[Federal Register: January 13, 1998 (Volume 63, Number 8)]
[Notices]               
[Page 1982-1985]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13ja98-71]

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NUCLEAR REGULATORY COMMISSION

[NUREG-1600]

 
Policy and Procedure for Enforcement Actions; Deliberate 
Misconduct Rule

AGENCY: Nuclear Regulatory Commission.

ACTION: Policy statement: Amendment.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is amending its 
``General Statement of Policy and Procedure for NRC Enforcement 
Actions'' to conform to modifications to the Deliberate Misconduct 
Rule. These modifications extend that Rule to applicants for NRC 
licenses, applicants for, and holders of, certificates of compliance, 
early site permits, standard design certifications, or combined 
licenses issued under part 52, applicants for or holders of 
certificates of registration, quality assurance approvals, and the 
employees, contractors, subcontractors, and consultants of those 
persons. By a separate action published in this issue of the Federal 
Register, the Commission has issued a final rule amending 10 CFR parts 
30, 32, 40, 50, 52, 60, 61, 70, 71, 72, 110, and 150.

EFFECTIVE DATE: This action is effective on February 12, 1998.

FOR FURTHER INFORMATION CONTACT: James Lieberman, Director, Office of 
Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555-
0001, (301) 415-2741.

SUPPLEMENTARY INFORMATION: The Commission's ``General Statement of 
Policy and Procedure for NRC Enforcement Actions'' (Enforcement Policy 
or Policy) was first issued on September 4, 1980. Since that time, the 
Enforcement Policy has been revised on a number of occasions. On June 
30, 1995 (60 FR 34381), the Enforcement Policy was revised in its 
entirety and was also published as NUREG-1600. The Policy primarily 
addresses violations by licensees and certain non-licensed persons, as 
discussed further in footnote 3 to Section I, Introduction and Purpose, 
and in Section X: Enforcement Action Against Non-licensees.
    The Deliberate Misconduct Rule was adopted in September 1991 and 
applies to any licensee or any employee of a licensee; and any 
contractor (including a supplier or consultant), subcontractor, or any 
employee of a contractor or subcontractor, of any licensee. The 
Deliberate Misconduct Rule placed licensed and unlicensed persons on 
notice that they may be subject to enforcement action for deliberate 
misconduct that causes or would have caused, if not detected, a 
licensee to be in violation of any of the Commission's requirements, or 
for deliberately providing to the NRC, a licensee, or contractor, 
information that is incomplete or inaccurate in some respect material 
to the NRC.
    The final rulemaking expands the Deliberate Misconduct Rule, where 
it appears in 10 CFR parts 30, 40, 50, 60, 61, 70, 72, and 110, 
clarifies the scope of part 32 and adds the Rule to parts 52 and 71. 
This expansion arises out of a realization that the current Rule does 
not apply to applicants for NRC licenses, applicants for, or holders 
of, certificates of compliance, early site permits, standard design 
certifications, or combined licenses issued under part 52, applicants 
for or holders of certificates of registration, quality assurance 
program approvals and the

[[Page 1983]]

employees, contractors, subcontractors, and consultants of those 
persons. The Commission believes that it is equally important for these 
categories of persons to be subject to enforcement action for 
deliberate wrongdoing, such as the submission of inaccurate or 
incomplete information.
    The Commission is making this change to the General Statement of 
Policy and Procedure for NRC Enforcement Actions to make it consistent 
with the regulations. The changes include: (1) Expansion of footnote 3 
in Section I, which discusses the scope of the Policy; (2) deletion of 
the reference to vendors in Section VI.C.5, to avoid possible confusion 
as a result of a partial listing of those to whom the Rule and Policy 
apply; and (3) restating the opening sentence in Section VI.C.5 and in 
Section X: Enforcement Actions Against Non-licensees, to set out the 
full scope of the Rule and its application through the Enforcement 
Policy.
    The Commission has held that the term ``contractor'' includes a 
vendor or supplier that manufactures and offers for sale materials 
intended for use by NRC licensees and certified to meet the 
requirements of 10 CFR part 50, Appendix B. In the Matter of: Five Star 
Products, Inc. and Construction Products Research, Inc., 38 NRC 169, 
CLI-93-23 (October 21, 1993). In light of that holding, the remaining 
references to vendors throughout the Enforcement Policy are also being 
modified to refer to contractors as the inclusive term. These changes 
are being made in Sections V, VI.B.1, VI.C, VI.D, VIII, X, Table 1A, 
and Supplements I.C. and VII.C.

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, Office of Management and Budget.
    Accordingly, Sections I, V, VI B., C., and D., VIII, X, and 
Supplements I and VII of the NRC Enforcement Policy are amended to read 
as follows:

General Statement of Policy and Procedure for NRC Enforcement 
Actions

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:
    <bullet> As a deterrent to emphasize the importance of compliance 
with requirements, and
    <bullet> 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,<SUP>2</SUP> and their employees, who do not achieve the 
necessary meticulous attention to detail and the high standard of 
compliance which the NRC expects.<SUP>3</SUP> Each enforcement action 
is dependent on the circumstances of the case and requires the exercise 
of discretion after consideration of these policies and procedures. In 
no case, however, will licensees who cannot achieve and maintain 
adequate levels of protection be permitted to conduct licensed 
activities.
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    \2\ The term ``contractor'' as used in this policy includes 
vendors who supply products or services to be used in an NRC-
licensed facility or activity.
    \3\ This policy primarily addresses the activities of NRC 
licensees and applicants for NRC licenses. 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 certificates and the employees of these non-
licensees. Specific guidance regarding enforcement action against 
individuals and non-licensees is addressed in Sections VIII and X, 
respectively.
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* * * * *

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.
* * * * *
    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.
* * * * *

VI. Enforcement Actions

* * * * *

VI. B. 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

[[Page 1984]]

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.
* * * * *

                     Table 1A.--Base Civil Penalties                    
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                *         *         *         *         *               
  c. Test reactors, mills and uranium conversion facilities,            
   contractors, waste disposal licensees, and industrial                
   radiographers.............................................    $11,000
                *         *         *         *         *               
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* * * * *

C. Orders

* * * * *
    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.
* * * * *

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.
* * * * *

VIII. Enforcement Actions Involving Individuals

* * * * *
    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:
    <bullet> Willfully causing a licensee to be in violation of NRC 
requirements.
    <bullet> 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.
    <bullet> Recognizing a violation of procedural requirements and 
willfully not taking corrective action.
    <bullet> Willfully defeating alarms which have safety significance.
    <bullet> Unauthorized abandoning of reactor controls.
    <bullet> Dereliction of duty.
    <bullet> Falsifying records required by NRC regulations or by the 
facility license.
    <bullet> 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.
    <bullet> Willfully withholding safety significant information 
rather than making such information known to appropriate supervisory or 
technical personnel in the licensee's organization.
    <bullet> Submitting false information and as a result gaining 
unescorted access to a nuclear power plant.
    <bullet> 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.
    <bullet> Willfully providing false certification that components 
meet the requirements of their intended use, such as ASME Code.
    <bullet> Willfully supplying, by contractors of equipment for 
transportation of radioactive material, casks that do not comply with 
their certificates of compliance.
* * * * *

X. Enforcement Action Against Non-Licensees

    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

[[Page 1985]]

supplying certain products or services 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.
* * * * *

Supplement I--Reactor Operations

    C.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;
* * * * *

Supplement VII--Miscellaneous Matters

    C.8. A failure to assure, as required, that contractors have an 
effective fitness-for-duty program;
* * * * *
    Dated at Rockville, Maryland, this 6th day of January, 1998.

    For The Nuclear Regulatory Commission.
John C. Hoyle,
Secretary of the Commission.
[FR Doc. 98-754 Filed 1-12-98; 8:45 am]
BILLING CODE 7590-01-P