Copyright 2000 Federal News Service, Inc.
Federal News Service
March 22, 2000, Wednesday
SECTION: PREPARED TESTIMONY
LENGTH: 3337 words
HEADLINE:
PREPARED TESTIMONY OF MS. GARY JONES ASSOCIATE DIRECTOR, ENERGY, RESOURCES, AND
SCIENCE ISSUES U.S. GENERAL ACCOUNTING OFFICE
BEFORE THE
HOUSE COMMERCE COMMITTEE SUBCOMMITTEE ON ENERGY & POWER
SUBJECT - SAFETY AND SECURITY AT THE DEPARTMENT OF ENERGY
BODY:
Mr. Chairman and Members of the
Subcommittee: We are pleased to be here today to provide our views on three
bills designed to improve worker and nuclear facility safety and health as well
as to enhance security for the Department of Energy (DOE). Our testimony is
based on our past work on H.R. 3383 safety, health, and security issues on a
wide variety of DOE programs and activities.(1) Let me summarize our views on
the H.R. 3906 three bills:
H.R. 3907 H.R. 3383 would amend the Atomic
Energy Act by eliminating Thomas Links the exemption that currently allows
certain nonprofit contractors to avoid paying civil penalties if they violate
H.R. 3383 DOE's nuclear safety rules. Last year, we reported and testified on a
number of problems with DOE's enforcement of its H.R. 3906 nuclear safety
regulations. We suggested that the Congress consider eliminating both the
statutory and administrative H.R. 3907 exemptions from paying civil penalties
for violations of - nuclear safety rules. This bill directly addresses our
concerns. H.R. 3906 would legislatively establish an office of independent
security oversight within DOE that reports directly to the Secretary. We believe
that legislatively establishing an office, independent from line management,
that oversees safeguards and security across the Department and reports to the
Secretary would insulate it from organizational change and programmatic
conflicts. Since May 1999, DOE's security oversight office has reported to the
Secretary. However, prior to May 1999, it was several layers down in the
organization and, as a result, oversight findings were not always raised to top
management. The legislation would also require an annual report to the Congress
from that office on the status of its findings. Requiring an annual report would
make the office's findings more visible and help to ensure prompt corrective
actions are taken. H.R. 3907 would eliminate self-regulation of health and
safety activities at DOE by authorizing the Nuclear Regulatory Commission (NRC)
to regulate and enforce nuclear safety and the Occupational Safety and Health
Administration (OSHA) to regulate and enforce occupational health and safety for
all DOE facilities. This bill provides a sound basis for continuing the process
of moving DOE in the direction of external regulation. However, the time frame
allowed in the bill for the transition to full external regulation may not be
achievable. NRC and OSHA have experience with some DOE facilities-- smaller,
less complex facilities and nondefense research laboratories. The transition to
NRC and OSHA regulation of these facilities could be achieved relatively
quickly. However, issues associated with regulating larger defense facilities
are more complex, such as the need for experience with unique activities at
weapons facilities, and would take longer to evaluate and may require special
consideration.
Mr. Chairman, while all three bills have the potential to
improve some aspects of health, safety, and security at DOE facilities,
legislation can only take change so far. In the final analysis, it will require
a long-term commitment by DOE, and quite frankly, DOE has not demonstrated the
will nor does it have the culture in place to make lasting changes. DOE needs to
focus on aspects of its culture that are barriers to effectively carrying out
its missions in a safe, environmentally sound, and secure way. Over the years,
our work has noted culture barriers such as a complicated, dysfunctional
organizational structure; an unclear chain of command; poor accountability for
program management; weak oversight of contractors; lack of technically skilled
staff; and resistance to change.
DOE has made changes and has activities
under way that address some of these issues. However, it must continue to look
at human capital issues, such as hiring and training to improve the skills of
its employees, the performance measures and incentives systems for contractors
and federal employees to ensure that they reward the correct behaviors, and
clear definition of roles and responsibilities to eliminate duplication and
inefficiencies. Without identifying and focusing on the barriers to change, DOE
will not be able to break out of the culture or mindset that permeates it.
Therefore, even with the changes brought about by these legislative proposals,
problems inherent in DOE may continue.
Background
Since its
creation in 1977, DOE has conducted technically complex and hazardous activities
at its facilities across the country. These activities include developing,
producing, maintaining, storing, and dismantling nuclear weapons; managing
nuclear fuel storage and disposal sites; operating nuclear reactors; performing
research and development to enhance energy efficiency and to develop innovative
nuclear, renewable, and other energy sources; and cleaning up environmental
contamination from its past weapons production. Besides being potentially
dangerous, some of these activities are highly classified and require
sophisticated security measures. However, in conducting these activities, DOE
has a long history of safety, managerial and security problems.
DOE is
essentially exempt from regulation by NRC for nuclear safety and by OSHA for
worker protection. These exemptions originated from concerns about national
security that characterized DOE's historical role in nuclear weapons production.
The facilities that this legislation would subject to external regulation are
substantial. DOE maintains 3,500 nuclear facilities at 34 sites in 13 states,
covering, in all, more than 85 million square feet of building space.
Civil Penalties for Nonprofit Contractors
H.R. 3383 would amend
the Atomic Energy Act by eliminating the exemption that allows certain
contractors to avoid paying civil penalties if they violate DOE's nuclear safety
rules. The Congress first authorized civil monetary penalties for violations of
nuclear safety rules in 1988. This gave DOE the authority to impose civil
monetary penalties on its contractors, and on their subcontractors and
suppliers, for violating enforceable nuclear safety rules. However, for certain
contractors, the Congress provided an exemption from having to pay the monetary
penalties, primarily because the contractors operating DOE laboratories at the
time received no fees in addition to their reimbursable costs and, therefore,
had no contract- generated funds available to pay any penalties assessed. There
was concern that these contractors might leave the research field rather than
put the assets of their organizations at risk if they were subject to paying the
monetary penalties. If DOE identifies violations of nuclear safety rules at any
of the seven contractors and laboratories specifically named in the law, or
their subcontractors and suppliers, DOE cannot collect the civil monetary
penalty.
The exemption from civil penalties has been extended to
institutions that, like other contractors in the business of handling nuclear
materials, receive financial protection or indemnification from the damages to
people and property that may be harmed in a nuclear accident. The Secretary also
was given the authority to determine whether other contractors that are
nonprofit educational institutions should receive a similar exemption. In 1993,
DOE specified by rule that all nonprofit educational institutions would receive
an automatic exemption from paying the penalties.
In a March 1999 report
to the Congress concerning the reauthorization of the Price Anderson Act, DOE
argued that the exemption for named contractors and nonprofit educational
institutions should be continued.(2) Our analysis of DOE's reasoning, however,
raised several questions about the merits of continuing the exemption: DOE
argued that universities and other nonprofit contractors working at DOE
facilities would be unwilling to put their assets at risk for contract-related
expenses such as civil penalties. However, nearly all of the contractors that
manage and operate DOE facilities now have the opportunity to earn a fee. This
fee, which is in addition to reimbursed costs, is used by the nonprofit
contractors to cover certain nonreimbursable contract costs and to conduct other
laboratory research. The fee could also be used to pay civil penalties if they
were imposed on the contractor. DOE said that contract provisions are a better
mechanism than civil penalties for holding nonprofit contractors accountable for
safe nuclear practices. However, DOE has not taken full advantage of the
existing contracting mechanisms to emphasize nuclear safety. For example, at the
Lawrence Livermore National Laboratory in California, DOE's main contractor--the
University of California--received 96 percent of its $6.4
million available performance fee in fiscal year 1998, even though it had
significant nuclear safety deficiencies resulting in enforcement actions. At
best, only about 4 percent of its performance fee for 1999 was at risk if it did
not perform satisfactorily in the health and safety area. DOE said that its
current approach of exempting nonprofit institutions is consistent with NRC's
treatment of nonprofit organizations because DOE issues notices of violation to
nonprofit contractors without collecting penalties but can apply financial
incentives or disincentives through the contract. However, NRC can and does
impose monetary penalties for violations of safety requirements, without regard
to the profit-making status of the organization. NRC sets lower penalty amounts
for nonprofit organizations than for-profit organizations. The Secretary could
do the same, but does not currently take this approach. Furthermore, both NRC
and other regulatory agencies have assessed and collected penalties or
additional administrative costs from some of the same organizations that DOE
exempts from payment. For example, the state of California assessed and
collected $88,000 in "administrative costs" from the University
of California for violating state environmental laws at the Lawrence Livermore
and Lawrence Berkeley National Laboratories.
Our June 1999 report on
DOE's nuclear safety enforcement program recommended that the Secretary of
Energy eliminate the administrative exemption from paying civil penalties for
violations of nuclear safety rules that DOE granted to nonprofit educational
institutions. The Department did not implement the recommendation, instead
commenting that the issue of exemption from civil penalties was ultimately one
for the Congress to decide. We also suggested that the Congress consider
eliminating both the statutory and administrative exemptions from paying civil
penalties for violating nuclear safety rules. H.R. 3383 directly addresses our
recommendation.
Independent Security Oversight
H.R. 3906 would
legislatively establish an independent security oversight office within DOE that
reports directly to the Secretary of Energy. We believe that legislatively
establishing an office, independent from line management, that oversees
safeguards and security across the Department would insulate it from
organizational change and programmatic conflicts. It would also provide the
office with the visibility in the organization and the authority it needs to
ensure that security problems it identifies are corrected. Since May 1999, DOE's
independent security office has reported to the Secretary. However, the director
of the independent security oversight office has not always reported to the
Secretary. Prior to May 1999, the independent security oversight office reported
to the Office of Oversight, which in turn reported to the Assistant Secretary
for Environment, Safety, and Health, who reported to the Secretary. At one time,
the oversight office was organizationally placed in Defense Programs, a
line-management program office. As a result of these organizational placements,
oversight findings and recommendations were not always raised to top DOE
management and were sometimes ignored by the contractors operating DOE's
facilities.
The bill also proposes, among other things, that the
independent security oversight office conduct evaluations every 18 months and
conduct follow-up reviews to ensure that corrective actions for security
problems are effective. These provisions of the bill focus on several issues
discussed in our February 2000 report on security oversight. For example, our
report disclosed that during the mid- 1990s, as many as 3 years elapsed between
the independent security oversight office's inspections at DOE's nuclear weapons
laboratories. In addition, we recommended that the oversight office work with
the laboratories in developing corrective actions to ensure that security
problems identified during its inspections were properly corrected. In recent
months, the independent security oversight office has taken actions on these
issues. However, in the past, the emphasis on security within DOE has varied
greatly, and recent improvements may not be permanent fixes. Required periodic
evaluations, follow-up reviews, and the annual report to the Congress on the
status of security at DOE facilities, as would be required under H.R. 3906,
would help to prevent future backsliding.
External Regulation of DOE
Facilities
H.R. 3907 would authorize NRC to regulate and enforce nuclear
safety and OSHA to regulate and enforce occupational health and safety at DOE
facilities. The bill would require that such regulation be effective by October
1, 2001. By placing DOE facilities under NRC and OSHA jurisdiction, the bill
would continue the process of moving DOE in the direction of external
regulation.
The process of eliminating self-regulation began in 1984
when DOE facilities first came under federal environmental laws that are carried
out and enforced by the Environmental Protection Agency and the states. In
addition, NRC has worked with DOE to license, certify, and consult on many
different DOE facilities. For example, NRC granted a license to DOE for
operating the TMI-2 Independent Spent Fuel Debris Facility at the Department's
Idaho National Engineering and Environmental Laboratory. It is also conducting
prelicensing consultations with DOE in other areas, including the high-level
waste repository at Yucca Mountain, Nevada, and a proposed
facility for making mixed-oxide fuel. NRC and OSHA have also conducted simulated
inspections at DOE facilities during recent pilot projects. Aside from these
individual cases, the vast majority of DOE's facilities are not regulated for
health and safety by independent regulators.
We, along with others, have
often reported on weaknesses in DOE's self-regulation of the environmental,
safety, and health responsibilities at its facilities. These weaknesses prompted
then- Secretary of Energy Hazel O'Leary to seek external regulation for worker
safety in 1993. In 1994, legislation was proposed and hearings were held on
external regulation of DOE nuclear safety. In 1995, DOE created an advisory
committee that concluded, "Widespread environmental contamination at DOE
facilities and the immense costs associated with their cleanup provide clear
evidence that self- regulation has failed."(3) In 1996, a subsequent DOE working
group of senior managers concluded that external regulation could improve
safety, eliminate the inherent conflict of interest from self- regulation, gain
consistency with current domestic and international safety management practices,
and improve credibility and public trust. The advisers recommended that safety
and health at DOE facilities be externally regulated.
In 1997,
then-Secretary Frederico Peqa took a more cautious approach to external
regulation by launching a pilot program with NRC and OSHA. The pilot program was
limited to DOE's nondefense facilities. The purpose of the pilot program was to
test regulatory approaches and gain insight about the costs of external
regulation based on actual experience. The pilot program began in January 1998
at the Lawrence Berkeley National Laboratory in California and was completed in
June 1998. (OSHA completed an earlier pilot at the Argonne National Laboratory
in Illinois in 1996.) The other NRC pilot program facilities were at Oak Ridge
in Tennessee and Savannah River in South Carolina. The results of the pilot
program, as well as the extensive interactions between DOE, NRC, and OSHA over
the years, show that external regulation offers many potential benefits, and
that external regulators have the flexibility to adjust to the unique conditions
at DOE facilities.
The current Secretary believes external regulation is
not worth pursuing, contending that costs would likely outweigh the value of
external regulation.
His position contrasts sharply with DOE's previous
positions promoting external regulation. His position also conflicts with the
Department's own pilot program results and is inconsistent with conclusions
reached by NRC and OSHA. The results of the pilot program and the extensive
practical experience gained with NRC and OSHA show that external regulation for
the class of facilities studied improves safety and accountability and is not
likely to be prohibitively expensive.
While the pilot program revealed
no major barriers to regulating the class of DOE facilities studied, none of the
pilot sites contained defense facilities. The pilot did not include DOE's three
largest laboratories--Lawrence Livermore, Los Alamos, and Sandia--which operate
significant defense facilities. DOE's defense facilities are far more complex
than the pilot sites and would likely require more time to study issues such as
the need to maintain security, regulatory costs, resource and skill needs, and
transition methods. For the much simpler pilot sites, nearly a year was spent
planning, conducting and reporting on the pilot results. DOE's Working Group on
External Regulation recommended several years of experience be gained before
bringing in defense sites under outside regulatory control. Also, complicating
any transition to outside regulatory control is the examination of the role of
the Defense Nuclear Facilities Safety Board, which currently oversees nuclear
safety at DOE's facilities.
Given these complexities, we believe the
October 1, 2001, start up schedule contained in H.R. 3907 for full
implementation of external regulation may not be achievable for DOE's defense
facilities. Transitioning to NRC and OSHA regulation of classes of DOE
facilities in which experience has already been gained, such as nondefense
research laboratories, seems more workable. Then, phasing in NRC and OSHA
regulation of DOE defense facilities could occur over a longer period of time.
Mr. Chairman, as I discussed initially, all three bills have the
potential to improve some aspect of health, safety, and security at DOE
facilities. However, legislation can only take change so far. In the final
analysis, it will require a long-term commitment by DOE. This concludes my
testimony. We would be happy to respond to any questions that you or Members of
the Subcommittee may have.
FOOTNOTES: 1 See Department of Energy: DOE's
Nuclear Safety Enforcement Program Should Be Strengthened, GAO/RCED-99-146, Jun.
10, 1999). Nuclear Security: Improvements Needed in DOE's Safeguards and
Security Oversight, (GAO/RCED-00-62, Feb. 24, 2000). Department of Energy:
Uncertain Future for External Regulation of Worker and Nuclear Facility Safety,
(GAO/T-RCED-99-255, Jul. 22, 1999). Department of Energy: Clear Strategy on
External Regulation Needed for Worker and Nuclear Facility Safety,
(GAO/T-RCED-98-163, May 21, 1998).
2 The Price Anderson Act established
a source of funds to compensate personal injury and property damage from a
nuclear accident and limits liability of private industry for such accidents.
3 See Improving Regulation of Safety at DOE Nuclear Facilities, Advisory
Committee on External Regulation of Department of Energy Nuclear Safety (Dec.
22, 1995).
END
LOAD-DATE: March 28, 2000
