Executive summary
Date(s) of inspection:
- May 2024
Aim of inspection
The Office for Nuclear Regulation (ONR) undertakes all regulatory interaction with the Sellafield site licensee (Sellafield Ltd (SL)) against a strategy defined by the ONR Sellafield, Decommissioning, Fuel and Waste (SDFW) Division.
In accordance with this strategy, an inspection of the implementation of Sellafield Ltd’s Counterfeit, Fraudulent and Suspect Items (CFSI) arrangements and sampling of them within the supply chain is planned. This inspection is intended to form part of an ONR integrated and supply chain themed inspection of Sellafield Ltd. Supply Chain and Quality management arrangements for the procurement through to delivery of products and services which support high hazard risk reduction (HHRR)
The aim of the inspection is to ensure that Sellafield Ltd’s (SL) supply chain management arrangements, and the management systems of its suppliers, are adequately controlling risks from CFSI in line with regulatory requirements. Further to that, to ensure there is adequate understanding and implementation of the required CFSI arrangements within SL’s wider supply chain.
ONR’s expectation is that where weaknesses are identified that require action, SL will promulgate good practices.
The inspection will also sample:
The Sellafield Ltd response to ONR alert note on CFSI dated 7 December 2022 (CM9 2023/ 73724)
The planned CFSI management improvements and actions taken as a result of ONR Regulatory Issue 11417 following shortfalls found in the implementation of Sellafield Ltd.'s arrangements for the procurement of operational technology and information technology, and use of “at risk” procurement routes, identified in 2023.
The inspection will consider the requirements of Licence Condition (LC) 17 (1 and 2) Management Systems which requires the licensee to establish and implement management systems which give due priority to safety and within its management system, to make and implement adequate quality management arrangements in respect of all matters which may affect safety.
The inspection will also consider the requirements of Licence Condition 6 (1 and 2) – documents, records, authorities and certificates which requires the licensee to make adequate records to demonstrate compliance with any conditions attached to their licence and to make and implement adequate arrangements to ensure that every document required, every record made, every authority, consent or approval granted and every direction or certificate issued in pursuance of the conditions attached to this licence is preserved for 30 years or such other periods as ONR may approve.
The inspection will consist of:
- a review of relevant documentation supplied by Sellafield Ltd in advance of, and during, the inspection,
- group discussions with SL staff in the Intelligent Customer function and those responsible for CFSI arrangements,
- discussions with SL staff responsible for implementing and working with the arrangements,
- an inspection of SL’s stores at Lilyhall, and
- where appropriate, direct inspection of a selection of SL suppliers (ONR may require pre-meetings with suppliers via Teams or in person where appropriate).
The selection of suppliers will be based on discussions with Sellafield Limited, components that are safety significant, novel and/or there has been relevant OPEX or regulatory intelligence.
ONR will use the evidence gathered during the inspection to inform a regulatory judgement regarding the licensee’s compliance with relevant good practice.
ONR’s purposes are:
- a. Nuclear safety;
- b. Nuclear site health and safety;
- c. Nuclear security;
- d. Nuclear safeguards; and,
- e. Transport (of radioactive materials).
This inspection will focus mainly on matters related to ONR’s nuclear safety purpose.
Any matters seen whilst carrying out this inspection, which cause a concern related to ONR’s other purposes, will be addressed separately by ONR.
Subject(s) of inspection
- LC6 - Documents, records, authorities and certificates - Rating: GREEN
- LC17 - Management systems - Rating: GREEN
Key findings, inspector's opinions and reasons for judgement made
The purpose of this thematic inspection was to seek assurance that Sellafield Ltd.’s supply chain management arrangements, and the management systems of its suppliers, were adequately controlling risks from Counterfeit, Fraudulent and Suspect Items (CFSI) in line with regulatory requirements. Further to that, to ensure there was adequate understanding and implementation of the required CFSI arrangements within Sellafield Limited’s wider supply chain. This was to inform regulatory judgement regarding licenses compliance with relevant statutory provisions and good practice.
The inspection revealed Sellafield are in a period of transition regarding the maturity of their arrangements for managing CFSI, and I acknowledge that further developments are planned to further improve management of risks from CFSI across the enterprise.
I identified that relevant good practice was generally met though there were some minor shortfalls identified when compared with appropriate benchmarks. The minor shortfalls related to enterprise-wide standards for quarantine, enterprise wide CFSI awareness and enhanced inspection and testing methods for items from at-risk procurement routes (IAEA guidance, NP-T-3.26 defines at-risk procurements as “…such scenarios are those known to have a higher than normal risk of receiving CFSI from a vendor”). I also raised a number of observations for Sellafield Ltd. consideration which will be followed up via routine engagements.
The four suppliers inspected demonstrated knowledge of CFSI risks and their impact on nuclear and conventional safety and security with some good practice observed. However:
“Management of CFSI by any supplier includes managing the risks from, and thereby reducing the likelihood of dishonesty and malpractice within that supplier’s own organisation; and 'importing' sub-standard items, or receiving unsatisfactory services, from other organisations in relation to that supplier’s final products.” (TAG 77)
All suppliers had, to a greater or lesser extent, some weaknesses in their arrangements thereby increasing the risk that counterfeit, fraudulent or suspect items could be provided and/or installed at Sellafield Ltd premises.
When considered together the inspection results could be viewed as themes which Sellafield Ltd should consider and make any necessary improvements in its arrangements to better assess and monitor their supply chains arrangements for reducing risk from CFSI. The themes identified included:
- Inconsistencies in records management, records review, and records storage.
- Ambiguity in supplier CFSI policies and processes.
- Lack of reference to good practice.
- Lack of clear risk-based process for CFSI risk-based testing/checks on software and related assurance activities.
- Lack of check of onward cascade of CFSI information to lower tiers.
- Inconsistent oversight of lower tier suppliers.
Conclusion
Following discussions with the Inspectors involved in the inspection, I have concluded that an inspection rating of Green, no formal action, is appropriate against Licence Conditions 17 (management systems) and Licence Condition 6 (records). I considered that relevant good practice was in general being met with minor shortfalls identified when compared to appropriate benchmarks.
During the inspection feedback meeting I outlined my intent to raise appropriate regulatory issues to capture the identified shortfalls and to monitor Sellafield Ltd progress in making improvements. I provided regulatory advice and guidance relating to identified areas for improvement, and I raised observations for Sellafield Ltd to consider, these will be followed up via routine engagements.
Sellafield Ltd. agreed with my findings, the overall inspection rating and considered the feedback I provided was balanced.