Reexamination of the NRC Enforcement Policy

SUMMARY: The Nuclear Regulatory Commission (NRC) is reexamining its

enforcement program and requests public comment on whether the scope,

purpose, procedures, and methods of its enforcement program are

appropriate, and how they may be improved. The NRC is soliciting

comments from interested public interest groups, the regulated

industry, states, and concerned citizens. Comments from both reactor

and materials licensees are requested. This request is intended to

assist the NRC in a review of its enforcement program which is being

conducted to make recommendations for improvements in the regulatory

process.

DATES: The comment period expires October 24, 1994. Comments received

after this date will be considered if it is practical to do so, but the

Commission is able to assure consideration only for comments received

on or before this date.

ADDRESSES: Submit written comments to: David Meyer, Chief, Rules Review

and Directives Branch, Division of Freedom of Information and

Publication 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 7:45 am

and 4:15 pm, Federal workdays. Copies of comments received may be

examined at the NRC Public Document Room, 2120 L Street NW. (Lower

Level), Washington, DC. After September 1, 1994, it is expected that

comments may also be provided electronically by accessing the NRC

bulletin board system (BBS) that is a subsystem of FedWorld, which is

operated by the National Technical Information Service. The NRC BBS can

be accessed directly by a toll free number, (800) 303-9672, at modem

speeds up to 9600 Baud with communication parameters set at 8 data

bits, no parity, 1 stop bit, full duplex, and ANSI terminal emulation.

Select the ``Subsystems/Databases'' option from the ``NRC Main Menu''

and then the ``Enforcement Program'' option. The ``Help/Information

Center'' from the ``Enforcement Program Menu'' provides selections on

``Request for Comments on the Enforcement Policy'' and ``How to Leave

an Official Comment.'' The NRC BBS can also be accessed from the

FedWorld ``Subsystems/Databases'' menu, which could facilitate user

access using the Internet. FedWorld's access via Internet is Telnet

access: fedworld.gov (192.239.92.3); FTP site access: ftp.fedworld.gov

(192.239.92.205), and World Wide Web (Home Page): www.fedworld.gov

(this is the URL).

FOR FURTHER INFORMATION CONTACT: James Lieberman, Director, Office of

Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555,

(301) 504-2741. Questions on the NRC BBS may be directed to Tom Dunning

at (301) 504-1189.

SUPPLEMENTARY INFORMATION: On May 13, 1994, the Executive Director for

Operations directed a Review team composed of Senior NRC managers to

reexamine the NRC enforcement program. The Review Team is chaired by

James Lieberman, Director, Office of Enforcement, and includes James

Fitzgerald, Acting Director, Office of Investigations, Roy Zimmerman,

Associate Director for Projects, Office of Nuclear Reactor Regulations,

William Brach, Deputy Division Director, Division of Industrial and

Medical Nuclear Safety, Office of Nuclear Materials Safety and

Safeguards, Luis Reyes, Deputy Administrator Region II, and Jack

Goldberg, Deputy Assistant General Counsel for Enforcement.

The purpose of this review effort is to (i) perform an assessment

of the NRC's enforcement program to determine whether the defined

purposes of the enforcement program are appropriate, (ii) determine

whether the NRC's enforcement practices and procedures for issuing

enforcement actions are consistent with those purposes, and (iii)

provide recommendations on any changes the Review Team believes

advisable. It is expected that the Review Team will complete its review

and issue its report, including recommendations, by the end of January

1995.

The NRC's enforcement program is guided by the Commission's

``General Statement of Policy and Procedure for NRC Enforcement

Actions'' (Enforcement Policy). The Enforcement Policy is published in

the Code of Federal Regulations at 10 CFR part 2, appendix C to provide

widespread dissemination of the Commission's Enforcement Policy.

However, it is a policy statement and not a regulation. The Enforcement

Policy notes that the Commission, as appropriate under the circumstance

of a particular case, can deviate from it.

The Commission's Enforcement Policy was first published in 1980 as

an interim policy. 45 FR 66754 (October 7, 1980). On March 9, 1982 (47

FR 9987), the Commission published a final version of the policy. Since

that time, the Enforcement Policy has been modified on a number of

occasions to address changing requirements and additional experience.

The current Enforcement Policy is reflected in the 1994 Code of Federal

Regulations as supplemented by a July 15, 1994 (59 FR 36026),

modification to provide additional severity level examples.

Since the Enforcement Policy was first promulgated, the purpose and

the four objectives for the NRC enforcement program have remained

essentially unchanged. Section I of the Enforcement Policy states that:

The purpose of the NRC enforcement program is to promote and

protect the radiological health and safety of the public, including

employees' health and safety, the common defense and security, and the

environment by [the following four objectives]:

Ensuring compliance with NRC regulations and license

conditions;

Obtaining prompt correction of violations and adverse

quality conditions which may affect safety;

Deterring future violations and occurrences of conditions

adverse to quality; and

Encouraging improvement of licensee and vendor

performance, and by example, that of industry, including the prompt

identification and reporting of potential safety problems.

In summary, the Enforcement Policy provides for a graduated set of

sanctions based on the severity of the violations. Normally, each

violation or grouping of violations is categorized into one of five

severity levels based on the relative importance of the violation,

including both the technical significance, i.e. the actual and

potential consequences, and the regulatory significance including any

willfulness associated with the violation. Formal sanctions include

Notices of Violations, civil penalties, and orders. In determining the

particular sanction to be used, consideration is given to (i) the

severity level of the violation, including its duration, (ii) the

licensee's response to the violation, including whether the licensee

identified the violation and corrected it, and (iii) the licensee's

past performance, including whether the violation was a recurring one,

the licensee's compliance history and general performance, and whether

there were prior opportunities to discover, correct, or avoid the

violation. The Enforcement Policy provides for the ability to exercise

discretion to increase or reduce sanctions (including dispositioning

certain violations as non-cited violations) to provide appropriate

regulatory messages to encourage improved performance. Enforcement

actions involving orders or violations at Severity Level I, II, or III

are considered more significant and are referred to as escalated

actions. In addition to formal enforcement sanctions, NRC also uses

administrative actions such as Demands for Information, Confirmatory

Action Letters, and Letters of Reprimand.

In accordance with its charter, the Review Team, is to consider,

but not be limited to, the following issues in conducting its

assessment of the enforcement program:

(i) The balance between providing deterrence and incentive (both

positive and negative) for the identification and correction of

violations,

(ii) The appropriateness of NRC sanctions,

(iii) Whether the Commission should seek statutory authority to

increase the amount of civil penalties,1

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\1\In 1993, the Commission conducted a reassessment of the NRC's

program for protecting allegers against retaliation. The Review Team

which performed that reassessment recommended, among other things,

that the NRC should seek an amendment to section 234 of the Atomic

Energy Act of 1954 to increase the current maximum civil penalty of

$100,000 to $500,000 per day per violation to be normally used for

willful violations including those involving discrimination.

Recommendation II.D-3, ``Reassessment of the NRC's Program for

Protecting Allegers Against Retaliation,'' NUREG-1499 (January

1994). The Commission did not act on this recommendation, but

instead, the Commission approved a staff proposal to defer action on

the recommendation pending a review of the NRC Enforcement Program.

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(iv) Whether there should be different enforcement policies and

practices for material licensees in contrast to power reactors or large

fuel facilities, and

(v) Whether the Commission should establish open enforcement

conferences as the normal practice.2

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\2\In 1992, the NRC established a two-year trial program for

conducting enforcement conferences open to attendance by members of

the public (57 FR 30762, July 10,1992). This trial program was to

end July 11, 1994 upon which date comments were due on whether NRC

should routinely conduct open enforcement conferences. However, in

light of the reexamination of the enforcement program, the trial

program was extended pending the outcome of the enforcement program

review (59 FR 36796, July 19,1994).

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Public comments are sought on these issues to assist the Review

Team in its reassessment. In addition to general comments on the above

issues, the Review Team seeks comments on a number of specific issues.

Comments are sought from both reactor and material licensees,

vendors, other persons who are subject to NRC enforcement jurisdiction,

state and local governments, and other members of the public who may

have an interest in NRC enforcement actions. Although the Review Team

is interested in as many comments as possible, commenters are not

obligated to and need not address every issue.

In providing comments, please key comments to the numbering system

used to identify the specific issues by providing the issue number

before the particular comment (e.g., Response to A.3). General or

anecdotal comments (such as a general comment to the effect that some

enforcement conferences have not been effective or that some

enforcement cases have been inconsistent with the Enforcement Policy)

will not be particularly useful. Rather comments should be as specific

as possible and should reference specific cases, as appropriate, so

that the Review Team can understand and evaluate the comment. Responses

which call for a ``yes'' or ``no'' answer should be accompanied with an

explanation as to why the commenter agrees or disagrees with the issue.

When the term licensee is used in the issues listed below, it refers,

as applicable, to licensees, vendors, and other persons subject to NRC

enforcement actions.

Comments may be provided in hard copy or through the NRC electronic

bulletin board( BBS). Instructions for accessing the NRC BBS are

provided in the ADDRESSES section above.

Following evaluation of the comments, the Review Team may hold a

public meeting in the Washington, D.C. area for the purpose of

clarifying comments. In that regard, commenters are requested to

indicate whether they would desire to participate in a public meeting.

It is expected that the Review Team would invite specific commenters to

participate on panels of commenters with similar views. If a meeting is

to be held, it will be announced in the Federal Register and on the NRC

BBS.

Comments are requested on the following specific issues:

A. Purpose and Objectives of the NRC Enforcement Program

1. Is the purpose of the enforcement program stated above the

proper area of focus for the NRC enforcement program? If not, why not

and what should the purpose be?

2. Are the four objectives of the NRC enforcement program stated

above (i.e., ensuring compliance, obtaining corrective action,

deterring future violations, and encouraging improved performance of

other licensees and vendors) appropriate? If not, why not and what

should the objectives be?

3. Does the enforcement program as implemented achieve the stated

purpose and objectives? Explain why or why not.

(a) Are enforcement sanctions effective in obtaining comprehensive

and lasting corrective action, i.e., does the time and effort spent in

developing responses to enforcement actions result in a more thought

out approach for corrective action and implementation of that action

than would otherwise occur?

(b) Do some types of sanctions result in more extensive,

comprehensive, or lasting corrective action than others?

(i) If so, which types of sanctions are more effective than others,

i.e., (a) Notices of Violation at Severity Level V, at Severity Level

IV with and without a civil penalty, at Severity Level III with and

without a civil penalty, at Severity Level II with and without a civil

penalty, and at Severity Level I with and without a civil penalty, and

(b) orders?

(ii) If so, why? For example, do some sanctions get more management

attention than others, i.e., do all senior licensee officials, such as

the Vice Presidents, President, Chief Executive Officer or Board of

Directors, get copies of every sanction including non-cited violations,

or do senior officials only get copies of certain types of sanctions

such as civil penalties or orders, or for that matter do they get

copies at any time?

(iii) If not, what changes could be made to improve corrective

action?

(c) Has the NRC's past use of sanctions created deterrence, i.e.,

does the threat of sanctions contribute to the desire to maintain

compliance?

(i) If not, what changes could be made to provide more deterrence?

(ii) Commenters are requested to address the deterrence value of

each type of sanction: (a) Notices of Violation at Severity Level V, at

Severity Level IV with and without a civil penalty, at Severity Level

III with and without a civil penalty, at Severity Level II with and

without a civil penalty, and at Severity Level I with and without a

civil penalty, and (b) orders.

(iii) To what extent does the issuance of press releases contribute

to the deterrence?

(iv) Should press releases be issued for Notices of Violation,

Confirmatory Action Letters, Demands for Information as well as civil

penalties and orders? If not, why not?

(d) Do NRC sanctions against particular licensees result in

improving the general performance of the regulated industry by

encouraging other licensees to take actions to prevent or identify and

correct similar violations at their facilities after learning of the

violations and sanctions imposed on other licensees?

(i) Licensee commenters should address whether they are normally

aware of enforcement actions issued against other licensees at the

level of (1) non-escalated Notices of Violations, (2) escalated Notices

of Violations without civil penalties, (3) civil penalties, and (4)

orders.

(ii) If commenters are aware of enforcement actions issued against

other licensees, how do they become aware of them (e.g, NUREG 0940,

``Enforcement Actions: Significant Actions Resolved,'' NRC Information

Notices, NMSS Newsletters, press releases, law firm news letters,

industry newsletters such as Inside NRC or Nucleonics Weekly, NRC

inspectors, Federal Register, or other sources)? Should NRC consider

better ways to provide licensees and vendors with information about NRC

enforcement actions such as use of an electronic bulletin board or an

enforcement newsletter?

(iii) If commenters are aware of enforcement actions issued against

other licensees, is the information from those actions used to improve

performance? How is it used to achieve better performance (e.g.,

discussed during staff meetings, incorporated into training, or made

the subject of required reading)?

4. Agency-wide (i.e., from region to region) consistency and

predictability in the nature and type of sanctions have been important

considerations in developing enforcement sanctions. As a result, the

Enforcement Policy has become substantially more detailed since the

initial policy was published in 1980. While flexibility is provided,

deviations from the norms of the Enforcement Policy require approval or

consultation with senior NRC officials, and in some cases, the

Commissioners.

(a) If the enforcement program as implemented does not provide an

appropriate degree of consistency and predictability, what are the

problem areas and what changes could be made for improvement in this

area?

(b) Should the Enforcement Policy be simplified and allow for more

staff judgement and issuance of enforcement actions with less

management review? If so, provide examples where changes could be made.

If so, why and how?

5. When developing enforcement sanctions, how should the NRC

attempt to balance punishment and incentives? [Note: this question

addresses issuance of sanctions in general, questions on issuance of

civil penalties are addressed in section E. of this notice.] Comments

are requested on whether the remedial value of enforcement would be

improved by:

(a) Basing sanctions solely on the occurrence of the violation and

its technical and regulatory significance to maximize the incentive to

discourage violations from occurring. Under this approach, in

formulating a sanction, NRC would consider whether the violation

occurred, but would not consider whether the licensee identified the

violation and corrected it and would not consider the licensee's past

performance, i.e., some or all sanctions would be issued somewhat like

a traffic ticket. For example, an overexposure would have a fixed

penalty for a given type of licensee. Commenters who favor this

approach should address the question of whether this approach would

tend to discourage licensees and employees from identifying violations

that are not self disclosing and broadly correcting violations as those

actions would not affect the sanction.

(b) Basing sanctions solely on the licensee's response to the

violation. Under this approach, NRC would not issue a sanction if the

licensee promptly identified, reported it if required, and promptly and

comprehensively corrected the violation; that is the NRC would not

consider past performance, duration, multiple occurrences, prior

opportunities to identify and correct the violation earlier if the

licensee identified and corrected the violation prior to NRC

identifying the violation, the NRC scheduling an announced inspection

in the area that encompasses the violation, or an event that disclosed

the violation. Commenters who favor this approach should address the

question of whether this approach would reduce the incentives to

identify violations, including responding to opportunities to identify

potential violations, or assuring lasting corrective action because the

licensee may take the risk that NRC might not identify the violation as

a result of the limited, audit nature of the NRC inspection program.

How should reporting of a violation be considered? For example, should

full mitigation be allowed if a violation was not reported?

(c) Basing sanctions on a combination of approaches (a) and (b)

above, similar to the current NRC approach. Commenters who favor this

approach should address which factors should be included in

establishing sanctions and the weight that might be appropriate for

each factor.

6. The Enforcement Policy is intended to provide regulatory

messages to improve performance such as encouraging identification of

violations, being responsive to information that may suggest the need

to take action to determine the existence of a violation, taking

prompt, comprehensive and lasting corrective action, and addressing

performance problems.

(a) Does the enforcement correspondence that transmits the

enforcement actions adequately convey the above messages?

(b) Does the enforcement correspondence that transmits the

enforcement actions adequately convey the significance the NRC places

on the violations, the areas where improvement in performance are

needed, and the reasons for the sanctions?

(c) Is the enforcement correspondence understandable? Should it be

simplified? If so, how?

7. Should there be different enforcement policies and procedures

(e.g., correspondence, enforcement conferences, inspection

documentation, civil penalty assessment factors) for large licensees,

such as power reactors and major fuel facilities, and for smaller

licensees? If so, how should the policies and procedures differ?

B. Severity Levels of Violations

Violations are normally categorized in terms of five levels of

severity to show their relative importance within a particular activity

area such as ``reactor operations'' or ``health physics.'' The level of

severity assigned is intended to be based on the violation's actual or

potential safety consequence and regulatory significance within the

selected activity area. Specific examples of severity levels for

particular violations are given in the Enforcement Policy supplements

to improve consistency and enhance the ability to apply the policy.

1. Should the NRC continue to use the existing severity levels to

categorize regulatory and safety significance of violations? If not,

why not and how should the Enforcement Policy be changed?

2. Is there a benefit to have both a Severity Level IV and V?

Should severity levels be used at all if violations are not associated

with a civil penalty?

3. Recognizing that not all violations are of equal significance,

are there sufficient examples to categorize the range of significance

of violations?

(a) Do the existing examples appropriately reflect significance? If

not, why not?

(b) If the existing examples are not sufficient, what other

examples should be included?

(c) Should the examples be revised to be more general? More

specific?

(d) Is sufficient flexibility provided to consider willfulness and

other circumstances? What circumstances not now considered should be

considered, if any, in establishing a severity level?

C. Enforcement Conferences

The Enforcement Policy provides that when the NRC learns of a

potential violation for which escalated enforcement action may be

warranted, the NRC normally provides the licensee an opportunity for an

enforcement conference prior to taking enforcement action. A conference

may also be held for a Severity Level IV violation if increased

management attention is warranted. The purpose of the conference is to

discuss the potential violations, their significance, the reason for

their occurrences including the root causes, and the licensee's

corrective actions. It provides NRC management an opportunity to

emphasize, directly with senior licensee management, the significance

of the violations and the need for effective lasting corrective action.

Also, the NRC uses the conference to determine whether there were any

aggravating or mitigating circumstances, and to obtain any other

information, including whether the licensee questions the findings of

the inspection, which may assist in determining the appropriate

enforcement action.

Enforcement conferences are not routinely open to the public.

(However, a trial program to open about 25 percent of the conferences

to the public is currently underway. See footnote 2)

1. Do enforcement conferences serve the purposes stated above? If

not, how can they be improved?

2. What are the benefits and weaknesses of conducting enforcement

conferences?

3. In deciding whether to hold a conference, should the NRC

consider whether the licensee desires to attend a conference?

4. Is the current criteria used to hold a conference appropriate?

If not, when should conferences be held?

5. Recognizing that apparent violations may be reconsidered

following an enforcement conference, should NRC continue the practice

of issuing inspection reports that address the apparent violations

prior to an enforcement conference?

6. Enforcement conferences are normally held in regional offices.

Should this continue, or should they be held closer to the facility of

the licensee?

7. As to open enforcement conferences:

(a) Have open enforcement conferences affected NRC performance

during the conference? If so, how?

(b) Have open enforcement conferences impacted the licensee's

participation in the conference? If so, how?

(c) Have open conferences impacted the licensees' cost of

participating at conferences? If so, how? If more preparation is

required, how substantial is that preparation and why should the

presence of public attendance impact the licensee's presentation?

(d) Has the public benefited from the ability to observe

enforcement conferences?

(e) Should all enforcement conferences be transcribed with the

transcript subsequently made public? For those who oppose open

conferences, would that be a viable alternative to open enforcement

conferences?

(f) The NRC staff in Rockville, Maryland frequently participates in

closed enforcement conferences held in the region by telephone.

(i) Is that appropriate for open conferences?

(ii) Should the public be allowed to listen by telephone to open

conferences?

(g) Should open enforcement conferences be made a permanent part of

the enforcement program?

8. Are there circumstances where a Demand for Information may be an

appropriate substitution for an enforcement conference? If so, what

circumstances should be considered?

D. Notices of Violations

The policy of the Commission has been to formalize the occurrence

of a violation by issuance of a Notice of Violation and by requiring

documented corrective action.

1. There are circumstances provided in the Enforcement Policy for

not issuing a formal notice of violation to provide incentives for

identification and corrective action for violations at Severity Level

IV, as well as to save both NRC and licensee resources for violations

at Severity Level V. In general where the licensee has identified a

non-recurring violation at Severity Level IV and taken appropriate

corrective action, the inspection finding is documented in the

inspection report and closed out as a ``non-cited violation,'' with no

written response required.

(a) Should the circumstances for use of non-cited violations be

changed to cover more situations or fewer (including different severity

levels)? If so, explain.

(b) Does the use of non-cited violations contribute to providing an

incentive for identifying and correcting violations or does it have the

same negative impact as a cited violation in a Notice of Violation?

(c) Should non-cited violations be treated any differently from a

cited violation when considering compliance history in the

deliberations on the appropriate regulatory response to a subsequent

violation? If so, explain.

(d) Should NRC continue to use non-cited violations?

(e) If non-cited violations should not be used in the future, how

should the NRC disposition findings in an inspection report that

provides sufficient detail to demonstrate that a violation occurred?

How should NRC track these findings and what should they be called?

2. Is there any purpose to issuing Notices of Violations at

Severity Level V? Should all such violations be treated as non-cited

violations?

3. Should all Notices of Violations require a written response? If

not, what should the documentation requirements be for corrective

action? What access rights should be given to the public to review the

documentation?

4. The materials program utilizes NRC Form 591, `` Safety

Inspections,'' which an inspector may use to document certain

violations and after the licensee signs the form stating that

corrective action will be taken within 30 days, serves as a Notice of

Violation. Form 591 is intended to be issued by the inspector directly

to the licensee without further agency review at the conclusion of the

inspection.

(a) Should this process be expanded to cover fuel cycle and reactor

licensees?

(b) Should this process be expanded to cover other enforcement

sanctions?

E. Civil Penalties

A civil penalty is a monetary penalty that may be imposed for

certain violations. Civil penalties are intended to emphasize the need

for lasting remedial action, and to deter future violations both by the

licensed party and by other licensees conducting similar activities.

The base civil penalty amounts have not been changed since the

early 1980's. To maintain a constant dollar amount for civil penalties,

adjustment for inflation would increase the current amounts by more

than 60 percent. For smaller licensees, a civil penalty may be a

deterrent because of the financial impact; for power reactor licensees,

the current civil penalty amounts are of little financial impact, but

may have a deterrent effect through the adverse publicity that attends

the issuance of a civil penalty.

1. Should civil penalties continue to be part of the NRC regulatory

process? If not, why not? How and when should they be used?

2. Have civil penalties been effective in improving compliance and

providing deterrence? If so, why? If not, why not?

3. The Review Team on Reassessment of the NRC's Program for

Protecting Allegers Against Retaliation concluded that higher civil

penalties are appropriate and recommended a statutory amount of

$500,000. The legislative history for section 234 of the Atomic Energy

Act does not provide a specific basis for the current statutory amount

of $100,000. The recommendation of that Review Team was based on the

average cost of a day of replacement power for a power reactor. The

recommended increase was intended to provide a more financially

relevant penalty and provide for a greater spread of penalty amounts

among the severity levels. (See, NUREG 1499 at page II.D-5-6)

(a) Given that significant violations continue to be identified,

and that civil penalties are intended to have a punitive aspect, would

higher civil penalties provide a greater incentive for compliance for

the larger licensees regulated by the Commission?

(b) Should the statutory amount of civil penalties be increased? If

so, to what extent? If not, why not?

(c) Since the civil penalty amount in Section 234 of the Atomic

Energy Act was last amended in 1980, there has been considerable

inflation. Should the base civil penalties be indexed for inflation?

(d) Should the civil penalty amount take into consideration the

costs associated with an enforcement action including the cost of the

investigation and processing the action?

4. Should the amount of the penalty be normally based solely on the

existence of the violation similar to a traffic ticket? If so, why? If

not, why not?

(a) If not, are there some violations such as overexposures to

workers, releases of radioactive material, exposures to members of the

public, failure to use survey instruments by radiographers, etc, where

civil penalties should be assessed without regard to adjustment

factors? If not, why not?

(b) Does it matter whether a penalty is increased or decreased from

the base amount, or is the existence of a penalty the controlling

factor?

5. Should the penalty consider contributing factors, such as the

root cause of or the licensee's response to the violation? If so, why?

If not, why not?

6. The current adjustment factors are designed to encourage good

performance (e.g., prompt identification, prompt and comprehensive

corrective action, and evidence of past lasting corrective action) and

deter poor performance (e.g., lack of identification and prompt or

comprehensive corrective action, not being responsive to opportunities

to identify violations, and not taking lasting corrective action). The

NRC expends considerable effort to adjust civil penalties to provide an

appropriate regulatory message.

(a) Should the current civil penalty adjustment factors continue to

be used? If not, why not and which factors should be deleted or what

factors should be added?

(b) Do the current adjustment factors provide the intended

incentives or deterrence? If not, please explain.

7. Comments are requested on the use of the specific factors.

(a) Should there be any mitigation for self-disclosing events where

the violation is relatively obvious, i.e., given the event, the

licensee really has no choice but to pursue it to determine the cause?

If not, why not? If so, why?

(b) Should mitigation be allowed for corrective action, if the

individuals responsible for the violations, assuming adequate

resources, training, procedures, and supervision, have not been

appropriately disciplined? How extensive should corrective action be to

permit mitigation?

(c) Since enforcement should be designed to influence performance,

should past poor performance be considered and cause penalties to be

increased if current performance is good, i.e., the licensee identifies

and corrects the particular violation assuming recent performance

(e.g., six months) has been good and there has not been a failure to be

responsive to opportunities of prior notice? Similarly, should past

good performance be considered and cause penalties to be lowered where

current performance is not good, i.e. the licensee does not identify

and corrects the violations?

(d) The Atomic Energy Act provides that each day a violation

continues shall be considered a separate violation for assessing a

civil penalty. The longer a violation exists the likelihood of a

consequence increases. Should duration be routinely considered if a

civil penalty would otherwise be assessed? If not, why not and how

should duration be factored into the amount of the penalty?

(e) Should prompt, comprehensive corrective action by the licensee

be sufficient to warrant full mitigation of the civil penalty,

regardless of the other factors such as prior performance, duration,

prior opportunities, and lack of identification or reporting?

(f) Should there be civil penalties if the licensee identifies and

promptly and comprehensively corrects a violation? If so, how should

factors such as repetitive violations, past poor performance, prior

opportunities to have identified the violation earlier, multiple

examples and duration be considered?

(g) Reporting is not currently considered as an assessment factor

and reporting failures are considered for enforcement separate and

apart from the matter not reported. How should reporting issues be

considered?

(i) Should there be full mitigation if a licensee identifies a

violation associated with a reportable matter, when the report is not

properly made?

(ii) Should reporting a violation be considered a separate

mitigating factor? If so, should mitigation be allowed where the matter

reported was required to be reported since not to do so would be a

separate violation subject to a separate sanction?

(iii) Should there be a separate sanction for reporting failures

apart from the violation not reported?

(h) In applying the factors of past performance and prior

opportunities to identify violations, over what time period should

these factors be considered (e.g., events that occurred two years prior

to the violation for which the current sanction is being considered)?

(i) Is it appropriate to consider the same facts in determining the

existence of a violation, its severity level, and in the application of

the assessment factors (e.g., in a corrective action violation

escalating a penalty for opportunities to correct a matter earlier and

considering the delay as added significance in establishing the

severity level)? If not, why not?

8. The Enforcement Policy provides some flexibility in applying the

adjustment factors but it does provide specified percentages to limit

the application of the factors.

(a) Should the Enforcement Policy be changed to permit

consideration of factors without providing specified percentages that

should be used for the assessment? If not, why not?

(b) If so, should there be any outer limit other than the statutory

maximum per violation?

(c) The deletion of percentages will permit greater judgement and

flexibility to arrive at an appropriate penalty. Will this create a

concern for consistency and predictability?

9. Regional Administrators have been delegated the authority to

issue civil penalties for certain materials cases without review by the

Office of Nuclear Materials, Safety and Safeguards, Office of

Enforcement, or the Office of General Counsel.

(a) Should delegation be similarly considered for certain reactor

cases? If so, what cases warrant such delegation and why? If delegation

is not appropriate, why not?

(b) Are there some violations for which the inspector or section

chief should be allowed to issue proposed civil penalties without

further agency review? ( See question D.4)

10. The Enforcement Policy in Table I.A establishes base civil

penalties for different types of licensees. In developing the table it

was intended that generally, operations involving greater nuclear

inventories and greater potential consequences to the public and

licensee employees would receive higher civil penalties and that the

amounts, as a secondary factor, would reflect an ability to pay the

penalty. Table I.A does not reflect that for a given type of licensee

there can be a wide range in sizes, abilities to pay, and potential

hazards (e.g., large broad base hospitals in comparison to small rural

community hospitals, large research reactors in comparison to very

small reactors, or nation wide radiographer firms in comparison to one

person radiographer firms).

(a) Should Table I.A reflect different sizes of licensees and

different hazards for a given type of licensee? If so, how should this

be considered and reflected in the Enforcement Policy?

(b) Are the categories of licensees listed in Table I.A

appropriate? If not, what changes should be made and why?

(c) Are the base civil penalties amounts in Table I.A of the

Enforcement Policy appropriate for the different types of licensees? If

not, what changes should be made and why?

(d) Are the percentages listed in Table I.B appropriate for the

different severity levels (e.g., 80 percent of the base civil penalty

for a Severity Level II violation)? If not, what changes should be made

and why?

F. Orders and Confirmatory Action Letters

An order is a written NRC directive to modify, suspend, or revoke a

license, or cease and desist from a practice or activity. A

Confirmatory Action Letter is a document that reflects commitments made

by a licensee which may in some cases reflect significant obligations.

Unlike an order, it does not create legal obligations other than a

reporting requirement if an obligation is not met.

1. Should orders be used to a greater or lesser extent than at

present?

2. Should Confirmatory Action Letters be used to a greater or

lesser extent than at present?

3. Under what circumstances should a Confirmatory Action Letter be

used as a substitute for an order?

4. Are licensees actions in response to Confirmatory Action Letters

different from orders? Do licensees treat them differently?

G. Exercise of Discretion

The Enforcement Policy in Section VII. A and B provides guidance on

when to exercise discretion, and either escalate or mitigate

enforcement sanctions, to ensure that the resulting enforcement action

appropriately reflects the level of NRC concern, and conveys the

appropriate regulatory message to the licensee. [Note, the enforcement

review is not addressing section VII.C. of the Enforcement Policy

entitled, ``Exercise of Discretion for an Operating Reactor'' that

addresses ``Notices of Enforcement Discretion.'']

1. Is the guidance provided for exercise of discretion adequate?

2. Should there be additional examples where discretion should be

exercised? For example, should facilities that are recognized by the

NRC to be poor performers (sometimes referred to as plants on the

``watch list'' or ``problem plant list'') continue to be subject to

civil penalties during the period of time it takes to improve their

performance which normally takes some time to achieve? Should such

discretion be exercised even if an average performer with the same

violations would receive a civil penalty? Should the response be

dependent on whether the plant is shut down or operating? Should the

response be dependent on whether the licensee or the NRC identifies the

violation?

H. Timeliness of Enforcement Actions

The NRC attempts to issue routine escalated enforcement actions

within eight weeks of identification of the potential enforcement

issue. An enforcement conference is typically held within four weeks of

completion of an inspection.

1. Are these timeliness guidelines for issuance of escalated

enforcement actions appropriate?

2. Enforcement conferences are usually scheduled at the convenience

of the NRC in the interest of timely enforcement actions. In scheduling

enforcement conferences, should NRC schedule them at the mutual

convenience of both the NRC and licensee even if it delays the

enforcement action, assuming that the delays are not unreasonable?

3. Some enforcement cases take considerably longer than the eight

week goal noted above. Has such delay substantially impacted licensees?

Is such delay a significant concern? Explain.

4. If the time to process an escalated enforcement action should be

reduced, should it be done at the expense of omitting review by the

Office of General Counsel, Office of Enforcement, or the appropriate

program office?

I. Violations Involving Willfulness and Actions Against Persons for

Wrongdoing

The NRC's Enforcement Policy identifies willful violations to be of

particular concern, and provides for escalation of the severity level

of a violation based on willfulness.

1. Does the Enforcement Policy appropriately reflect the

significance of willful violations? If not, how should the Policy be

changed to better reflect the significance of willful violations?

2. Is sufficient guidance provided for developing sanctions against

licensees for willful violations? If not what additional guidance or

criteria would be appropriate?

3. Is sufficient guidance provided for developing consistent

sanctions against individuals for wrongdoing? If not, what additional

guidance or criteria would be appropriate?

4. NRC focuses its enforcement actions on licensees. Normally the

NRC when it issues sanctions to licensees' employees, contractors or

other agents, also issues sanctions to licensees. Should the NRC issue

enforcement actions to licensees when sanctions are also issued to

their employees, contractors or other agents? If not, why not, and

under what circumstances should action not be taken against licensees

for the actions of others?

5. Should orders be used more frequently against individuals who

violate the rule on deliberate misconduct (e.g., 10 CFR 30.10, 40.10,

and 50.5)? Does the potential for the use of such orders increase

accountability by employees and contractors? Do employees and

contractors appreciate that they may be subject to direct action by the

NRC?

6. Should the NRC use civil penalties against individual wrongdoers

who violate regulations such as 10 CFR 30.10 and 10 CFR 50.5 in lieu of

orders which impact the employees' livelihood?

7. A Letter of Reprimand is used to notify an individual of a

violation when a formal sanction is not warranted. Should a Letter of

Reprimand be used rather than a more formal action such as a Notice of

Violation or an order where the individual has willfully violated a

requirement? If so, under what circumstances? For example, should it be

used in cases where a relatively low level employee has been fired as a

result of the violation and the employee appears to be candid and

remorseful.

8. If a criminal sanction is issued against an employee or agent of

a licensee who caused the violation, should civil sanctions be issued

against the licensee who is licensed by the NRC for the activity?

9. The Enforcement Policy also states that civil penalties are

considered for all willful violations. However, to encourage licensees

to identify willful violations and to take strong remedial actions to

demonstrate the seriousness of such violations to other employees and

contractors thereby creating a deterrent effect, discretion may be

exercised for certain willful violations at Severity Level IV or V. Is

this consistent with the seriousness of willful violations and should

this policy be continued? Should it be expanded to other severity

levels?

J. Additional Comments

In addition to the above specific issues, commenters are invited to

provide any other views on the NRC enforcement program which may assist

the NRC in improving the effectiveness of NRC enforcement efforts.

Dated at Rockville, Maryland, this 16th day of August 1994.

For the Nuclear Regulatory Commission.

James Lieberman,

Director, Office of Enforcement.

[FR Doc. 94-20618 Filed 8-22-94; 8:45 am]

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