The Nuclear Regulatory Commission October 1 fined Thermal Science, Inc. (TSI) $900,000 for "deliberately providing inaccurate or incomplete information to the NRC concerning TSI's fire endurance and ampacity testing programs." TSI manufacturers the controversial Thermo-Lag fire barrier, declared "inoperable" by the NRC in 1992.
It was the second-largest fine in agency history, and by far the largest for a contractor. The NRC issued nine rarely-invoked Severity Level I violations to TSI. The standard fine for a contractor for such a violation is $10,000 per violation. But the NRC instead levied its statutory maximum of $100,000 for each violation "in order for TSI to understand the magnitude of NRC concern that TSI's actions are unacceptable for a licensee contractor and to provide TSI an appropriate incentive to ensure that it provides the NRC complete and accurate information in the future..."
According to a October 1 letter from James Lieberman, Director of NRC's Office of Enforcement, TSI in writing and in oral statements made by its president, Rubin Feldman, submitted "inaccurate and/or incomplete information" about tests conducted on its Thermo-Lag fire barrier. The inaccurate statements began in October 1991 and continued through August 1992, according to the letter.
Wrote Lieberman, "These misrepresentations include statements by TSI that 1) Thermo-Lag products had been subjected to independent testing; 2) TSI had no knowledge of deviations from its installation procedures; and 3) Underwriter's Laboratories (UL) had total control of ampacity testing performed at UL facilities and that these test results were the 'most conservative data' available to TSI. Contrary to TSI's representations, the NRC's review has determined that: (1) Thermo-Lag product test was actually performed by TSI with only minimal involvement of ITL [Independent Testing Laboratories]; (2) TSI had knowledge of installation deviations occurring at licensee facilities; and (3) the ampacity derating tests performed at UL were not under the total control of UL and the data presented by TSI concerning these tests was not 'the most conservative data' available to TSI."
The charges are similar, though at least in some cases not identical, to those prosecuted by the Justice Department in a criminal trial of TSI and Rubin Feldman last year. Both were acquitted of those charges.
Trial observers believed that a key reason for the acquittal was the NRC's failure to order the material removed and replaced from the nation's reactors. After all, if the NRC thought the barrier was so bad why didn't they remove it. If it was good enough to still be used, then why prosecute the company, seemed to be the jury's reasoning.
In a written statement, TSI said it will contest the fine, and noted that "since the trial, the NRC has continued to approve the use of Thermo-Lag in nuclear plants."
TSI will first appeal the fine to the NRC staff, then the Commissioners, and then likely in court.
At one point, Thermo-Lag was used as a primary fire barrier in some 79 reactors. However, a number of utilities have either removed the material or taken other measures, so that 46 reactors are now still relying on Thermo-Lag for their fire barriers.
NIRS, which first filed a petition calling for the removal of Thermo-Lag in mid-1992, repeated its demand that the material be removed and replaced from all the nation's reactors immediately.
Said Paul Gunter, Director of NIRS' Reactor Watchdog Project, "The NRC has now fined the company for lying about its product's quality but all that has been done by the industry and the regulator is to paper over the problem. As long as the NRC and the utilities have been aware of this problem, they have only been able to generate stacks of paper that would really be more effective as a fire barrier than Thermo-Lag itself.
"The NRC should have ordered this combustible material removed and replaced years ago," continued Gunter. "Because of a multimillion-dollar price tag to remove Thermo-Lag and replace it with a fire barrier that works, the nuclear utilities have successfully stalled any effective action to protect the public in the event of fire."
This article appeared in the October 1996 Nuclear Monitor, published by Nuclear Information and Resource Service.
UPDATE, October 2002
Thermal Science Inc. has requested that NIRS update the above article. As the story makes clear, TSI was acquitted of criminal charges related to the use of Thermo-Lag. And, as the story indicated it would, TSI did appeal the fine levied on it by the NRC. According to TSI, “In summary, the NRC again claimed that TSI made misrepresentations to the NRC concerning its product, Thermo-Lag. The NRC claims were substantively identical to the claims made in the above criminal case. In December, 1999, TSI and the NRC agreed to a settlement of all matters in the administrative proceeding, and TSI paid a reduced fine to the NRC. TSI reaffirmed in the settlement that it never intended to mislead the NRC and it expressed its full agreement with the NRC that it is essential for those dealing with the NRC to provide the agency with accurate information. The NRC acknowledged in the agreement that the settlement did not in any way represent an admission of any regulatory violation by TSI. The settlement finally and conclusively terminated all litigation between TSI and the NRC.”
According to the St. Louis Post-Dispatch of December 15, 1999, in an article titled “Thermal Sciences will pay $300,000 settlement,” the amount of the final settlement was $300,000. The article states, “According to the settlement, the company did not admit wrongdoing, and the NRC cannot call the settlement a fine.”