Northeast Nuclear Energy Company (Millstone Nuclear Power Station Units 1, 2 and 3); Order Requiring Independent, Third-Party Oversight of Northeast Nuclear Energy Company's Implementation of Resolution of Millstone Station Employees' Safety Concerns

NUCLEAR REGULATORY COMMISSION

[Docket Nos. 50-245, 50-336, and 50-423; License Nos. DPR-21, DPR-65,

and NPF-49]

Northeast Nuclear Energy Company (Millstone Nuclear Power Station

Units 1, 2 and 3); Order Requiring Independent, Third-Party Oversight

of Northeast Nuclear Energy Company's Implementation of Resolution of

Millstone Station Employees' Safety Concerns

I

Northeast Nuclear Energy Company (Licensee) is the holder of

Facility Operating License Nos. DPR-21, DPR-65, and NPF-49 issued by

the Nuclear Regulatory Commission (NRC or Commission) pursuant to Title

10 of the Code of Federal Regulations (10 CFR) Part 50 on October 31,

1986,1 September 26, 1975, and January 31, 1986, respectively. The

licenses authorize the operation of Millstone Units 1, 2 and 3 in

accordance with conditions specified therein. All three facilities are

located on the Licensee's site in Waterford, Connecticut.

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

\1\ Millstone Unit 1 was issued its provisional operating

license on October 7, 1970, and commenced operation on March 1,

1971. This unit received a full term operating license on October

31, 1986.

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

II

Over the past several years, the Licensee's management has failed

to ensure compliance with regulatory requirements. In an attempt to

address this compliance problem, the NRC issued an Order on August 14,

1996 establishing independent, third-party oversight of corrective

actions for design and plant operation deficiencies. The August 14,

1996 Order, directing the implementation of an Independent Corrective

Action Verification Program (ICAVP) for the Millstone facilities,

summarizes the Licensee's failures to meet Criterion XVI of Appendix B

to 10 CFR Part 50 and other NRC requirements. The August 14, 1996 Order

also outlines what the NRC found to be ineffective implementation of

the Licensee's oversight programs, including its NRC-approved quality

assurance (QA) program. The purpose of the ICAVP is to provide

independent verification, for selected systems, that the Licensee's own

Configuration Management Plan (CMP) has identified and resolved

existing problems, documented and utilized licensing and design bases,

and established programs,

[[Page 58254]]

processes, and procedures for effective configuration management in the

future.

This Order addresses past failures in management processes and

procedures for handling safety issues raised by employees, and in

ensuring that the employees who raise safety concerns are not

discriminated against. As discussed below, the Commission is concerned

about the manner in which the Licensee has treated employees who

brought safety and other concerns to the attention of the Licensee's

management. As evidenced by the large number of deficiencies currently

being identified at all three Millstone plants, it appears that some

employees have been reluctant to identify safety issues. Both the NRC

and the Licensee rely on a defense-in-depth approach to ensuring

safety. The persistence of an environment where employees are reluctant

to raise safety concerns can erode the safety-consciousness of the

work-place and, thereby, can affect safety. As the Commission has

stated, it expects that licensees will establish and maintain a safety-

conscious work environment in which employees feel free to raise

concerns both to their own management and the NRC without fear of

retaliation, and in which such concerns are promptly reviewed, given

the proper priority based on their potential safety significance, and

appropriately resolved with timely feedback to employees. Such an

environment is critical to a licensee's ability to safely carry out

licensed activities 2 in the work-place; thus it can affect

safety.

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

\2\ Freedom of Employees in the Nuclear Industry to Raise Safety

Concerns Without Fear of Retaliation; Policy Statement, 61 FR 24336

(May 14, 1996). The attributes of a safety-conscious environment are

described in the Policy Statement.

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

Over the past several years, numerous Licensee assessments, audits,

and internal task group studies have been conducted to assess employee

safety concerns programs at the Millstone Station.

In January 1996, the Licensee completed a review 3 of the

effectiveness of its Nuclear Safety Concerns Program (NSCP) in taking

corrective actions related to employee concerns and ensuring that the

employees who raise concerns are treated appropriately. The findings of

the Licensee's 1996 review were similar to those of previous Licensee

assessments, studies, and audits performed since 1991. Some of the

common findings were that management (1) lacked accountability, (2)

inadequately resolved identified problems, and (3) tended to punish

rather than reward employees who raised safety concerns. The Licensee's

1996 study team found that many of these problems still exist, because

the Licensee had not implemented past recommendations in a coordinated

and effective manner. The review also found that a concurrent lack of

commitment to and accountability in implementing corrective actions had

resulted in a continuing failure to proactively resolve emerging

issues. It commented that this situation was compounded by the general

inability on the part of individual Licensee managers to admit when

they are in error. All of these factors have contributed to a strained

and ineffective relationship between management and some employees.

Finally, the study team concluded that the effectiveness of the NSCP

has been historically undermined by a lack of executive management

support.

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

\3\ Millstone Employee Concerns Assessment Team Report, dated

January 29, 1996.

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

In May 1996, the Nuclear Committee of the Licensee's Board of

Trustees established a Nuclear Committee Advisory Team (NCAT) to

evaluate the performance of the Licensee's nuclear program. A

Fundamental Cause Assessment Team (FCAT) was also formed to evaluate

whether management actions are effectively addressing the causes of

declining performance.

The FCAT identified 4 the following fundamental causes of the

decline in performance:

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

\4\ Report of the Fundamental Cause Assessment Team, dated July

12, 1996.

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

The top level of the Licensee's management did not

consistently exercise effective leadership and articulate and implement

appropriate vision and direction;

The nuclear organization did not establish and maintain

high standards and expectations; and

The nuclear organization's leadership, management, and

interpersonal skills were weak.

The NRC has also performed several assessments of the way that the

Licensee has dealt with technical and safety concerns raised at the

Millstone facilities and the manner in which the Licensee has treated

those employees who have raised safety concerns. On December 12, 1995,

the NRC staff initiated an historical review of both the Licensee's and

the NRC's handling of Millstone employee concerns and allegations,

covering the past 10 years.5 The staff's review included indepth

case studies of selected employees' concerns and allegations to

identify root causes, common patterns between cases, and lessons

learned. The Millstone Independent Review Group reported: 6

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

\5\ Millstone Independent Review Group--Handling of Employee

Concerns and Allegations at Millstone Nuclear Power Station, Units

1, 2, and 3. Prior NRC studies are discussed in this report.

\6\ Transcribed public meetings to report the review group

findings, held on August 7 and 8, 1996 in the vicinity of the plant.

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

1. A large number of allegations (an average of 42 per year) were

being raised to the NRC, which indicated that the Licensee's own

programs were not effective in resolving its employee concerns.

2. The Licensee's employees believed that the managers responsible

for discrimination were not appropriately disciplined.

3. The Licensee's management frequently identified problems but was

ineffective in implementing corrective actions.

4. The Licensee's management was reluctant to admit mistakes.

5. The Licensee's managers lacked skill in handling concerns and

were generally not supportive of their employees raising concerns.

There was a lack of communication along the chain of command and across

parallel organizational lines.

The Millstone Independent Review Group and the Licensee's recent

internal reviews have produced consistent findings for which corrective

actions have not yet been effectively implemented. It is clear that the

licensee has not established a safety-conscious environment.

III

In light of the foregoing, I have concluded that the Licensee must

take action to correct and improve its handling of safety concerns

raised by its employees so that the NRC can have confidence that

concerns will be acted on promptly and adequately, and that employees

who bring forth such concerns can do so without fear of retaliation or

retribution.

In this Order, the NRC directs that, prior to resumption of power

operations, the Licensee shall develop, submit to the NRC, and

implement a comprehensive plan for reviewing and dispositioning safety

issues raised by the Licensee's employees and ensuring that employees

who raise safety concerns are not subject to discrimination.

Additionally, the Licensee shall retain an independent third-party,

subject to the approval of the NRC, to oversee its implementation of

its comprehensive plan. The employees of the third-party organization

shall have unfettered site access after meeting the NRC's access

authorization requirements.

The independent third-party is to develop and submit for NRC

approval

[[Page 58255]]

an oversight plan. The independent third-party shall monitor and

oversee the Licensee's efforts to correct and prevent repetition of its

past failures in its treatment of employee concerns and of those

employees who raised such concerns. The oversight plan shall include

observation and monitoring of the Licensee's activities, performance of

technical and audit reviews, investigation of concerns, and assessment

of changes in the Licensee's treatment of employee concerns as compared

to past practices. This oversight must be comprehensive in scope and

cover all NRC-regulated activities at the Millstone facilities.

Recommendations are to be made to address the handling of specific

concerns as well as the Licensee's programs and processes for handling

concerns.

The qualifications of the independent third-party must include the

expertise necessary to audit technical reviews of employee concerns,

monitor corrective actions, recognize technical weaknesses in

approaches to concerns taken by the Licensee, audit and determine the

adequacy of the Licensee's investigations into harassment,

intimidation, and discrimination complaints, and conduct employee

surveys to determine the views of the Licensee's employees on the

success and completeness of these activities. The factors to be

examined by the independent organization include actions taken or to be

taken by the Licensee to create an environment in which employees of

both the Licensee and onsite contractors are encouraged to raise

concerns and the timeliness and thoroughness with which such concerns

are reviewed and resolved, including how employees are informed of

results. The third-party organization chosen to oversee the conduct of

the Licensee's comprehensive plan must be independent of the Licensee,

such that none of its members has had any direct, previous involvement

with the activities at the Millstone Station that the organization will

be overseeing.

The independent third-party is to report concurrently to the NRC

and Licensee, on at least a quarterly basis, the results of its

oversight activities, including all findings and recommendations.

After the NRC receives the Licensee's comprehensive plan and the

independent third-party oversight plan, a notice of availability of the

plans will be published in the Federal Register and one or more public

meetings will be held to allow members of the public to comment on the

plans. The results of the NRC review and public comments on the third-

party oversight plan will be forwarded to the Licensee and the

independent third-party for evaluation and implementation as

appropriate.

IV

Accordingly, pursuant to Sections 103, 161b, 161i, 161o, 182 and

186 of the Atomic Energy Act of 1954, as amended, and the Commission's

regulations in 10 CFR 2.202 and 10 CFR Part 50, It is hereby ordered

That, prior to restart of any Millstone units:

1. Within 60 days from the date of this Order, the Licensee shall

develop, submit for NRC review, and begin to implement a comprehensive

plan for (a) reviewing and dispositioning safety issues raised by its

employees and (b) ensuring that employees who raise safety concerns are

not subject to discrimination. The comprehensive plan shall address the

root causes of past performance failures as described in the Licensee's

July 12, 1996 report of the Fundamental Cause Assessment Team and the

NRC's September 1996 report of the Millstone Independent Review Group,

with the objective of meeting a goal of achieving a safety-conscious

environment.

2. Within 30 days from the date of this Order, the Licensee shall

submit, for NRC approval, a proposed independent, third-party

organization to oversee implementation of the above comprehensive plan.

The independent third-party shall be approved by the NRC and its

activities, under this Order, are subject to continuing NRC oversight.

The independent third-party shall oversee plan implementation by (a)

observing and monitoring the Licensee's activities; (b) performing

technical reviews; (c) auditing and investigating, when necessary,

cases of alleged harassment, intimidation, and discrimination; (d)

auditing and reviewing the Licensee's handling of employee safety

concerns; and (e) assessing and monitoring the Licensee's performance.

Within 30 days of the NRC's approval of the third-party, an oversight

plan for conduct of this third-party oversight shall be developed by

the third-party and forwarded for NRC review. NRC approval of the

oversight plan is required prior to its implementation. Reports on

oversight activities, findings, and recommendations shall be provided

to both the licensee and the NRC at least quarterly following NRC

approval of the oversight plan. The plan shall specify procedures for

concurrent reporting of oversight activities, findings, and

recommendations to the NRC and the Licensee. The Licensee will provide

a response to each recommendation. The Licensee's comprehensive plan

shall allow for revisions based upon the Licensee's experience in

implementation of its plan and comments and recommendations of the

independent third-party and/or the NRC.

3. If the independent third-party receives allegations of safety

concerns, it is to encourage the alleger to bring those concerns to the

attention of the Licensee. If the alleger elects not to do so, the

independent third-party is to encourage the alleger to report the

concerns to the NRC. If the alleger does not elect to report the safety

concerns to either the Licensee or the NRC, the independent third-party

is to accept the allegation and forward it directly to the NRC. The

independent third-party is to develop procedures for protecting the

identity of any such allegers and limiting the disclosure of the

allegers' identity to those with a need to know.7

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

\7\ Such procedures may not withhold the identity of any alleger

or any information related to allegations from the NRC.

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

4. The plan for independent, third-party oversight will continue to

be implemented until the Licensee demonstrates, by its performance,

that the conditions which led to the requirement of that oversight have

been corrected to the satisfaction of the NRC.

V

The Director, Office of Nuclear Reactor Regulation, may, in

writing, relax or rescind this Order upon demonstration by the Licensee

of good cause.

VI

In accordance with 10 CFR 2.202, the Licensee must, and any other

person adversely affected by this Order may, submit an answer to this

Order, and may request a hearing on this Order, within 20 days of the

date of this Order. Where good cause is shown, consideration will be

given to extending the time to request a hearing. A request for

extension of time must be made in writing to the Director, Office of

Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission,

Washington, D.C. 20555, and include a statement of good cause for the

extension.

The Licensee's answer may consent to this Order. Unless the answer

consents to this Order, the answer shall, in writing and under oath or

affirmation, specifically admit or deny each allegation or charge made

in this Order and set forth the matters of fact or law on which the

Licensee or any other person adversely affected relies and the reasons

as to why the Order should not

[[Page 58256]]

have been issued. Any answer or request for a hearing shall be

submitted to the Director, Office of Nuclear Reactor Regulation, U.S.

Nuclear Regulatory Commission, Washington, D.C. 20555, with a copy to

the Commission's Document Control Desk, Washington, D.C. 20555. Copies

shall also be sent to the Assistant General Counsel for Hearings and

Enforcement at the same address, to the Regional Administrator, NRC

Region I, 475 Allendale Road, King of Prussia, PA 19406-1415; and to

the Licensee if the answer or hearing request is by a person other than

the Licensee. If such a person requests a hearing, that person shall

set forth with particularity the manner in which his or her interest is

adversely affected by this Order and shall address the criteria set

forth in 10 CFR 2.714(d).

If a hearing is requested by the Licensee or a person whose

interest is adversely affected, the Commission will issue an Order

designating the time and place of any hearing. If a hearing is held,

the issue to be considered at such hearing shall be whether this Order

shall be sustained.

In the absence of any request for a hearing, or written approval of

an extension of time in which to request a hearing, the provisions

specified in Section IV above shall be effective and final 20 days from

the date of this Order without further Order or proceedings. If an

extension of time for requesting a hearing has been approved, the

provisions specified in Section IV shall be final when the extension

expires if a hearing request has not been received.

Dated at Rockville, Maryland, this 24th day of October 1996.

For the Nuclear Regulatory Commission.

Frank J. Miraglia, Jr.,

Acting Director, Office of Nuclear Reactor Regulation.

[FR Doc. 96-28996 Filed 11-12-96; 8:45 am]

BILLING CODE 7590-01-P