Answers to Some Questions
I have already reported on my visit to Japan a couple of months ago and the presentation I gave to some Japanese executives. In that talk, I focused on the US Nuclear Regulatory Commission (NRC) as an example of an agency that behaves in an open and independent manner. I got a couple of interesting questions on NRC's openness and independence at the conclusion of my talk. I tried to answer them at that meeting, but I have been wanting to expand upon my answers and share them with a wider audience.
The basic question was, "How can NRC say it is independent and open when individuals in the NRC meet privately with people in industry?"
In thinking about the question and the reason behind it, I feel that sometimes, people interpret the word independence too literally. Especially as Japan implements the changes to the way its regulatory system works, it is important to keep several things in mind.
In fact, NRC addressed this very concern when its Principles of Good Regulation were written. They explicitly state that "independence does not imply isolation." Therefore, independence should not be viewed as requiring regulators to cut off all contact with the rest of the world. Rather, it should be viewed as a process that allows regulators to have access to all information and all points of view and assures that decisions take all relevant information into account and treat it appropriately.
The International Atomic Energy Agency (IAEA) has a tutorial on the regulatory control of nuclear power plants on its website that gives a great explanation of regulatory independence at the NRC. They outline 8 elements that facilitate regulatory independence (I have provided somewhat abbreviated versions of most of their descriptions of these elements):
Separation of functions: NRC has no responsibility for promoting or developing nuclear energy, and is completely separate from government bodies having such mandates.
Political influence: No more than three of the five NRC Commissioners can come from a single political party, and Commissioners may also only be removed for "cause." Acceptable causes for removal are limited to inappropriate behavior, and not based on a Commissioner's viewpoints.
Conflicts of interest: Neither the NRC Commissioners or staff can have any financial or personal interest in organizations that may be subject to their regulatory decisions. I would also add that neither Commissioners or the NRC staff can accept gifts, meals, or other favors from anyone subject to their regulatory decisions.
Openness: NRC’s decision-making process is conducted in public. The Government in the Sunshine Act requires advance public notice of meetings, with a right of attendance by interested parties. The Freedom of Information Act requires broad public access to any materials used in the decision-making process.
Reporting: NRC provides extensive information related to all aspects of its activities and decisions to the public, media, other governmental bodies, without the need for review or clearance from any other government agency.
Budget and finance: Almost all of NRC's budget is covered by fees paid by licensees, as authorized in an annual appropriations act by the Congress. The IAEA asserts that this "full cost recovery" approach is believed to provide at least some insulation from political pressures that could result from having its resources derived entirely from tax revenues. (As an aside, I want to point out that the cost recovery provision was not instituted for this reason, and I think the pros and cons of this provision could be debated--but that is not the subject of this discussion.)
Technical capabilities: NRC has a large staff with a high degree of technical competence that covers cover a wide range of technical areas. This gives them adequate scientific, engineering, management, financial and legal expertise to regulate a complex technology like nuclear power, and assures that they can assess information provided by licensees independently and competently.
Oversight mechanisms: NRC is subject to several layers of review and oversight. These include the Office of Inspector General (an independent, internal body), Congressional oversight, and reviews of NRC decisions by the courts.
The IAEA discussion notes that these measures, taken together, are designed to help assure that safety decisions are not influenced by political, economic or social considerations. Having such assurance helps maintain public confidence in the safety of nuclear energy, which is critical to the continued use of nuclear power in democratic societies.
Tellingly, the IAEA list is preceded by a discussion saying that it is somewhat difficult to "define" regulatory independence, and followed by a discussion that acknowledges that the system is not perfect. I think these comments reflect the dilemma I felt when tried to address the question in a public forum.
There is always a balance. I have to admit that, on the surface, someone who sits alone in an ivory tower and doesn't talk to anyone else clearly cannot be influenced by anyone else. That is easy to see. Once someone meets with other people, it is much harder to be sure that they are not unduly or inappropriately influenced by others. However, if they do not meet with other people, they will not have all the facts to allow them to make good decisions about complex and difficult issues. The two needs, independence and access to information, must both be satisfied.
In the end, independence without isolation is achieved by a variety of checks and balances designed to help assure that NRC staff and Commissioners can obtain all the information they need, but that their decisions remain independent and technically sound.
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