"Individual Commitment to a Group Effort"
Dr. Shirley Ann Jackson, Chairman
U.S. Nuclear Regulatory Commission
USNRC Senior Management Meeting
April 20, 1999
Good morning. It is a pleasure to be here with you today at what I suppose one could call the first "annual" NRC Senior Management Meeting (SMM). As you all know, the Commission last year approved a staff proposal to make these meetings an annual, versus semi-annual gathering. While the change in periodicity marked one modification to the SMM process, it is not the last. The Commission recently approved a staff proposal to end the compilation of the NRC watch list and to end the practice of identifying superior performers. Subsequent changes resulting from the development of the new NRC reactor oversight program offer the potential for further modifications of SMM content and conduct. As with most major NRC activities, the SMM is in a state of transformation.
In keeping with a theme of transformation, I believe this meeting is an opportune time to stop, take a breath, examine what we have accomplished as a result of our efforts at change, and consider both what is left to be done and the cautions to be considered as we proceed. In doing this, we should begin by recognizing that significant change has been occurring at NRC for some time; it is not, as some would contend, a sole manifestation of recent Congressional and stakeholder activity. Have our oversight bodies and stakeholders accelerated many of our efforts? Undoubtedly. Have we gained insights into areas for NRC improvement as a result of active stakeholder involvement? Absolutely. But we should not overlook the fact of our pursuit of regulatory excellence and effectiveness through a myriad of activities before the recent increase in attention we have received. In fact, regulatory excellence was a Direction Setting Issue (DSI) in Strategic Assessment and Rebaselining, begun in 1995.
Accomplishments [VIEWGRAPH 1]
I would characterize NRC accomplishments of the past several years as occurring on four levels, structured here as a pyramid. At the base we have a broad spectrum of individual specific regulatory issues, which frequently have led (on the second level) to larger program changes. These programs fit coherently into a few fundamental frameworks, which, in turn, have dovetailed into the elements of vision that have been underlying themes throughout this period. Used as a rapid scan, this provides a coherent, easily grasped picture of how much we have achieved in a relatively short period.
Regulatory Issues and Challenges
At the most basic level, we have been faced with finding responsible, sensible solutions to individual regulatory issues and challenges, such as:
- the numerous problems identified at Millstone and other facilities
- the cyclic performance demonstrated at Commonwealth Edison facilities
- the need to complete NRC activities related to the Watts Bar licensing process
- the need to deal generically with spent fuel pool design and operating issues
- aging issues
- technical challenges presented by digital instrumentation and control issues
- year 2000 concerns
- ensuring a proper emphasis on maintaining safety conscious work environments
- at licensed facilities
- managing the transition of the United States Enrichment Corporation (USEC) facilities to NRC oversight
- the need to focus on dry cask storage methods for spent fuel
- focusing on medical oversight issues
- finding a sensible regulatory position on radiological criteria for decommissioning
- determining the applicability of the backfit rule to decommissioning
- anticipating and dealing with issues associated with economic deregulation, including decommissioning funding assurance, grid reliability, cost-competitiveness, and changes in nuclear industry business relationships (i.e., new ownership configurations, increases in license transfers, possible increase in decommissioning)
Process and Program Changes
This is only a partial list, but it serves to illustrate the scope of the regulatory challenges we have addressed. More significantly, in each of these individual cases, we have sought to determine whether broader programmatic issues existed. This brings us to the second level on our "pyramid of achievement." For example:
- The specific issues uncovered at Millstone and Haddam Neck led to a broader emphasis on the industry-wide need to understand and maintain the design basis-including: (1) our more comprehensive oversight of FSAR accuracy and completeness, and the implementation of 10 CFR 50.71(e); (2) our ongoing revisions to 10 CFR 50.59, and the wide range of accompanying actions we have taken to improve NRC methods for dealing with reactor facility changes, temporary modifications, degraded equipment, etc.; and (3) the architect/engineer inspections and the incorporation of design basis issues into routine inspections.
- Another programmatic achievement has been in the area of license renewal, where we issued a Commission policy statement, case-specific orders on conduct of adjudicatory proceedings, and Standard Review Plans for 10 CFR Part 54 and 10 CFR Part 51, and developed an expedited, predictable, and fair license renewal process.
- In the area of reactor licensee performance assessment, we began, in 1995, with focused attempts to improve the objectivity and transparency of the Senior Management Meeting-which led to developing improved performance indicators and the broader IRAP attempt to integrate our reactor assessment processes-which, in turn, led to an overall effort to re-think and integrate our inspection, assessment, and enforcement processes.
- As a result, we now speak in terms of "cornerstones of safety" as a coherent starting point for our reactor oversight processes.
- Similarly, in inspection, we are developing and implementing a "risk-informed baseline" inspection program.
- In enforcement, our programmatic review has led to a reduction of unnecessary burden associated with the less important Severity Level IV, issues and a potentially new direction for the enforcement program, which may assume a complementary, as opposed to separate, role in the assessment process.
- In the materials area, let us not overlook the business process re-engineering of materials licensing.
- Let us not forget the improvements to procurement, which have garnered for the NRC two Hammer Awards.
- We have developed and are implementing ADAMS, and have begun the development of a new resource management system - STARFIRE.
Once again, I have given you only a partial inventory of our programmatic successes. But even using this list, it is easy to progress to the next level on this "pyramid," to point out several fundamental framework changes-a framework that now characterizes the overall NRC approach to regulation, but which, five years ago, were either completely unfamiliar to many people inside and outside of NRC, or were much less developed than they are at present.
- The first and perhaps most obvious framework change is the movement to risk-informed, performance-based regulation. As you know, we could recite a litany of achievements in this area, but perhaps the best summary is that the NRC staff, at all levels, now has a much-improved focus and understanding of the applicability of risk information and risk assessment to regulatory functions- together with processes for at least some of those applications.
- Another indication of our progress in this area is that we are considering ways to risk-inform the entire body of reactor regulations in Part 50.
- A second framework achievement is our increased involvement of stakeholders in the regulatory process. Clear communication and enhancement of public confidence are parts of this framework, which also includes our stakeholder meetings, public workshops, and our general efforts to be more open to constructive criticism-from the Congress, from our licensees, from public interest groups, and from our own staff. As with risk-informed regulation, I believe this acceptance of and appreciation for stakeholder involvement has become a way of thinking at the NRC.
- The final fundamental framework change is a sort of "insurance policy"-the basis for our confidence that these changes will endure and not die on the vine. I am speaking of our approach to planning. Once again, this framework has been built slowly and steadily over time, and is not yet complete, has taken the involvement of each one of you-from the Strategic Assessment and Rebaselining initiative we began in 1995, to the multi-year Strategic Plan, agency-wide Performance Plan, and office-level Operating Plans, to our present Planning, Budgeting and Performance Management (PBPM) process. Once again, as a part of a fundamental framework, we have sought to change our overall approach to the way we do business.
Now, I know you must be thinking, what could be higher on this pyramid than these fundamental framework elements? The fourth and final level represents achievements of vision-basic concepts that - that, if properly internalized, can be used to characterize the ideal of regulatory excellence.
- The first of these is an emphasis on performance-what we sometimes refer to as an "outcomes" orientation. We have learned to be unapologetic in demanding a bottom-line focus on results, both from our licensees and from ourselves. This has increased our emphasis on developing and implementing metrics, or measures of success.
- The second achievement is that we have become much better at anticipating change-such as in our efforts associated with electric utility restructuring, or the way we approached the possibility of external regulation of certain Department of Energy nuclear facilities, or our work on the privatization of the USEC. This element of vision is undergirded by our planning framework.
- The third achievement of vision is a new standard for NRC effectiveness. We have become far more introspective and self-critical in the way we examine our own regulations, programs, and processes. I have the confidence that, at this point, I could call on nearly any high-level NRC manager to examine nearly any NRC program and certain yardsticks would be used: consistency, objectivity, predictability, timeliness, defensibility, scrutability. The fact that these words have become so familiar to us should be a signal that we will continue to improve our own effectiveness.
- Finally, and most importantly, I am proud that throughout this period of change, despite external pressures from multiple quarters, we have maintained an unambiguous focus on safety-what I have referred to as "holding the center."
What Is Left?
Of course, we still have more to do. There are a great many areas in which we have made substantial inroads, but they are, as yet, incomplete. While we have met all of our major milestones to date in the license renewal efforts, we have yet to actually renew a license. Upon the completion of Commission deliberation, we will need to get about the task of risk-informing 10 CFR Part 50. We are on the brink of a major change to 10 CFR 50.59, but is not complete. The pilot program for the new reactor oversight process is in the near-term future, but that will be the beginning of a new dimension of work in that area. The list goes on. But as I have stated, the processes, framework and vision we have established, combined with our planning, budgeting and performance management practices offer us the right set of tools to get the job done. I want to thank each of you for your individual contributions to all of our initiatives over the recent years.
Holding the Center
Having spoken on accomplishments of which we all can be proud, I would like to offer a cautionary note. As many of you know, the General Accounting Office (GAO) is conducting an audit of NRC staff reaction to the recent changes we are implementing. While I would like to believe that the GAO will find a workforce energized and enthusiastic by the changes underway at NRC, I anticipate a mixed message. Based on feedback I have received both directly and indirectly from the staff, I believe we must be prepared to receive reports of a staff which is not of one mind. In all probability, we will hear of staff members who feel that the NRC is giving up too much of its regulatory independence, who feel that we are acquiescing to the demands of the regulated industry and the Congress, and who are concerned for the ultimate safety consequences of the changes we are making today, even as we hear that many staff are excited about the changes and want to get on with them.
While none of these perceptions are true in my estimation, I can understand how they can develop and, left uncorrected, can fester. The transition planning that has taken place with respect to the new reactor oversight process is an excellent initiative, but it would be unrealistic to assume that all the messages contained in that plan have permeated our organization at this point. The process of change requires constant reinforcement of the reasons for, and directions of, the change. The important thing for all of us here assembled is to ensure that our programs of outreach to the staff continue and, if possible, are intensified. Our timely pursuit of change cannot be allowed to fail due to a lack of obtaining feedback and building consensus at the working level.
Central to the task of managing the message of change is ensuring that you, as the senior management of this agency, understand the parameters of our efforts. If any of you believe that the changes underway are simply the reaction of a governmental agency to the political environment, you will be unable to characterize correctly to your staff our state of affairs. More importantly, if any of you believe that we are about the business of making life easier for our licensees as an end unto itself, safety may suffer.
Citing our inspectors and reviewers as a basis for believing that licensed activities are being conducted safely will be meaningless if those same inspectors and reviewers feel that our focus is on reducing burden irrespective of whether the burden in question is necessary or unnecessary. A demoralized regulatory staff, who feel that they can not or should not raise concerns over the performance of our licensees or the wisdom of a particular license amendment request, can result in a loss of regulatory credibility.
Let me approach this point from another perspective, because I think it is vitally important to our future. Many of you were inspectors at some point in your career. I was not. I was, among other things, a researcher. While the two professions may appear disparate, I actually see several similarities. Inspectors I have met - good inspectors - do not revel in attempting to elevate items of minutia into, quite literally, federal cases. They achieve satisfaction from looking deeply into an area and finding significant safety issues that had not been identified to date. Similarly, researchers - good researchers - do not try to elevate pedestrian conclusions to levels beyond their merits. Good inspectors do not count violations as a measure of effectiveness. Good researchers do not count publications as indicative of significance. Both professions attempt dispassionately to observe what can be observed, to assess and to compare observations to what is known to date, and to report their findings. And, finally, both professions are filled with persons energized and motivated to dig, to search for significance, and ultimately to serve the public good. That is why we must do whatever is required to ensure that each and every NRC inspector and reviewer understands that we continue to expect vigorous regulatory attention to be directed toward our licensees, and that we, as the management of this agency, still will act decisively to support the staff when we are made aware of unsafe conditions.
As you proceed with your meetings this week, I would encourage each of you to strike up informal discussions on what additional options exist to communicate our expectations to the staff. In doing so, please be self-critical in examining the messages we are sending. For instance, I note that the "key policy messages" we have been using to judge the efficacy of our proposed changes have been described as: maintaining safety, enhancing public confidence, improving effectiveness and efficiency, and reducing unnecessary regulatory burden. I am in complete alignment with the thrust of these message. When we say "reduce unnecessary regulatory burden," we should also make clear that we will " apply the necessary regulatory burden." While this may seem a small matter, I would argue that it is not. Sometimes when these messages are transmitted through the organization, there is a lack of balance associated with that transmittal. This may be compounded by the way in which we advertise our priorities. The response to my tasking memorandum on key NRC activities, sometimes referred to as the "CTM," is an important document. It is widely promulgated, it advertises both our plans and our accomplishments, and the staff understands that the items contained in it are among the highest priority projects in the NRC. However, while we here may understand that many of the activities are aimed at applying the "right" level of burden (such as our risk-informed initiatives and the new oversight program), the staff may be perceiving them otherwise. Clarity and balance of message are important.
That the staff may misinterpret our message and conclude that we mean to reduce burden as a sole objective is perhaps best borne out by a recent draft of our strategic goals and objectives. Before I proceed with this point, let me say that the document to which I refer was in a very preliminary state when this example was brought to my attention. By discussing this example, I do not mean to imply that I believe it is indicative of the thinking of the NRC senior management. On the contrary, because the document was in such a formative stage, it offers an excellent insight into the thinking of the working-level staff.
Under performance goal 2 in this draft document, in discussing performance targets for the reduction in unnecessary burden, the first performance target that was delineated stated, "Decrease in unnecessary burden per year (to be determined by mutual agreement with industry) [emphasis added]." What does this say to us? Leaving aside issues of practicality (e.g., determining how much unnecessary burden exists and determining what an appropriate workoff curve would look like), what I see in this is a staff which overestimates the degree to which we should interact with the industry and which ignores our other stakeholders in the process. After all, what the Nuclear Energy Institute sees as unnecessary burden, the Union of Concerned Scientists may see as unduly lax regulation. When I say that it is a fundamental achievement that we consider our stakeholders in the regulatory process, I must follow that with the caveat that such involvement must be balanced, and must inform, rather than drive, our decision-making. The key point here is the degree to which this admittedly unreviewed document seeks to tie our success to the satisfaction of the regulated industry. Returning to a point I made earlier, if we are prepared to negotiate with the industry to arrive at a determination of whether we are successful in reducing unnecessary risk, should we not also negotiate with public interest groups to ensure that we are applying a necessary level of burden?
Shifting my remarks slightly, I would like to describe another area which may be leading to confusion among the staff. I refer to this as "starting at the wrong end of the paragraph," and it refers to the management practice of, at times, defining, rather than arriving at, the solution to a problem. One might explain this distinction by referring to mathematical problem statements. As a rule, do we ask the staff to solve an algebra-like problem statement, in which the solution to the inevitable "x" is sought, or do we ask them to solve a geometry-like problem statement, in which support for a purported fact is sought? A recent example involves the success criteria established for the risk-informed baseline inspection program. In detailing the success criteria for the program, the staff offered two problematic items:
- That the total hours expended inspecting 8 out of 9 pilot plants be within a 25% band, and
- That the total hours expended demonstrate a 15% reduction over that expended in the existing core inspection program.
As I explained at the March 26, 1999 Commission meeting on the new power reactor oversight process, the purpose of developing the risk-informed baseline inspection program was to identify what was important to inspect from a risk perspective, and the degree of inspection which those items require to achieve confidence that facilities are operated safely, and to allow resource demands to result from the process. In accepting such a risk-informed approach, one must allow the regulatory burden to rise or to fall based upon risk insights. To specify that all sites must fall within an arbitrary acceptance band for resource expenditures does two things. First, it assumes that the risks presented by the individual facilities are similar enough that required inspection resources will be similar. Second, if the target inspection hours are promulgated to the inspectors in conjunction with this criterion being established, it creates an implicit expectation that inspections will be performed within the allotted hours, rather than the expectation that the reported hours be reflective of the time required for an inspection. This is what I mean when I refer to reading from the "wrong end of the paragraph" - the end is presented as a given, and the beginning is altered in support of the end. Recognizing that resource utilization must be planned, nonetheless, I am concerned that this sort of message, when received by the staff, may lead to cynical conclusions about what we really are hoping to achieve from the changes we seek to make.
A slightly different example of "starting at the wrong end of the paragraph" involves the termination of the Operational Safeguards Response Evaluations (OSRE). In focusing on achieving budget reductions, a decision was made which was problematic in a number of ways. First, a program was terminated without an assessment of the need for a replacement program and without the development of that program. Second, the decision to terminate the program failed to take into account the degree of risk present at the time. Additionally, the decision was made without due consideration for the effects of the decision on our stakeholders, particularly on the public. Let me be clear on this last point - I am not advocating that we base our decisions on the potential reaction of stakeholders. I am advocating that we keep our stakeholders in mind as we implement our decisions to ensure that we understand the potential impact of the decisions, and to ensure that our stakeholders are properly informed as to the bases for our decisions.
This point also has applicability to the recent issues associated with Millstone that gave rise to the Millstone Independent Review Team. Recognizing that reasonable people may disagree over the ultimate disposition of a particular enforcement matter, it is understandable that decisions may, from time to time, be reversed before proceeding with a particular agency action. But to do so without documentation, without leaving an understandable basis for the reversal of a position, particularly as it regards an issue of deep stakeholder concern, leads to the reasonable concerns that were expressed by our stakeholders in the Millstone case. We also must recognize that we have internal stakeholders as well as external stakeholders. When decisions are made without taking them into account, we risk the types of staff attitudes and actions I have been describing.
The final message I want to leave with you is one I have delivered before. It is absolutely imperative, as we go about the business of change, that we hold the center. To remain a credible and effective health and safety regulator, we must continue to drive this message through our organization. We must challenge the staff to identify important safety issues and encourage them in doing so. As in the Significance Determination Process (SDP) developed by the staff for assessing the meaning of inspection findings in the new reactor oversight process, we must remain willing to accept "false-positives" in terms of safety concerns. To do otherwise risks creating a "chilling effect" in the staff which could jeopardize all that we have achieved.
Let me emphasize that, while I may have sounded critical in offering these cautions, I offer them to emphasize concerns that I know you share. I assure you that I remain optimistic about the direction in which we are headed. I and the Commission have demanded much of you in the past year, and you have delivered. I, as Chairman, have demanded much of you over the past four years, and you have delivered. Still, there is much work remaining and, as I have stressed, it is vitally important that we proceed in the right way and that we make our intentions and expectations clear to every NRC staff member.
In all, then, I am proud of what we have achieved together in the past four years. In the face of external pressures, internal challenges, and numerous regulatory, policy, and management issues, we have achieved accomplishments of process, of framework, and, ultimately, of vision. We have shown the ability to self-identify our weaknesses and to address them in bold ways. I believe that we have, in fact, reaffirmed our fundamental health and safety mission, taken strides in improving our regulatory effectiveness, and demonstrated the advantage of being positioned for change.
The challenge before us is simply stated: we must both finish and perpetuate what we have begun. To do so, we will require the buy-in of our foundation - the entire NRC staff. In everything we do, in every change we propose, if we are to be truly successful we must remain mindful of the messages we are sending to the staff and to all of our stakeholders. I am confident that you are the management team that will do just that. As I leave you to your work, let me recall for you the words of Vince Lombardi, who said "Individual commitment to a group effort -- that is what makes a team work, a company work, a society work, a civilization work."
Thank you for your attention today. At this point, I would be happy to answer questions.