic

weakness in the implementation of the

quality management program that results in

a misadministration;

7. A breakdown in the control of licensed

activities involving a number of violations

that are related (or, if isolated, that are

recurring violations) that collectively

represent a potentially significant lack of

attention or carelessness toward licensed

responsibilities;

8. A failure, during radiographic

operations, to have present at least two

qualified individuals or to use radiographic

equipment, radiation survey instruments,

and/or personnel monitoring devices as

required by 10 CFR Part 34;

9. A failure to submit an NRC Form 241 as

required by 10 CFR 150.20;

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

location where licensed activities are being

conducted, or where licensed material is

being stored where the new facilities do not

meet the 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 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;

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; or

19. A failure, during radiographic

operations, to stop work after a pocket

dosimeter is found to have gone off-scale, or

after an electronic dosimeter reads greater

than 200 mrem, and before a determination

is made of the individual’s actual radiation

exposure.

D. Severity Level IV—Violations involving

for example:

1. A failure to maintain patients

hospitalized who have cobalt-60, cesium-137,

or iridium-192 implants or to conduct

required leakage or contamination tests, or to

use properly calibrated equipment;

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.

Supplement VII—Miscellaneous Matters

This supplement provides examples of

violations in each of the four severity levels

as guidance in determining the appropriate

severity level for violations involving

miscellaneous matters.

A. Severity Level I—Violations involving

for example:

1. Inaccurate or incomplete information 21

that is provided to the NRC (a) deliberately

with the knowledge of a licensee official that

the information is incomplete or inaccurate,

or (b) if the information, had it been complete

and accurate at the time provided, likely

would have resulted in regulatory action

such as an immediate order required by the

public health and safety;

2. Incomplete or inaccurate information

that the NRC requires be kept by a licensee

that is (a) incomplete or inaccurate because

of falsification by or with the knowledge of

a licensee official, or (b) if the information,

had it been complete and accurate when

reviewed by the NRC, likely would have

resulted in regulatory action such as an

immediate order required by public health

and safety considerations;

3. Information that the licensee has

identified as having significant implications

for public health and safety or the common

defense and security (‘‘significant

information identified by a licensee’’) and is

deliberately withheld from the Commission;

4. Action by senior corporate management

in violation of 10 CFR 50.7 or similar

regulations against an employee;

5. A knowing and intentional failure to

provide the notice required by 10 CFR Part

21; or
26652 Federal Register / Vol. 63, No. 92 /Wednesday, May 13, 1998 / Notices

22The example for violations for fitness-for-duty

relate to violations of 10 CFR Part 26.

6. A failure to substantially implement the

required fitness-for-duty program. 22

B. Severity Level II—Violations involving

for example:

1. Inaccurate or incomplete information

that is provided to the NRC (a) by a licensee

official because of careless disregard for the

completeness or accuracy of the information,

or (b) if the information, had it been complete

and accurate at the time provided, likely

would have resulted in regulatory action

such as a show cause order or a different

regulatory position;

2. Incomplete or inaccurate information

that the NRC requires be kept by a licensee

which is (a) incomplete or inaccurate because

of careless disregard for the accuracy of the

information on the part of a licensee official,

or (b) if the information, had it been complete

and accurate when reviewed by the NRC,

likely would have resulted in regulatory

action such as a show cause order or a

different regulatory position;

3. ‘‘Significant information identified by a

licensee’’ and not provided to the

Commission because of careless disregard on

the part of a licensee official;

4. An action by plant management or midlevel management in violation of 10 CFR 50.7

or similar regulations against an employee;

5. A failure to provide the notice required

by 10 CFR Part 21;

6. A failure to remove an individual from

unescorted access who has been involved in

the sale, use, or possession of illegal drugs

within the protected area or take action for

on duty misuse of alcohol, prescription

drugs, or over-the-counter drugs;

7. A failure to take reasonable action when

observed behavior within the protected area

or credible information concerning activities

within the protected area indicates possible

unfitness for duty based on drug or alcohol

use;

8. A deliberate failure of the licensee’s

Employee Assistance Program (EAP) to notify

licensee’s management when EAP’s staff is

aware that an individual’s condition may

adversely affect safety related activities; or

9. The failure of licensee management to

take effective action in correcting a hostile

work environment.

C. Severity Level III—Violations involving

for example:

1. Incomplete or inaccurate information

that is provided to the NRC (a) because of

inadequate actions on the part of licensee

officials but not amounting to a Severity

Level I or II violation, or (b) if the

information, had it been complete and

accurate at the time provided, likely would

have resulted in a reconsideration of a

regulatory position or substantial further

inquiry such as an additional inspection or

a formal request for information;

2. Incomplete or inaccurate information

that the NRC requires be kept by a licensee

that is (a) incomplete or inaccurate because

of inadequate actions on the part of licensee

officials but not amounting to a Severity

Level I or II violation, or (b) if the

information, had it been complete and

accurate when reviewed by the NRC, likely

would have resulted in a reconsideration of

a regulatory position or substantial further

inquiry such as an additional inspection or

a formal request for information;

3. A failure to provide ‘‘significant

information identified by a licensee’’ to the

Commission and not amounting to a Severity

Level I or II violation;

4. An action by first-line supervision or

other low-level management in violation of

10 CFR 50.7 or similar regulations against an

employee;

5. An inadequate review or failure to

review such that, if an appropriate review

had been made as required, a 10 CFR Part 21

report would have been made;

6. A failure to complete a suitable inquiry

on the basis of 10 CFR Part 26, keep records

concerning the denial of access, or respond

to inquiries concerning denials of access so

that, as a result of the failure, a person

previously denied access for fitness-for-duty

reasons was improperly granted access;

7. A failure to take the required action for

a person confirmed to have been tested

positive for illegal drug use or take action for

onsite alcohol use; not amounting to a

Severity Level II violation;

8. A failure to assure, as required, that

contractors have an effective fitness-for-duty

program;

9. A breakdown in the fitness-for-duty

program involving a number of violations of

the basic elements of the fitness-for-duty

program that collectively reflect a significant

lack of attention or carelessness towards

meeting the objectives of 10 CFR 26.10; or

10. Threats of discrimination or restrictive

agreements which are violations under NRC

regulations such as 10 CFR 50.7(f).

D. Severity Level IV—Violations involving

for example:

1. Incomplete or inaccurate information of

more than minor significance that is

provided to the NRC but not amounting to a

Severity Level I, II, or III violation;

2. Information that the NRC requires be

kept by a licensee and that is incomplete or

inaccurate and of more than minor

significance but not amounting to a Severity

Level I, II, or III violation;

3. An inadequate review or failure to

review under 10 CFR Part 21 or other

procedural violations associated with 10 CFR

Part 21 with more than minor safety

significance;

4. Violations of the requirements of Part 26

of more than minor significance;

5. A failure to report acts of licensed

operators or supervisors pursuant to 10 CFR

26.73; or

6. Discrimination cases which, in

themselves, do not warrant a Severity Level

III categorization.

Supplement VIII—Emergency Preparedness

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

emergency preparedness. It should be noted

that citations are not normally made for

violations involving emergency preparedness

occurring during emergency exercises.

However, where exercises reveal (i) training,

procedural, or repetitive failures for which

corrective actions have not been taken, (ii) an

overall concern regarding the licensee’s

ability to implement its plan in a manner that

adequately protects public health and safety,

or (iii) poor self critiques of the licensee’s

exercises, enforcement action may be

appropriate.

A. Severity Level I—Violations involving

for example:

In a general emergency, licensee failure to

promptly (1) correctly classify the event, (2)

make required notifications to responsible

Federal, State, and local agencies, or (3)

respond to the event (e.g., assess actual or

potential offsite consequences, activate

emergency response facilities, and augment

shift staff.)

B. Severity Level II—Violations involving

for example:

1. In a site emergency, licensee failure to

promptly (1) correctly classify the event, (2)

make required notifications to responsible

Federal, State, and local agencies, or (3)

respond to the event (e.g., assess actual or

potential offsite consequences, activate

emergency response facilities, and augment

shift staff); or

2. A licensee failure to meet or implement

more than one emergency planning standard

involving assessment or notification.

C. Severity Level III—Violations involving

for example:

1. In an alert, licensee failure to promptly

(1) correctly classify the event, (2) make

required notifications to responsible Federal,

State, and local agencies, or (3) respond to

the event (e.g., assess actual or potential

offsite consequences, activate emergency

response facilities, and augment shift staff);

2. A licensee failure to meet or implement

one emergency planning standard involving

assessment or notification; or

3. A breakdown in the control of licensed

activities involving a number of violations

that are related (or, if isolated, that are

recurring violations) that collectively

represent a potentially significant lack of

attention or carelessness toward licensed

responsibilities.

D. Severity Level IV—Violations involving

for example:

A licensee failure to meet or implement

any emergency planning standard or

requirement not directly related to

assessment and notification.

Dated at Rockville, Maryland, this 6th day

of May, 1998.

For the Nuclear Regulatory Commission.

John C. Hoyle,

Secretary of the Commission.

[FR Doc. 98–12534 Filed 5–12–98; 8:45 am]

BILLING CODE 7590–01–P