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NUREG/CR-6735 Effects of Deregulation on Safety: Implications Drawn From the Aviation, Rail, and United Kingdom Nuclear Power Industries Center for Human Performance and Risk Analysis University of Wisconsin-Madison U.S. Nuclear Regulatory Commission A Office of Nuclear Regulatory Research Washington, DC 20555-0001 AVAILABILITY OF REFERENCE MATERIALS IN NRC PUBLICATIONS NRC Reference Material Non-NRC Reference Material As of November 1999, you may elep-"*-;,,%;ally access Documents available from public and special technical NUREG-series publications and other NRC records at libraries include all open literature items, such as NRC's Public Electronic Reading Room at books, journal articles, and transactions, Federal www.nrc.gov/NRC/ADAMSfindex.html. Register notices, Federal and State legislation, and Publicly released records include, to name a few, congressional reports. Such documents as theses, NUREG-series publications; Federal Register notices; dissertations, foreign reports and translations, and applicant, licensee, and vendor documents and non-NRC conference proceedings may be purchased correspondence; NRC correspondence and internal from their sponsoring organization. memoranda; bulletins and information notices; inspection and investigative reports; licensee event Copies of industry codes and standards used in a reports; and Commission papers and their substantive manner in the NRC regulatory process are attachments. maintained at The NRC Technical Library NRC publications in the NUREG series, NRC Two White Flint North regulations, and Title 10, Energy, in the Code of 11545 Rockville Pike Federal Regulations may also be purchased from one Rockville, MD 20852-2738 of these two sources. 1. The Superintendent of Documents These standards are available in the library for U.S. Government Printing Office reference use by the public. Codes and standards are Mail Stop SSOP usually copyrighted and may be purchased from the Washington, DC 20402-0001 originating organization or, if they are American Internet: bookstore.gpo.gov National Standards, from Telephone: 202-512-1800 American National Standards Institute Fax: 202-512-2250 11 West 4 2 nd Street 2. The National Technical Information Service New York, NY 10036-8002 Springfield, VA 22161-0002 www.ansi.org www.ntis.gov 212-642-4900 1-800-553-6847 or, locally, 703-605-6000 A single copy of each NRC draft report for comment is Legally binding regulatory requirements are stated available free, to the extent of supply, upon written only in laws; NRC regulations; licenses, including request as follows: technical specifications; or orders, not in Address: Office of the Chief Information Officer, NUREG-series publications. The views expressed Reproduction and Distribution in contractor-prepared publications in this series Services Section are not necessarily those of the NRC. U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 The NUREG series comprises (1) technical and E-mail: DISTRIBUTION @nrc.gov administrative reports and books prepared by the Facsimile: 301-415-2289 staff (NUREG-XXXX) or agency contractors (NUREG/CR-XXXX), (2) proceedings of Some publications in the NUREG series that are conferences (NUREG/CP-XXXX), (3) reports posted at NRC's Web site address resulting from international agreements www.nrc.gov/NRC/NUREGSfindexnum'html (NUREG/IA-XXXX), (4) brochures are updated periodically and may differ from the last (NUREG/BR-XXXX), and (5) compilations of legal printed version. Although references to material found decisions and orders of the Commission and on a Web site bear the date the material was Atomic and Safety Licensing Boards and of accessed, the material available on the date cited may Directors' decisions under Section 2.206 of NRC's subsequently be removed from the site. regulations (NUREG-0750). DISCLAIMER: This report was prepared as an account of work sponsored by an agency of the U.S. Government. Neither the U.S. Government nor any agency thereof, nor any employee, makes any warranty, expressed or implied, or assumes any legal liability or responsibility for any third party's use, or the results of such use, of any information, apparatus, product, or process disclosed in this publication, or represents that its use by such third party would not infringe privately owned rights. NUREG/CR-6735 Effects of Deregulation on Safety: Implications Drawn From the Aviation, Rail, and United Kingdom Nuclear Power Industries Manuscript Completed: June 2001 Date Published: August 2001 Prepared by V.M. Bier, University of Wisconsin-Madison J.K. Joosten, Connect-USA.com J.D. Glyer, J.A. Tracey, M.P. Welsh, Laurits R. Christensen Associates, Inc. Center for Human Performance and Risk Analysis University of Wisconsin-Madison 1513 University Avenue, Madison, WI 53706 Connect-USA.com 25131 Chambliss Court Gaithersburg, MD 20882 Laurits R. Christensen Associates, Inc. 4610 University Avenue Madison, WI 53705 Paul M. Lewis, NRC Project Manager Division of Systems Analysis and Regulatory Effectiveness Office of Nuclear Regulatory Research U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 NRC Job Code K6892 Abstract Changes associated with economic deregulation of the U.S. electricity supply industry are causing major restructuring, with the potential to affect nuclear power safety. This study was undertaken to identify possible consequences of deregulation for nuclear power safety. A historical case study approach was adopted (using literature reviews and interviews), focusing on the U.S. aviation and rail industries and the United Kingdom nuclear power industry because of their relevance to the U.S. nuclear power industry. Overall, the experience of the case study industries suggests that economic deregulation need not be incompatible with a reasonable safety record, especially in areas where safety is positively related to productivity. However, safety clearly cannot be taken for granted after deregulation, since adverse effects on safety were observed in each of the three case study industries. Among the most notable of those involved financial pressures, safety culture problems associated with mergers and acquisitions, increased use of contractors, and downsizing. The magnitude and speed of such changes can create major challenges to the management of safety. Careful review and study of the problems observed in the case studies may make it possible to identify proactive ways of minimizing similar safety problems in the U.S. nuclear power industry. iii Table of Contents A bstract ..................................................... ..... ... .. *..111 List of Figures ................................................ ............. x List of Tables ................................................. Executive Sum m ary ............................................ S........... xiii Acknowledgm ents ............................................. S.......... xvii .1-1 1. Introduction ............................... ,.. •. 1-1 1.1 Background ........................... ... ... o. °.. 1-2 1.2 Approach ........................ S.. •.. .° .. •.. •. .• 1-2 1.3 Choice of Case Study Industries ........... ° 1.4 Outline of This Report .................. °. °. °.. ° . °.. °. 1-4 2. Aviation Deregulation Literature Review .................................. 2-1 2.1 Introduction ..................................................... 2-1 2.2 Regulatory H istory ............................................... 2-1 2.3 General Safety Trends ............................................ 2-3 2.4 Equipment Failure and Maintenance ................................. 2-4 2.5 H um an Error .................................................... 2-7 2.5.1 Pilots .................................................... 2-7 2.5.2 M echanics ................................................ 2-10 2.6 Financial Pressures ............................................... 2-11 2.7 A ging A ircraft ................................................... 2-12 2.8 N ew Entrants .................................................... 2-13 2.9 M ergers and Acquisitions .......................................... 2-15 2.10 Reduction of Support Services ...................................... 2-16 2.11 Labor Relations .................................................. 2-17 2.12 Implications for the Federal Aviation Administration .................... 2-18 2.13 Summary-Impacts of Deregulation on Aviation Safety .................. 2-20 2.14 E ndnotes ....................................................... 2-22 3. Aviation Industry Interviews ............................................. 3-1 3.1 B ackground ...................................................... 3-1 3.2 Summ ary of Interviews ............................................. 3-2 3.2.1 The most important safety issues in the aviation industry ............ 3-2 . 3.2.2 Did deregulation affect safety? .... 3-3 3.2.3 What explains the safety improvement observed . shortly after deregulation? .... 3-3 3.2.4 What explains the deterioration in safety performance observed in the mid-1980s? .... 3-4 v 3.2.5 How has the Federal Aviation Administration performed since deregulation? .... 3-5 3.2.6 Corporate culture and the environment for reporting safety violations ............................................ 3-5 3.2.7 How do safety issues differ for the smaller carriers? . .. 3-6 3.2.8 The impact of mergers on safety ................................ 3-7 3.2.9 Employment and experience levels ............................. 3-8 3.2.10 Changes in maintenance practices
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