Leadership and Organizational Aspects.

1. Leadership and Organizational Aspects. Mike Weightman HM Chief Inspector of Nuclear Installations Inspectorate and Director of Nuclear Directorate

2. Nuclear Hazards are unique (1) – getting it wrong leads to wide spread long lived potential consequences

3. Nuclear Hazards are unique (2) - Nuclear Security and Safeguards 2007 OCNS and UKSO Join NII to form Integrated Nuclear Regulatory Body

4. Nuclear Hazards are unique (3) – Public Concern Sellafield

5. Nuclear Hazards are Unique (4) – but controllable • Need: • Excellence in design, supply, construction and operation • Uniquely high standards but only where appropriate • Strong independent effective transparent regulation

6. Context – The Global Scene • Climate Change and Energy Security moving to top of Political Agenda • Over 50 nations with no NPPs asking IAEA for assistance to develop Nuclear Power capability • Nuclear Power capability predictions (OECD’s NEA): • June 2008 439 reactors operating – 372 GW • 2050: Worlds nuclear power capacity could increase by between 150 – 380% • Equivalent to new build of 23 to 54 reactors worldwide a year between 2030 and 2050 • Supply chains are longer more complex and less robust than during earlier new build programmes

7. Context – The European Scene Over 140 reactors spread over 15 member states Generate about a 1/3 of all electricity energy in EU EC actively promoting further use of nuclear energy for electricity but issues remain - confidence in decommissioning and waste management New European Directive on Nuclear Safety, one coming on Waste Management New EPR reactors being constructed in Finland and France – problems with supplyand construction leading to delays and cost escalation, and regulatory Issues Concern about robustness of isotope production Source – European Nuclear Society (June 2010 operating and under construction)

8. Context – The UK Scene Decline of UK nuclear industry 2000 – 2008 Market share of Nuclear Generated Electricity dropping: 1997-27%, 2007-15% But Switch round in Government Policy – Energy White Paper January 2008 Potential of up to £60b investment in nuclear new build – 10 reactors in operation by 2025? Planned NDA spend – Over £70b Investment in keeping the existing NPPs running Planned spend £2.65b over 3 years in MOD – rate similar to reactor build Continuing new build of Submarines and improved refuelling facilities Social/Political/Industrial/Economic Environment – Massive Change

9. The Global Scene – The Challenges • Nuclear Safety • Waste Management and Disposal • Non-proliferation and security • Building the capacity: • IAEA advice – around 10 years to build the administrative and industrial infrastructure • 10 years to build a plant from scratch • Building the people and supply base • Nuclear Energy and Society • Impact on existing regulatory resources and approaches (Source: OECD NEA report – Nuclear Energy Outlook)

10. Nuclear Regulatory Framework remains the same: Goal setting (But accelerating move to security goal setting regime) Flexible (variety of sizes, types of nuclear activities) Firm basis: (takes account of IAEA standards, International Conventions and good practice) Proportionate (Regulatory requirements/interest depends on significance) BUT … UK Regulatory Response to Shift In UK/European/Global Environment:

11. Changing How it is Delivered: Building on the last successful 50 years to create a forward looking integrated World Leading Nuclear Regulatory body fit for the next 50 years  More outcome focused, dynamic, responsive, integrated, transparent/open and accountable, obviously independent, nuclear regulation UK Regulatory Response to Shift In UK/European/Global Environment:

12. Changing the UK Nuclear Safety Regulatory Body – NII into Office for Nuclear Regulation Vision: a world leading integrated nuclear regulatory body fit for future • An Integrated Nuclear Regulator – Safety/Security/Safeguards/ …. • Clear Common Purpose • A new approach and focus - Built on Outcomes not just processes • Impact or leverage of our approach - Influencing as well as Regulating • Listening and Responding to Stakeholder concerns • Preparing for Nuclear New Build taking account of a changing society – earning trust and confidence • Securing the Enablers to be always fit for the future

13. An Integrated Nuclear Regulator Safety Security Safeguards Same Purpose– Protection Same Principlesto Achieve Protection – multiple barriers, diversity, etc SameProcesses– Assessment, Permissioning, Inspection, Enforcement, Influence

14. The common purpose of the integrated nuclear regulator To Secure the Protection of People and Society .

15. Context of Shift In UK/European/Global Environment - Impact on Leading and Managing for Quality Massive Opportunities for Suppliers, Constructers, Operators But risks to whole if get it wrong: present operations, new build, decommissioning – interconnected in terms of public, governmental, investor and customer confidence and trust So questions: Do suppliers, constructers, operators, etc understand the context? Do they understand how to respond? Are they ready for new ways of working? Does the supply chain have the capability & capacity to deliver the quality required? Quality is key – examples in UK programme civil and defence, more examples internationally

16. Leadership matters! • Leadership failures associated with many Majors Events: • Recognised by IAEA: • One of 10 its Fundamental Principles • Leadership and Management for Safety

17. Why does it matter? • Organisational and cultural weaknesses are invariably underlying factors in major accidents/events • This holds true for a wide range of sectors including nuclear • It holds true regardless of the specific technical (direct) causes of the accidents • It happens to ‘good’ companies • They were not trying to have an accident!

18. Why leadership for quality matters Leaders Leverage Organisational Learning 10000x Organisational Vision Mind map Culture 1000x Potential Impact on Quality Systems Structures 100x Patterns Processes 10x 1x Events Plant/ Operations Regulate Influence Leaders establish visions and cultures for better or worse, whether they intend to or not and it can have far greater impact than other things they do.

19. IAEA Safety Requirements: Management Responsibility Management Commitment Senior management shall develop individual values, institutional values and behavioural expectations …. and shall act as role models… Senior management shall ensure that it is clear when, how, and by whom decisions are to be made….

20. IAEA Safety Requirements: Management Responsibility • Satisfaction of Interested Parties “The expectations of interested parties shall be considered by senior management in the activities and interactions in the processes of the management system, with the aim of enhancing the satisfaction of interested parties while at the same time ensuring that safety is not compromised.”

21. IAEA Safety Requirements: Management Responsibility Policies (1) Top tier • Organizational Policies: “As part of the management system, senior management should develop and disseminate throughout the organization a documented set of policies that establish the management’s plans, objectives and priorities with regard to safety, health, environmental, security, quality and economic considerations. The policies should reflect the commitment of senior management to attaining their goals and objectives; their priorities; and the means by which continual improvement will be implemented and measured. “

22. IAEA Safety Requirements: Management Responsibility Policy (2a) Contents “The policies: —Should be appropriate to the purpose and the activities of the organization and should contain statements on safety, health, environmental, security, quality and economic considerations; —Should include a commitment to comply with management system requirements and to seek continual improvement; —Should be aligned with and should support the development of a strong safety culture;

23. IAEA Safety Requirements: Management Responsibility Policy (2b) Contents —Should provide an appropriate framework for action and for establishing and reviewing goals and objectives; —Should be reviewed periodically for their continuing suitability and applicability; —Should be effectively communicated, understood and followed within the organization; —Should commit management to providing adequate financial, material and human resources.”

24. IAEA Safety Requirements: Management Responsibility Planning “Senior management shall establish goals, strategies, plans and objectives (aka collectively as a “business plan”) that are consistentwith the policies of the organization Senior management shall develop the goals, strategies, plans and objectives of the organization in an integrated manner so that their collective impact on safety is understood and managed Senior management shall ensure that measurable objectives for implementing the goals, strategies and plans are established through appropriate processes at various levels in the organization. Senior management shall ensure that the implementation of the plans is regularly reviewed against these objectives and that actions are taken to address deviations from the plans where necessary.”

25. IAEA Safety Requirements: Management Responsibility Responsibility and Authority for the Management System “Senior management shall be ultimately responsible for the management system and shall ensure that it is established, implemented, assessed and continually improved.”

26. Leadership and Management for Safety SAPS: Four Interrelated Principles “The organisation should have the capability to secure & maintain the safety of its undertakings”… Capable Leadership Organisation Decision Learning Making

27. Leadership and Management for Safety SAPS: Four Interrelated Principles Leadership (MS1) Directors, managers and leaders at all levels should focus the organisation on achieving and sustaining high standards of safety and on delivering the characteristics of a high reliability organisation Capable Organisation (MS2) The organisation should have the capability to secure and maintain the safety of its undertakings Decision Making (MS3) Decisions at all levels that affect safety should be rational, objective, transparent and prudent Learning from Experience (MS4) Lessons should be learned from internal and external sources to continually improve leadership, organisational capability, safety decision making and safety performance

28. Leadership (MS1) Key Factors: • Nuclear Safety Policy – deeds not just words • Actions demonstrate commitment to safety • Resolution of conflicts between safety and other goals • Reward systems to promote the control of risks and accident prevention • Oversight of safety performance

29. Capable Organisation (MS2) Key Factors: • Adequate resources • Competence (including directors) • Intelligent customer capability • Knowledge management • Organisational design & management of change

30. Decision Making (MS3) Key Factors: • Safety priorities evident indecision making • Basis for decisions (including limitations of information sources eg KPIs) • Management of conflicting goals – safety versus other goals (commercial etc) • Conservative decision making • Active challenge (expected / encouraged)

31. Learning (MS4) Key Factors: • Willingness to learn and from a wide . Diverse range of sources • Benchmarking (within industry and more widely) • Implementing lessons and effectiveness reviews

32. What we need from leaders in industry • Success! • Outcome: Quality right first time every time • Commitment to: • Vision of Sustained Excellence (RNIP) • Culture of: • Quality means success • Mutual learning from experience and feedback to drive continuous improvement and excellence in delivery • Open and transparent relationships: no surprises • Clear expectations

33. Summary (1) • The World, European and UK operating environment is changing massively • The Nuclear Regulator has and is responding and changing • The UK Nuclear Regulatory system is flexible, outcome focused and proportionate – the requirements for quality standards are based on safety/security significance • UK Nuclear Industry on cusp of massive opportunities • It is of political, social and economic importance to the UK • The UK government and society depends on you getting quality right

34. Summary (2) We Need You Succeed by: • Living the Vision • Establishing & Promoting the Culture • Organising to deliver the vision and supporting the culture • Managing for delivery of right quality, right time, every time That way we will be able to fulfil our regulatory purpose of:

35. Securing the Protection of People and Society