escort, if transport is necessary (and NRCapproved) through a highly-populated area. SSNM Shipments. During 1979, NRC requirements for safeguarding shipments of formula quantities of highly enriched uranium or plutonium remained the same as those during 1978.

Route Surveys. NRC Safeguards teams conduct field surveys over transportation routes proposed for spent fuel or strategic special nuclear material shipments. These surveys obtain information for NRC contingency planning and route approval considerations. During such surveys, the teams coordinate with local law enforcement agencies along the way to increase their awareness and knowledge of the shipments and to identify local contacts that can be helpful, if needed.

During fiscal year 1979, the NRC teams surveyed five routes for shipments of formula quantities of special nuclear material and four routes for shipments of spent fuel. They collected data in the field, traveling approximately 6,400 road miles through 33 States, and meeting with approximately 270 local and State law enforcement agency representatives along the way. Licensees transporting nuclear materials received route profile reports which described appropriate law enforcement contacts and communications along the way.

During the year, NRC determined the adequacy of safeguards by both the licensing process and the inspection of all licensed shipments involving special nuclear material. These inspections covered all domestic shipments and the domestic segments of the

import and export shipments, including all storage and transfer points. Twenty-seven shipments were covered, involving 689 man-hours of inspection activity. No items of noncompliance were noted.

Reactor Safeguards

The main factors in evaluating the adequacy of safeguards at power reactor facilities are:

Licensing Reviews (including field reviews of equipment and operations) of licensee security plans prepared in response to the requirements to 10 CFR 73.55. ("Requirements for Physical Protection of Licensed Activities in Nuclear Power Reactors against Industrial Sabotage.")

• Inspection for licensee compliance with the approved security plan.

The NRC staff is also planning a future program to evaluate the practical effectiveness of safeguards as implemented at licensed operating power reactors throughout the U.S.

rule" procedures in vital areas, and additional physical compartmentalization within such areas. (Two-man rule procedures are those where two employees observe each other's activities, in order to minimize the opportunity for malevolent acts by an insider.) The Commission also is considering various programs for determining trustworthiness of reactor facility employees authorized to enter vital areas.

There have been some construction and equipment delivery delays in the implementation of certain safeguards measures. Therefore, certain facilities are using approved interim measures, such as additional armed guards, until final systems components can be installed and their operation verified.

As of February 23, 1979, new security requirements for all power reactors went into effect. Since that time, 69 power reactors have been inspected to determine compliance with the new security requirements. With the exception of escalated enforcement actions, discussed in Chapter 7, the concerned licensees dealt promptly with all items of noncompliance.

Status of Safeguards at Non-Power Reactors. All licensed non-power reactors have operative security plans, required by 10 CFR 73.40, ("Physical Protection: General Requirements at Fixed Sites") for protection against sabotage. Specific safeguards measures for non-power reactors with less than formula quantities of SSNM are not defined in NRC regulations (although the new NRC regulations of July 1979 for these quantities of material apply to any facilities possessing such materials). However, those in effect at such reactor sites include:

• Identification of security areas.

• Security organization.

• Access controls.

NRC safeguards regulations require that all personnel entering critical areas of nuclear reactor facilities be thoroughly searched as a measure of assurance against possible installation sabotage. Here, NRC Resident Reactor Inspector Leif J. Norrholm is subjected to a pat-down search for weapons or possible sabotage devices at the Salem 1 Nuclear Generating Station in New Jersey.

Status of Safeguards at Power Reactors. All operating power reactor licensees have put into effect approved physical security plans meeting the general and specific requirements of 10 CFR 73.55, with some aspects of measures employed against the inside threat being further refined. In this connection, the Commission has deferred the required implementation of certain defensive measures against potential sabotage by a licensee employee inside the facility pending further evaluation of the need and alternatives. These defensive measures include pat-down searches, "two-man

Shipments of special nuclear material are guarded during all phases of transit. Here, guards prepare to offload a truck shipment at a user facility. NRC monitors and inspects SNM shipments, surveys shipping routes, supervises guard and driver training, and, in cooperation with the Department of Transportation, develops standards for every aspect of nuclear material transportation.

• Methods for detecting and reporting intrusions.

Also, non-power facilities with formula quantities of SSNM that are not self-protecting have activated anti-theft measures meeting the specific requirements of 10 CFR 73.50 ("Requirements for Physical Protection of Licensed Activities") and 10 CFR 73.60 ("Additional Requirements for the Physical Protection of Special Nuclear Material at Non-Power Reactors").

Inspection and Enforcement at Reactors. NRC inspection and enforcement activities at reactors also provided a measure for judging the effectiveness of safeguards. During fiscal year 1979, the NRC expended nearly 8,000 hours in on-site safeguards inspections at power reactors, and 2,300 hours at non-power reactors and research facilities. These inspections revealed 385 items of noncompliance with safeguards requirements (see Table 3). NRC has issued two Immediate Action Letters that identify measures which licensees must take to improve their safeguards systems. Three civil penalties, totaling more than $25,000, were issued against three licensees.

vestigation which formalized procedures for information exchange and coordinated response actions between the two agencies. NRC is now coordinating three similar interagency agreements with the Federal Aviation Administration, the National Security Agency, and the Bureau of Alcohol, Tobacco and Firearms. SAFEGUARDS EVENTS— FISCAL YEAR 1979

In December 1978, a licensee shipped four drums containing 4.5 kilograms of highly enriched uranium to Romania, with each drum sealed by the NRC. Upon arrival at the port of embarkation in New York, all four seals were found broken. The NRC inspector examining the drums and seals decided that the contents of the drum had not been disturbed. Consequently, he resealed the containers-without inspecting the contents-and permitted the export of the shipment. When the containers arrived in Romania, the seals that were affixed in New York were found to be intact. The IAEA, upon request, examined the shipment upon arrival, and confirmed that the nuclear material con

Contingency Planning

During fiscal year 1979, the NRC staff reviewed and approved safeguards contingency plans developed by each of the 19 fuel cycle facility licensees authorized to have formula quantities of strategic nuclear material. During this time, the staff also reviewed 28 of 61 safeguards contingency plans developed by power reactor licensees and applicants. Each of the power reactor contingency plans evaluated required certain modifications or additions. None was given final approval during fiscal year 1979.

At the national level, NRC concluded a memorandum of understanding with the Federal Bureau of In

tents were as shipped by the licensee. As a result of this event, NRC has changed its procedures for accounting for the seals that allow inspectors at the destination to determine whether anyone has replaced or tampered with them.

In January 1979, the General Electric Company reported to the NRC that an alleged theft of lowenriched uranium oxide, and an attempted extortion had occurred at its fuel plant at Wilmington, North Carolina. An individual was arrested on criminal charges, and the material was recovered. The material was of no safeguards significance because of the amount and enrichment involved. It represented a minimal health hazard, being less hazardous than

many industrial chemicals. As a result of the incident, the licensee reevaluated its security and accountability system for such materials. For some time, the NRC has been reexamining requirements for the protection of nuclear materials of this type. As a result, new rules are being proposed to prevent future incidents of this type from occurring. (See Chapter 7 for further details on this incident.)

In May 1979, 62 of 64 new fuel assemblies at the Surry Nuclear Power Station in Virginia were found to have been coated with sodium hydroxide, in an apparent attempt at sabotage. Subsequent investigations revealed that two licensee employees were responsible for the act. They were later convicted and sentenced to prison. (See Chapter 7 for further details on this incident.) The NRC has subsequently taken steps to modify its regulations to tighten access controls at such facilities. Requirements being proposed are contained in an Inspection and Enforcement Bulletin, IE Bulletin No. 7416, "Vital Area Access Controls."

As a result of a physical inventory taken in August 1979, Nuclear Fuel Services (NFS) reported that the inventory difference at the NFS plant at Erwin, Tennessee, was in excess of the upper limit specified in the license. (An inventory difference occurs when the total SNM listed in the account books from previous measurements does not agree with the total SNM measured in the most recent physical inventory.) The licensee was ordered to shut down the facility and begin an immediate investigation and re-inventory. NRC sent an investigation team to the site to observe the inventory and verify measurements being made. While the re-inventory results partially explained the inventory difference, the discrepancy was not reduced to a level normally expected as a result of uncertainties in the measurement of nuclear materials. At the end of fiscal year 1979, the facility remained shut down pending resolution of the problem.* The NRC investigation, which included FBI and Department of Energy participation, had not discovered any information (other than the presence of the inventory difference which is of itself indeterminate because of measurement uncertainties) to indicate that a theft of material had occurred. However, the investigation had not been able to rule out that possibility.

SAFEGUARDS REGULATORY
ACTIVITIES

Fiscal year 1979 was an active period in the development and adoption of NRC regulations designed to improve nuclear safeguards. Attempting to solve several

* On January 21, 1980, the facility was permitted to return to production operations after implementation of significant improvements in the physical security, internal control, and material accounting systems.

major safeguards problems also constituted an important part of NRC's activities. Solutions were not always found and efforts to solve some problems must continue into 1980 and beyond, if necessary.

Physical Security. In November 1979, the Commission published the final version of a new regulation designed to upgrade the physical protection of formula quantities of special nuclear material. Any facility holding or transporting five formula kilograms of such material is subject to the new rules. The only temporary exception is non-power reactors, for the reasons indicated below. The regulation will become effective in March 1980. Licensees are expected to implement it by the fall of 1981. The rule indicates performance standards to be met by licensees and presents specific statements about the kinds of threats, from insiders and outsiders, that their safeguards should be able to withstand.

Most non-power reactors are research reactors operated by universities. Applying the new rules must take into account the unique characteristics of a university and its reactor. The universities are concerned that applying the strict new physical security requirements of the regulation will force them to shut down their reactors. They cite unacceptable costs and impact on their education programs. They also cite specific design and fuel features of their reactors. Some of these views appear to have merit, and the NRC is considering whether a balance can be struck between the specific new requirements and alternative ways to achieve the necessary safeguards performance. This problem was not resolved in 1979, and continues to be studied.

Another important problem to be resolved in 1980 relates to the regulation upgrading power reactor physical security safeguards. When first issued in 1977, the rule called for conducting either a physical or an instrument search for the detection of prohibited material. The Commission was petitioned to eliminate the possible interpretation of "physical search" as requiring a "pat-down" search. The issue is under study, and the staff is considering alternatives for the most effective search techniques to be employed. In the interim, instrument searches are routinely employed, supplemented by physical searches when circumstances dictate.

In July 1979, final regulations were published to provide new physical protection requirements for special nuclear materials in less than five formula kilogram quantities-materials of moderate- and lowstrategic significance (Category II and Category III materials). These regulations make the U.S. rules consistent with International Atomic Energy (IAEA) worldwide standards.

Another new rule issued in fiscal year 1979 placed carriers of five or more formula kilograms of special nuclear material under NRC regulation. Formerly, the shippers and receivers, but not the actual

transporters of material, had been under NRC license. A general license has been issued to the carriers, making them directly subject to NRC requirements and inspections.

Requirements of the new interim rule for spent fuel shipments have been discussed in detail earlier in this chapter. The staff must now reassess the need for changes based on public comments, and as may be required by the result of recent research. Among the issues being addressed are routing restrictions, preemption of local ordinances, call-in procedures, and handling of vessels carrying spent fuel.

Transient shipments of formula quantities of special nuclear material are also a matter of concern. A transient shipment is one that temporarily uses U.S. facilities while moving from one foreign country to another. NRC is preparing a regulation that would require protection of such shipments, which usually are carried by an aircraft transiting a U.S. airport. Enforcing such a regulation may pose problems, because it would require that NRC obtain advance details about the shipment, sometimes from sources outside NRC's immediate control.

Transient shipments of spent fuel are a matter of more recent concern. The staff has taken note of growing public concern about the need to provide safeguards protection for such shipments. This concern was highlighted when Representative Heftel and the Governor of Hawaii urgently requested that the NRC adopt regulations to protect transient shipments of spent fuel. These requests came as a result of an unscheduled refueling stop, at Honolulu, by a freighter carrying spent fuel. The NRC plans to analyze the alternatives involved in providing such protection and possible regulatory changes to implement such protection.

Along with its concern about shipments of spent fuel, the NRC also is trying to estimate the potential hazards of sabotage (or theft, if that should occur) at high level nuclear waste storage sites. Conceivably, the radioactive dispersal hazards might be similar to those resulting from sabotage of spent fuel. The staff is also analyzing the alternatives involved in transporting Three Mile Island wastes to disposal sites. When the results of these analyses are known, the staff will address the issue of what safeguards measures, if any, should be required for nuclear waste activities.

The Kemeny Commission's report on the Three Mile Island accident indicated that human attitudes and practices were a principal contributory factor to the accident. In the area of nuclear security, peopleparticularly security managers and guards-play a vital role in ensuring that safeguards systems achieve their intended purpose at all licensed facilities. In response to these concerns, the NRC staff has begun to review how well people perform in the safeguards area. The staff will make recommendations to improve such performance, if appropriate.