In its updated guidance issued on April 30, the US Department of Justice Criminal Division places effectiveness at the epicenter of its factors to be utilized when evaluating a company’s compliance program in the context of a criminal investigation. As corporate compliance programs continue to be closely scrutinized, companies and their boards, senior management, and legal and compliance departments should tailor their corporate compliance programs to issues and risk areas specific to the company’s business. Senior management plays a critical role in identifying these issues and risk areas and must serve as an example and enforcer of good compliance practices. Companies cannot let their compliance programs get stale and must continue to innovate, revamp, and enhance their corporate compliance practices based on lessons learned. DOJ emphasizes that “one hallmark of an effective compliance program is its capacity to improve and evolve.”
As part of the US Nuclear Regulatory Commission’s (NRC’s) efforts to create efficiencies in its enforcement process, the NRC Commissioners unanimously approved a staff proposal to change Section 4.1 of the NRC’s Enforcement Policy. Under this approved change, the NRC will not typically consider fitness-for-duty (FFD) drug and alcohol violations involving non-licensed individuals for enforcement action. But the NRC will still investigate if there are apparent deficiencies in a licensee’s FFD program itself or the program’s implementation. Thus, to avoid enforcement actions in the future, licensees must continue to maintain an effective FFD program for drug and alcohol violations.
The US Nuclear Regulatory Commission (NRC) Office of Investigations (OI) recently published its Office of Investigations Annual Report FY 2018. The report provides an overview of OI’s activities during the previous fiscal year and shows that OI opened 12% fewer cases than in 2017. Of the 101 cases opened in FY 2018, 40% were discrimination cases, a 4% increase from FY 2017. “Discrimination” in this context refers to retaliation for engaging in protected activities established in Section 211 of the Energy Reorganization Act of 1974, as amended. Discrimination has remained the largest case category for the past three years. Material false statement investigations reflect 16% of the cases OI opened in FY 2018, a 4% decrease from FY 2017. Investigations into other alleged violations of NRC regulations reflect 27% of the cases OI opened in FY 2018, and investigations opened to provide assistance to the NRC staff reflect 18% of the cases OI opened in FY 2018.
The NRC issued an update to Management Directive 8.11 (MD 8.11), Review Process for 10 C.F.R. § 2.206 Petitions on March 1, culminating an on-again, off-again review process that began almost a decade ago. In issuing the updated MD 8.11, the NRC also issued a corresponding update to Directive Handbook 8.11 (DH 8.11), but pushed the detailed staff guidance that was previously in MD 8.11 to a publicly available Desktop Guide. In short, the review process in the updated MD 8.11 and DH 8.11 is not markedly different from the prior versions, but the changes also reduce some of the opportunities for licensees to directly seek clarification from a petitioner about the issue being raised and allow the NRC staff to “save” what might otherwise be deficient petitions. The updated MD 8.11 also does not resolve questions as to whether the ability to submit a Section 2.206 petition is restricted to only external stakeholders.
In a rare legal challenge related to fees the NRC charges nuclear licensees for its services, the US Court of Federal Claims recently held that the costs of certain NRC services provided in connection with Confirmatory Orders (COs) are not recoverable via hourly bills to individual licensees. The court held that COs are essentially enforcement orders, and thus cannot be viewed as conveying an “individual benefit” to licensees.
The US Nuclear Regulatory Commission’s (NRC’s) revised regulations regarding the medical use of byproduct material became effective on January 14, 2019—six months after being published in final form, and nearly a decade after the proposed rulemaking. See Medical Use of Byproduct Material—Medical Event Definitions, Training and Experience, and Clarifying Amendments, 83 Fed. Reg. 33,046 (July 16, 2018). The revised regulations amend 10 CFR Parts 30, 32, and 35. The NRC also issued guidance to provide additional detail regarding the substance of the revised regulations and to assist licensees with compliance. See Guidance for the Final Rule, Medical Use of Byproduct Material—Medical Events, Definitions, Training and Experience, and Clarifying Amendments, 83 Fed. Reg. 33,759 (July 16, 2018). Among other things, the amendments change the requirements associated with
The NRC issued a Notice of Violation (NOV) on December 17, 2018, to the Wolf Creek Nuclear Operating Company (Wolf Creek) finding that the company violated 10 CFR 50.7, the NRC regulation protecting reactor licensee employees and contractors from retaliation for raising nuclear safety concerns. Based on the level of management involved, the NRC treated the violation as a Severity Level II violation, and proposed a civil penalty of $232,000. The NOV and proposed civil penalty followed an investigation by the NRC Office of Investigations and predecisional enforcement conference (PEC). In addition to the finding of a violation of 10 CFR 50.7 by a reactor licensee involving one of its contractors and the size of the proposed civil penalty, two aspects of the NOV are particularly noteworthy: (1) the form of the adverse action that resulted in the violation; and (2) the evidentiary standard of proof the NRC Staff used to find a violation.
In late September, the US Nuclear Regulatory Commission (NRC) made public a White Paper that it had initially issued internally to the Office of Nuclear Reactor Regulation (NRR) in March 2012. The White Paper, titled “NRC and Licensee Actions in Response to New Information from a Third Party,” discusses NRC expectations for how licensees should consider new information received from a third party that may affect a plant’s Final Safety Analysis Report (FSAR). It is our understanding that the White Paper is being released at this time due to a Freedom of Information Act (FOIA) request. Nonetheless, licensees should be aware of this White Paper and its potential impact should the NRC decide to apply this “guidance.”
The NRC’s Office of Nuclear Reactor Regulation (NRR) recently issued an update on the status of resolving the recommendations made by the NRC’s Office of Inspector General (OIG) in its audit of NRC’s Significance Determination Process (SDP) for reactor safety. The update addresses the progress made towards resolving the four recommendations from the audit.
The first recommendation was to “assess SDP workflow and establish, communicate, and document clear and consistent expectations for staff and managers to complete their roles in the SDP.” In its update, NRC reported on the Inspection Finding Resolution Management (IFRM) trial period and the results of an effectiveness review report. The effectiveness review report made 11 recommendations, most notably that the IFRM process should be continued with some changes. Staff is now revising procedures used to support the IFRM trial period, which will become the new IMC 0609, IMC 0609, Attachment 1, and IMC 0609 Attachment 5. Staff intends to issue the revised procedures by the end of 2018.
The US Nuclear Regulatory Commission (NRC) issued interim guidance on June 15 for dispositioning Severity Level (SL) IV violations that do not have an associated performance deficiency (PD). The interim guidance states that these violations will instead be issued to licensees without any required review by NRC headquarters. According to the NRC, this interim guidance is designed to reduce NRC Staff resources that previously were necessary for associated exercises of enforcement discretion by the Offices of Enforcement and Nuclear Reactor Oversight. The NRC believes these resource expenditures are “unwarranted in light of the very low safety significance of these violations, the fact that similar violations with an associated PD wouldn’t normally require such a review, and the fact that the violation needs to be corrected by the licensee regardless of whether or not a PD exists.”
This interim guidance can be used for non-willful and NRC-identified, licensee-identified, or self-revealed SL IV violations without an associated PD, as long as the violation meets the criteria described in Section 2.3.2 of the Enforcement Policy for disposition as a non-cited violation. An NRC-identified or self-revealed SL IV violation without an associated PD must be documented according to Table 3 in Inspection Manual Chapter (IMC) 0611. A licensee-identified SL IV without an associated PD must be documented according to Table 8 in IMC 0611. Violations dispositioned using this interim guidance also will not be assigned a Reactor Oversight Process (ROP) color. SL I, II, and III violations without an associated PD that are being considered for enforcement discretion will continue to follow existing guidance in Inspection Manual Chapter (IMC 0611).