§1504.107 Formal OFI proceedingsdiscovery.

(a) To the extent that it undertakes an enforcement or other regulatory action which requires an agency hearing on the record or which otherwise could result in the imposition of serious sanctions against the responding person, the OFI will gather the necessary information through interrogatories, document production, depositions, and other forms of discovery.

(b) The rules governing such discovery will appear as part of the OFI's rules of practice and procedure, 10 CFR part 1508.

(c) Unjustified refusal to comply with discovery requests may result in the OFI issuing a subpoena compelling compliance, as per §1504.108.

1504.108 Formal OFI proceedings— subpoenas.

(a) Justification. If the discovery request for information is refused, as per §1504.107(c), if a requested witness refuses to appear, or if a party refuses to produce evidence, the OFI may issue a subpoena compelling discovery, attendance, or production under this section. (b) Issuance. Subpoenas justified under §1504.108(a) may be issued by the OFI presiding officer on his or her own motion or on a motion filed with the presiding officer by any party to the OFI proceeding. Subpoenas will be issued if the presiding officer finds that the information requested is necessary to the duties of the OFI and should not otherwise be withheld.

(c) Contents. Subpoenas will bear the OFI name and seal, the name and position of the issuing officer, and the title of the proceeding. Subpoenas will command a named person to testify or produce reasonably described evidence or information at a designated time and place. The subpoena will contain the statutory basis for the request of the information and how the requested information is relevant to the execution of OFI's authority.

(d) Service. Service will be accomplished in accordance with §1504.104(d).

(e) Motion to quash. A motion to quash a subpoena may be made no more than 5 calendar days from the date of service. Such motion shall be filed with the OFI presiding officer who

issued the subpoena (and where appropriate served on the party applying for the subpoena) and shall set forth specific reasons why the information requested is clearly not necessary for the OFI to carry out its duties, or should otherwise be withheld. The OFI presiding officer may deny or grant the motion in whole or part; stay or extend the time for compliance; or modify the subpoena as appropriate.

§ 1504.109 Formal OFI proceedings— compliance orders.

When a subpoena issued pursuant to §1504.108 has been neither quashed nor satisfied, the OFI may issue a compliance order in accordance with the procedures set forth in § 1504.105.

§ 1504.110 Formal OFI proceedings— judicial enforcement.

Judicial enforcement of a compliance order, issued under §1504.109, may be sought in accordance with §1504.106.

Subpart B-Treatment of "Sensitive" and "Business" Information

§ 1504.201 General policy.

(a) The OFI agrees in advance to resist disclosure of "sensitive" information, a narrow category including national security, trade secret, critical procurement, and secrecy agreement information.

(b) For "business" information, however, the OFI only agrees to the following: (1) To give to the submitter notice and opportunity to object; and (2) to balance the competing interests as to disclosure.

§ 1504.202 Document categories.

(a) The "sensitive" category is very narrow, only including documents which, except under court order, should in no case be distributed outside the government (and in most cases retained just within the OFI). The following types of information are "sensitive":

(1) Documents classified for national security reasons are "sensitive", the only contemplated examples of which relate to the reciprocal procurement review with the Northern Pipeline Agency in Canada.

(2) Trade secrets, as explained and defined in §1504.203(b) for this particular context, also come within the "sensitive" category.

(3) Critical procurement information, particularly tentative bids, price and vendor conditions, come within the "sensitive" designation.

(4) The "sensitive" category also includes information originally received by the submitter under a bona fide secrecy agreement from the third party originator of the information.

(5) There could possibly be other documents received under circumstances warranting limited or no distribution. Privileged information developed during non-ANGTS litigation, for example, might warrant an OFI agreement to resist disclosure. Privacy considerations might also be relevant here. Because "sensitive" designation of this type of information is presently only hypothetical, it will receive no elaboration in § 1504.203.

(b) The "business" category entails information either developed at a cost and possessing demonstrable market value or the release of which may substantially impair the competitive position of the person who supplied it, whether an ANGTS sponsor or another. This is basically proprietary information, disclosure of which would reduce or eliminate its value to the submitter. Unlike "sensitive" information, “business" information may, under certain circumstances, be disclosed to the public. The OFI will balance the economic impact of disclosure against the public interest in access.

§ 1504.203 Factors governing designation of information as "sensitive". (a) National Security. While relatively rare, the first type of "sensitive” information to be protected by the OFI is "classified" information. Through a formal U.S.-Canadian exchange of diplomatic notes establishing reciprocal procedures to administer procurement oversight, the OFI is required to maintain the "confidentiality" of certain information disclosed by the Northern Pipeline Agency. Such information would constitute "foreign government information" and as such would be classified as "confidential" under Executive Order 12065. During the limited

period of the procurement process, while this information continues to be “confidential," the OFI will deny public access under FOIA exemption (b)(1), that is, information properly classified under Executive Order as "in the interest of national defense or foreign policy." (See §1504.317(a)(1) of subpart C of this part).

(b) Trade Secrets. Trade secrets are the core of the "sensitive” category:

(1) The ANGTS sponsors might have to contract for some highly specialized, technical, and secret process or mechanism instrumental to the design or construction effort.

(2) Public disclosure of the process itself-as contrasted to what was produced by use of the process-would cause the contractor severe economic and competitive loss. Disclosure of such trade secrets is not in the public interest, for it could both hamper project expedition and also escalate construction costs.

(3) The OFI will resist any FOIA request for such information, as well as discourage requests from other agencies or Congressional committees, unless adequate protections are provided. FOIA exemption b(4)—while broader than just trade secrets-will be employed. (See §1504.317(a)(4) of subpart C of this part). So too, the Trade Secrets Act prohibition against unauthorized disclosure applies primarily to information like these trade secrets.

(4) While the term "trade secret" has varying connotations depending on the legal context, the OFI will use the following criteria to discern if information is a trade secret, solely for the purpose of bringing it within the "sensitive" category:

(i) The cost of developing the information;

(ii) The value of the information to the owner and competitor, i.e., the extent of the competitive advantage it provides;

(iii) The extent to which the information is not independently known or available to others; and

(iv) The extent to which the owner has maintained its confidentiality.

(c) Secrecy agreements. The OFI will scrutinize information under secrecy agreements from a narrow perspective similar to that employed for trade se

crets. These secrecy agreements could well be insisted upon by the trade secret owner contracting with the ANGTS sponsor. The OFI will closely review such secrecy agreements to assure that they are:

(1) Necessary, in terms of the sponsor being able to gain possession of the information on reasonable conditions;

(2) Enforceable against the submitter, i.e., through civil damages; and

(3) Not formed to circumvent the OFI's regulations limiting special treatment for "sensitive" information.

(d) Critical Procurement. Critical procurement information will be protected through the FOLA (b)(4) exemption, and includes primarily tentative bids (price vendor, and conditions), disclosure of which before completion of the process could skew the procurement, leading to delay and/or cost escalation. Critical procurement information of the ANGTS sponsors will also retain the "sensitive" designation subsequent to the award of a contract.

$1504.204 Factors governing designation of information as “business”. (a) Proprietary nature. "Business" information is proprietary, commercial or financial information, the release of which may substantially impair the competitive position of the person who supplied it, whether an ANGTS sponsor or another. In the majority of cases, the ANGTS sponsor will incur substantial costs to develop or purchase numerous studies, plans, designs, methods, systems, etc., associated with project completion. While not "sensitive" information, these documents nonetheless possess some value; that is, the sponsors might at some time find a willing buyer for the information.

(b) Treatment. "Business" information generally comes within FOIA exemption b(4), but the OFI is not committed necessarily to resisting its public disclosure. Instead, the OFI will balance the economic harm of disclosure against the public interest supporting the access request. In so doing, the OFI will first notify the submitter of "business" information that a request for access has been made or that the OFI on its own initiative intends to disclose it, as detailed in §1504.208. The

submitter will then have the burden of proving to the OFI that the requested information is truly valuable and that disclosure will reduce or eliminate that value.

(c) Factors against disclosure. While OFI disclosure of such information would not, strictly speaking, impair competitive position, it might reduce or eliminate the potential for revenues from a future sale. Beside this general economic impact, the OFI will consider the following ANGTS-specific factors militating against disclosure:

(1) For "business" information merely held by an ANGTS sponsor but owned by a third party, such as procurement-related information of a prospective vendor or contractor, public disclosure might be shown to impair the sponsor's ability to procure future goods and services at a reasonable price.

(2) To the extent that "business" information is utilized by the sponsors for ANGTS construction, the associated costs will be capitalized for rate base inclusion. As such, the consumers of Alaskan gas will pay for such "business" information. The revenues from any subsequent sale of this "business" information should be used as a credit to rate base, thereby benefitting the gas consumer, who has been paying for such information. Therefore, when ruling on requests for public disclosure of the sponsors' "business" information, the OFI will consider, on the one hand, the likelihood and magnitude of future gas consumer rate reduction if access is denied and, on the other hand, the purpose to be served if access is granted.

(3) While the OFI's authority to gather information is expansive (see subpart A of this part), public disclosure of certain types of "business" information might increase submitter resistance and thereby increase the OFI's need to use compulsory rather than voluntary process for subsequent information gathering. This eventuality could impair the OFI's ability to expedite ANGTS construction, something which the OFI would try to avoid.

(d) Factors favoring disclosure. (1) Disclosure is the statutory preference under FOIA.

(2) For "business" information related to its overall role of administering the equal opportunity program for ANGTS preconstuction and construction (see 43 CFR part 34 and 10 CFR part 1534), the OFI will accord the maximum public access permitted within relevant legal parameters, as described in this subpart.

§ 1504.205 Procedures to designate information as “sensitive”.

(a) Any person, who has been requested by the OFI to provide information, including computerized data, which that person believes to be "sensitive," must so designate the information on its face and also submit, simultaneously with the information, a petition justifying that "sensitive" designation.

(b) A petition for "sensitive" designation must contain the following:

(1) A thorough statement (including documentary support and sworn affidavits if appropriate) explaining why the information is "sensitive," pursuant to the criteria set forth in §§1504.202 and 1504.203;

(2) When appropriate, the length of time and the circumstances under which the information should remain designated "sensitive"; and

(3) The name and address by which the petitioner can promptly be reached by the OFI (through letter or telegram) concerning the petitioned-for designation.

(c) Upon receipt of the petition, the OFI General Counsel or designee will determine whether the information will be designated as "sensitive.”

(1) The General Counsel or designee will make this determination as soon after receipt of the petition as is practicable, but in the interim the petitioner may not assume that the petition has been approved.

(2) The General Counsel or designee will notify the petitioner of one of the three following determinations:

(i) The information is designated as "sensitive" and thus will be protected from public disclosure under all circumstances, as per §1504.206;

(ii) The information is not designated as "sensitive," in which case the petitioner may, where appropriate, con

sider petitioning the OFI for a "business" designation, as per §1504.207; or

(iii) The petition is inadequate for making a final determination, in which case the petitioner will have five calendar days from receipt of the determination in which to cure the petition.

§ 1504.206 Treatment of “sensitive” information.

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(a) For information designated by the OFI "sensitive," under §1504.205(c)(2)(A), the OFI will take the following internal steps:

(1) The designated information will be officially stamped on its face as "sensitive," with the notations that public disclosure is prohibited; that the OFI General Counsel must first approve disclosure within the Government; and that internal distribution and copying is also prohibited unless approved by the OFI Security Officer. The "sensitive" designation will remain unless the General Counsel determines that changed circumstances make it necessary to remove such a designation, in which case the submitter will be so notified immediately.

(2) The OFI will impose stringent internal control procedures for the designated information, including special locked storage facilities, an assigned custodian, and a system of written logs to assure limitation on distribution and copying.

(b) When a request for public disclosure of the designated information is received, the OFI Freedom of Information Officer will so notify the original submitter of the "sensitive" information.

(c) Any information designated “sensitive," which is released pursuant to either a joint federal/state agreement or any other arrangement, shall not be released to the public by the State or any other entity receiving it.

(d) To the extent that a state agency or any other respective entity does not agree in advance to §1504.206(c), the OFI will not release such information to it.

(e) If the OFI subsequently encounters difficulties in resisting public disclosure of “sensitive” information, the OFI General Counsel or designee will so notify the original submitter, affording an opportunity for the submitter to

take whatever supplemental legal action it deems appropriate to assist the OFI in resisting disclosure.

1504.207 Procedures to designate information as “business”.

(a) Any person, who has been requested by the OFI to provide information, including computerized data, which that person believes to be "business," must so designate the information on its face and also submit, simultaneously with the information, a petition justifying that "business" designation.

(b) A petition for "business" designation must contain the following:

(1) A concise statement explaining why the information is "business," pursuant to the criteria set forth in §1504.204 of this part, including particular analysis of the factors for and against disclosure;

(2) When appropriate, the length of time and the circumstances under which the information should remain designated "business"; and

(3) The name and address of a responsible person, who can speak for the petitioner and who can promptly be reached by the OFI (through letter or telegram) concerning the petitionedfor designation.

(c) Upon receipt of the petition, the OFI General Counsel will briefly review the matter and reject petitions which are patently inadequate. This brief review,

however, does not constitute final action on the petition. Until the petition is formally considered (see $1504.208 of this part) by the OFI, the petitioner may not assume that the petition has been approved.

$1504.208 Treatment of "business" information.

(a) For information petitioned to be designated as "business," for which the petition has not been rejected as patently inadequate under §1504.207(c), the OFI will stamp "business' petition pending," with the notation that public disclosure is not allowed without prior official OFI approval pursuant to this section, whether in the case of FOIA requests or disclosure at the OFI employee's own initiative. Otherwise, the OFI will impose no special procedures for internal control.

(1) Statement of any change in facts since the petition was first filed (including whether the petition has become unnecessary);

(2) Detailed explanation of the market value of the information at issue and why disclosure would reduce or eliminate that value; and

(3) Suggested ways to minimize economic harm from disclosure while still affording public access, such as isolating the specific portions of documents warranting special treatment.

(c) As part of the OFI initial determination on any FOIA request for stamped information (under §§ 1504.309 and 1504.312 of subpart C) or as part of an independent OFI decision to disclose that stamped information to the public, the OFI General Counsel or designee will make one of the following decisions on the pending petition for "business" designation:

(1) The information is not "business" within the meaning of § 1504.204(a), and the petition is therefore denied. If there is no other reason to withhold public disclosure, the OFI Freedom of Information Office will then grant the FOIA request.

(2) The information is "business" within the meaning of § 1504.204(a). The petition is therefore granted and the information is designated as "business." However, when balancing the competing factors as to disclosure under § 1504.204(b) through (d), the public interest favors disclosure. Thus, the OFI Freedom of Information Office will then grant the FOIA request.

(3) The information is "business" within the meaning of § 1504.204(a). The petition is therefore granted, and the information is designated as "business." When balancing the competing