Asser International Sports Law Blog

On 18 May 2016, the day the first part of this blog was published, the Commission said in response to the Hungarian MEP Péter Niedermüller’s question, that it had “not specifically monitored the tax relief (…) but would consider doing so. The Commission cannot prejudge the steps that it might take following such monitoring. However, the Commission thanks (Niedermüller) for drawing its attention to the report of Transparency International.”

With the actual implementation in Hungary appearing to deviate from the original objectives and conditions of the aid scheme, as discussed in part 1 of this blog, a possible monitoring exercise by the Commission of the Hungarian tax benefit scheme seems appropriate. The question remains, however, whether the Commission follows up on the intent of monitoring, or whether the intent should be regarded as empty words. This second part of the blog will outline the rules on reviewing and monitoring (existing) aid, both substantively and procedurally. It will determine, inter alia, whether the State aid rules impose an obligation upon the Commission to act and, if so, in what way.

In order to correctly decipher the potential consequences of Hungary’s behavior under EU State aid law, it is necessary to make a distinction between the part of the aid scheme declared compatible in the tax benefit scheme in the Hungarian sport sector decision, i.e. the donations for the sport infrastructures used by the professional sport organizations, and the donations used to cover personnel costs. Due to the fact that these two types of donation destinations were allowed based on two different exception procedures (the general exception found in Article 107(3)c) TFEU for the aid to sport infrastructure, and the General Block Exemption Regulation or the de minimis aid Regulation for the aid to cover personnel costs), the rules on reviewing and monitoring aid differ slightly. This blog will only focus on the review and monitoring rules of the tax benefit scheme in the Hungarian sport sector decision.

Reviewing and monitoring State aid schemes – a Commission obligation?

A decision to approve an aid scheme (also known as a “positive decision” under Article 9(3) of the Procedural Regulation 2015/1589), should not fully release the Commission from any obligations regarding ex post control of that scheme. As can be read from Article 108(1) TFEU, “(t)he Commission shall, in cooperation with Member States, keep under constant review all systems of aid existing in those States. It shall propose to the latter any appropriate measure required by the progressive development or by the functioning of the internal market.”

The Commission’s responsibilities appear straightforward. After declaring the Hungarian tax benefit scheme compatible with EU law, it is obliged to review the implementation and usage of the aid by the Member State and the beneficiary, or beneficiaries. The CJEU settled as far back as 1974 that the Commission’s obligation to review existing aid is binding and that the Member States in question the obligation to cooperate with the Commission.[1] In fact, as Advocate General Lenz stated in his opinion in the Namur-Les Assurances du Crédit case, the Commission’s task to constantly review aid is even more necessary for aid schemes, like the Hungarian tax benefit scheme, as compared to individually authorized aid measures.[2] Pursuant to Article 108(1) TFEU and Article 21 of the Procedural Regulation, where the Commission considers that an existing aid scheme is not, or is no longer, compatible with the internal market instead of immediately launching a formal investigation, the Commission must issue a recommendation to the Member State concerned. The recommendation may propose, in particular:

Substantive amendment of the aid scheme;
Introduction of procedural requirements; or
Abolition of the aid scheme.[3]

It is important to note that in accordance with Article 288 TFEU, fifth sentence, recommendations have no binding force. Therefore, the proposed measure itself is not binding for the Member State. Only where the Member State accepts the proposed measure, shall it be bound by its acceptance to implement the appropriate measure.[4] However, if the Member State refuses to accept and implement the recommendations, the Commission could launch a formal investigation in accordance with Article 108(2).[5] Article 108 (1) TFEU and Article 21 of the Procedural Regulation also require the Member States to cooperate with the Commission for the purpose of reviewing aid schemes. This cooperation is further specified in Article 26 of the Procedural Regulation, which obliges Member States to submit annual reports on existing aid schemes to the Commission.[6] The reports allow the Commission to monitor the compliance with the positive decision by the Member State. As was already discussed in part 1 of this blog, Hungary too is required to submit a yearly monitoring report containing information on the total aid amount allocated, the sport infrastructure projects funded, their beneficiaries, etc.[7] A failure by Hungary to submit an annual report, would allow the Commission to propose an appropriate measure as listed above.[8] Whether Hungary actually submits annual reports to the Commission is currently unclear.

Monitoring the tax benefit scheme in the Hungarian sport sector – not as straightforward as it appears

The Commission has repeatedly expressed its ambition for more and better monitoring of State aid schemes. This ambition follows from its primary objective to increase Commission enforcement focus on cases with the biggest impact on the internal market, as can be read from, inter alia, the State Aid Modernisation (SAM) Communication of 2012. Better targeted State aid control means an “increased responsibility of Member States in designing and implementing aid measures” for cases of a more local nature and with little effect on trade, as well as “enhanced ex post monitoring by the Commission to ensure adequate compliance” with the State aid rules.[9] In 2006, the Commission introduced a regular, ex post, monitoring exercise of existing aid schemes. The monitoring exercise gradually increased from 20 different schemes in 2006, to 75 schemes in 2014, covering all Member States, all main types of aid approved as well as block-exempted schemes.[10] The monitoring exercises conducted in 2014 led to the openings of four formal investigations.[11] The willingness to increase monitoring seems logical when taking into account EU case law, which imposes, in practice, an obligation for the Commission to review previously approved aid schemes. Yet, only a very small amount of existing aid schemes is monitored, nor is it realistically possible to do monitor all the schemes. As can be read in the recently published DG Competition Management Plan 2016, over the last 10 years the Commission declared over 3000 aid schemes or measures compatible with EU law after a the preliminary phase (“decisions not to raise objections”) alone.[12] This amount does not take into account positive decisions or block exempted aid schemes and measures, all of which should, strictly speaking, be monitored. Exact numbers on the amount of existing aid schemes currently running throughout the EU are not available, but one could safely say that the overwhelming majority of existing aid schemes are not monitored. Unless the State aid department of the Commission dramatically increases its resources, both in terms of finances and staff, monitoring all existing State aid schemes will remain utopic.

The “specificity” of State aid to the professional sport sector and why extra monitoring in the sector should be considered

The Hungarian tax benefit scheme is not functioning in accordance with its original objectives: many of the sport infrastructure projects funded with public money do not seem strictly necessary and selected professional football clubs benefitted disproportionately. Under these circumstances, a monitoring exercise conducted by the Commission could be needed. If a monitoring exercise confirms disproportionate spreading of subsidies, a consequent set of appropriate measures taken by Hungary could bring the scheme in line with its original objectives. However, given that the majority of schemes are not monitored, there is a very big chance that the Hungarian tax benefit scheme is not one of the “lucky ones” selected. It is also unclear whether the Commission’s answer to the Parliamentary question of 18 May in any way increases that probability.

The State aid complaint procedure as an alternative

Another way to force the Commission to look into the aid scheme, not yet discussed above, is through a State aid complaint procedure. Although the tax benefit scheme was already approved by the Commission in 2011, this should not rule out the possibility of an interested party submitting a complaint to inform the Commission of any alleged unlawful aid.[13] Pursuant to Article 12(1), the Commission is obliged to examine without undue delay a complaint by an interested party, thereby automatically triggering the preliminary State aid investigation of Article 108(3) TFEU. Although ‘unlawful aid’ refers to new aid put into effect in contravention of Article 108(3) TFEU[14], and not existing aid, such as aid schemes authorized by the Commission[15], ‘new aid’ also refers to existing aid that has been altered by the Member State.[16] In accordance with the Commission’s State Aid Manual of Procedures, for an aid scheme to be altered, the complainant would need to demonstrate that a change has taken place that affects “the evaluation of the compatibility of the aid with the common market”.[17] In addition to this, the complaint would need to include, inter alia, information on the (functioning of) the scheme, the amount of aid granted, and why the scheme is no longer compatible under Article 107(3).[18] A further highly important criterion is for the interested party to demonstrate to the Commission that the complainant is directly affected in its “competitive position” by the aid scheme.[19] This criterion empowers the Commission to separate formal complaints from the complaints that are “not motivated by genuine competition concerns”, thereby reducing considerably its workload of having to launch a (preliminary) investigation based on every single complaint it receives.[20] Complaints submitted by complainants, who the Commission does not consider to be interested parties, will be regarded as “general market information”[21] and do not oblige the Commission to investigate.

The “specificity” of State aid to professional sport – no complaints by other clubs

The “interested party” criterion was only added after the reform of the Procedural Regulation in 2013[22], and has affected the professional sport sector considerably. The two years prior saw great activity by the Commission in the sector, including the opening of four formal investigations into alleged State aid to professional football clubs like Real Madrid and Valencia CF.[23] The investigations into alleged aid granted to Real Madrid and Valencia CF were not launched after the submission of a complaint by an interested party, but after “the attention of the Commission was drawn by press reports and information sent by citizens in 2012-2013”.[24] The end of formal investigations into alleged aid granted to professional sport clubs coincided with the introduction of the “interested party” criterion: since citizens are not considered interested parties, the Commission does not have an obligation anymore to investigate complaints, or any form of information, submitted by them. At this moment, only complaints submitted by interested parties, i.e. a party directly affected in its competitive position, have the potential of triggering fresh State aid investigations in the professional sport sector.[25]

Which persons or undertakings fulfill the “interested party” criterion? The answer to this question requires a case by case analysis and depends on the aid measure or scheme chosen by the public authorities.[26] Nonetheless, where aid is granted to a professional sport club, the clearest example of an interested party would be another professional sport club. Getting professional sport clubs to submit State aid complaints is, however, easier said than done. Contrary to other economic sectors where competitors would complain if they feel that they are directly affected in their competitive position, no professional sport club has ever submitted a State aid complaint, nor is it likely to happen anytime soon. As is confirmed by Dutch professional football club FC Groningen’s director Hans Nijland in an article published on 18 May by the Dutch magazine De Groene Amterdammer , “if (another football club) manages to sign a deal with its municipality, I will not complain. In fact, I would say congratulations, well done”.[27] The same mentality probably prevails in Hungary, making it very unlikely that a Hungarian professional football club, or any other professional sport club, decides to submit a complaint alleging unlawful aid to, say, Puskás Akadémia FC due to the disproportionate distribution of subsidies under the tax benefit scheme.

Why extra monitoring in the sport sector should be considered

The advantages of EU State aid control include efficient government spending in the economy as well as better accountability and transparency of aid measures.[28] Nonetheless, with the chances of the Commission monitoring existing aid in professional sport, such as the Hungarian tax benefit scheme, being very slim, and given the unlikeliness of a submission of a complaint by a competing professional sport club, how useful are the State aid rules to achieve better accountability and transparency in (professional) sport? Local governments will continue spending large amounts of public money on projects that distort competition and are contrary to the general public interest, without a meaningful risk of being called back. Furthermore, as long as the Commission does not prioritize State aid enforcement to the professional sport sector, similar to how it enforces the State aid rules regarding fiscal aid to multinationals[29], it is also unlikely that it will investigate ex officio.

From the “efficient use of Commission resources” viewpoint, it is, in a way, understandable that the Commission has decided not to prioritize State aid to professional sport. They are, after all, not the most distortive State aid cases. However, this lack of prioritization is not being compensated with the submission of complaints by interested parties, meaning that public authorities have less to fear from State aid control in the professional sport factor, as compared to other market sectors.

To prevent a complete carte blanche for the public authorities, I would argue that the Commission should impose upon itself stricter conditions as regards monitoring State aid measures and scheme to the benefit of professional sport clubs. The current monitoring system, where the chance of being monitored is smaller than not being monitored, is inefficient in a sector where competitors do not serve as watchdogs. Only by radically increasing the monitoring chance in the professional sport sector can better accountability and transparency of aid measures be achieved.

[1] Case 173/73, Italy v Commission, [1974] ECLI:EU:C:1974:71, para 24.

[2] Opinion of Advocate General Lenz in Case C-44/93, Namur-Les Assurances du Crédit SA v Office Nationale du Ducroire , [1994] ECLI:EU:C:1994:262, para 86.

[3] Procedural Regulation 2015/1589, Article 22. Contrary to the decision options of formal investigations, a decision to order a recovery of the aid from the beneficiary or beneficiaries, as listed in Procedural Regulation, Articles 9(5) and 16, is not an option for the “review procedure”.

[4] Ibid., Article 23(1).

[5] The Enterprise Capital Funds (ECF) decision is a good example of a formal investigation based on ex post review and monitoring. Following a “selected” monitoring exercise in 2011, it was discovered that the UK had failed to take the appropriate measures to bring an aid scheme in line with the Commission Guidelines on Risk Capital , even though it had promised to do so. This led to the Commission opening a formal investigation in November 2011.

[6] Pursuant to Procedural Regulation, Article 26(1), the obligation to submit annual reports applies to decisions “to which no specific reporting obligations have been imposed in a conditional decision”. Under a conditional decision, the Commission attaches to a decision conditions subject to which aid may be considered compatible with the internal market. The tax benefit scheme in the Hungarian sport sector decision has no specific conditions attached to it, apart from the usual obligation for the Member State concerned to submit an annual report to the Commission.

[7] Commission Decision of 9 November 2011, SA.31722 – Hungary - Supporting the Hungarian sport sector via tax benefit scheme , para 57.

[8] Procedural Regulation 2015/1589, Article 26(2).

[9] EU State Aid Modernisation Communication of 8 May 2012 , para 19.

[10] Commission Staff Working Document of 4 June 2015, “ Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on Competition Policy 2014 ”, page 10.

[11] Ibid. One of the investigations involved the Enterprise Capital Funds scheme – Supra n5.

[12] DG Competition document of 18 March 2016 REF. Ares(2016)1370536 “ Management Plan 2016 ”, page 15.

[13] Procedural Regulation 2015/1589, Article 24(2).

[14] Ibid., Article 1(f).

[15] Ibid., Article 1(b)(ii).

[16] Ibid., Article 1(c).

[17] Internal DG Competition working documents on procedures for the application of Articles 107 and 108 TFEU of 10 July 2013, State Aid Manual of Procedures , Section 5, para 1.2.1.

[18] A complaint that does not comply with the compulsory complaint form, or if the complainant does not provide sufficient grounds to show the existence of unlawful aid can be withdrawn by the Commission. See Procedural Regulation 2015/1589, Article 24(2).

[19] Form for the Submission of Complaints Concerning Alleged Unlawful State Aid or Misuse of Aid , point 3.

[20] Draft Report by the European Parliament of 19 March 2013 on the proposal for a Council Regulation amending Regulation (EC) No 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty (COM (2012) 725 final) , page 17.

[21] Supra., No 19.

[22] Council Regulation (EU) No 734/2013 of 22 July 20-13 amending Regulation (EC) No 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty [2013] OJ L204/14.

[23] An explanation on why the public financing of sports infrastructure and professional sports clubs only started to attract State aid scrutiny in recent years can be read in: Ben Van Rompuy and Oskar van Maren, “EU Control of State Aid to Professional Sport: Why Now?” In: “The Legacy of Bosman. Revisiting the relationship between EU law and sport”, T.M.C. Asser Press, 2016.

[24] See, for example Commission decision of 18 December 2013, SA.36387 Spain – Alleged aid in favour of three Valencia football clubs, para 3. The other formal investigations to professional football clubs (i.e. Real Madrid , five Dutch football clubs and four Spanish football clubs ), were also launched after the Commission received information through citizens and/or the press.

[25] Or the Commission decides to open an investigation ex officio pursuant to Procedural Regulation 2015/1589, Article 12(1). However, this is very unlikely, given the lack of priority given by the Commission to sport.

[26] For example, in the case of the Hungarian tax benefit scheme, clubs or associations not active in the sport sector (e.g. theatre clubs, art clubs, etc.), could potentially argue that they have been placed in a disadvantageous position, since they cannot receive donations under the scheme. An aid measure provided in the form of advantageous land transactions, such as the Real Madrid case, could directly affect any undertaking interested in purchasing the same land, or any other plot of land against other market conditions.

[27] Hester den Boer and Bram Logger, “ Een spits van belastinggeld; Onderzoek – Lokale overheden blijven profvoetbal massaal steunen ”, De Groene Amsterdammer, 18 May 2016, page 5.

[28] See for example Oskar van Maren, “EU State Aid Law and Professional Football: A threat or a Blessing?” , European State Aid Law Quarterly, Volume 15 1/2016, pages 31-46.

[29] High profile formal State aid investigations into alleged aid granted by means of selective tax agreements between Member State governments and multinationals like Starbucks, Fiat, Amazon or Apple, have launched in the last few years.

‎Editor's Note: Ryan is Assistant Professor at Thompson Rivers University, he defended his PhD at Erasmus University Rotterdam in December 2015. His dissertation examined human rights violations caused by international sporting events, and how international sporting organisations may be held accountable for these violations.

Introduction

On Sunday, August 21, the 2016 Summer Olympic Games in Rio de Janeiro will end. The spotlight will dim not only on the athletes who return to their home countries to ply their trade in relative obscurity, but also on the country of Brazil.[1] Once the Games have ended, life will go ‘back to normal’, although for many residents of Rio de Janeiro, what is ‘normal’ is anything but.

Watching the opening ceremonies from the favelas – Andrej Isakovic via Getty Images

“A New World” for Favela Residents

While the world has been preoccupied with Zika, the Brazilian corruption crisis, the cesspool that is Guanabara Bay, and the worrying state of some of the sporting venues, the displacement of persons is perhaps the largest problem not only facing the Games, but is the largest one caused (or at least exacerbated) by the Games themselves. Since Rio de Janeiro was selected to be the host of the Olympic Games in 2009, over 77,000 individuals (22,000 families) have been evicted from their homes. Most, if not all, of these individuals were evicted from their homes in the favelas, or slums, communities that began to appear in earnest in the 1970s as Brazil, and Rio de Janeiro in particular, began to urbanize. Currently, favelas are home to 1.4 million people, or about 22% of Rio’s population. It is very likely that not all of these evictions were related to the Games directly. City officials have stated that only Vila Autodromo was directly-affected by the Games, as this particular favela was turned into a parking lot for the Olympic Park and twenty homes for those who refused to leave (Reuters provides a good before/after comparison).

Vila Autodromo (Olympic Park under construction) - Genilson Araújo / Parceiro/O Globo

However, seemingly taking their cue from Rio 2016’s slogan, “Um mundo novo” (“A New World”), city officials have used the Olympic Games as an excuse to ‘re-imagine’ the city on a broader scale. In a 2012 interview, the mayor of Rio stated that “The Olympics pretext is awesome; I need to use it as an excuse for everything…Now all that I need to do, I will do for the Olympics. Some things could be really related to the Games, others have nothing to do with them.” As such, people from favelas that have nothing to do with the Games have been evicted from their homes, with the Games creating the pseudo-state of ‘emergency’ that has, in other cities that have hosted the Games, been used as an excuse to bypass normal procedures and do away with normal protections, in the mold of Naomi Klein’s “shock capitalism”.

The Rio government has claimed to offer financial packages and resettlement options for those who were displaced. These compensation packages were imperfect, as the government offered less than market value for the homes, and those who were relocated may have been relocated anywhere from several to dozens of kilometers away from their former residence, uprooting their businesses or employment, and their social and family lives. However, the relocation policy appears to be the velvet glove concealing the iron fist. For those who resisted relocation, the city cut off their water, and halted garbage pickup and postal service, while violent clashes between residents and police have also been reported. While not directly-related to evictions, but closely related to conditions in the favelas, there has been a reported spike in police killings of street children to “clean the streets” ahead of the Games. While new housing is being built in Rio, much of it is set to be high-end condos, not affordable housing.

International Standards Regarding Housing

The focus of this particular blog post is not the legality of the displacement, per se. That is an issue best addressed by Brazilian lawyers. However, there are international standards that Brazil should live up to. The Universal Declaration of Human Rights recognises a right to own property, and prohibits the arbitrary deprivation of property. Another international instrument of wide application, the International Covenant on Economic, Social, and Cultural Rights (ICESCR), recognises a right to an adequate standard of living. The ICESCR Committee, in its General Comments in 1991 and 1997, has interpreted this standard to include a right against forced evictions. If an eviction does occur, rights to information and participation by those who are affected arise. Finally, when an eviction does take place, a right to compensation and adequate resettlement attaches.

The case of Rio seems to suggest that forced evictions have likely occurred, based on the sheer scale of those who were evicted. Given the timeline of preparing for the Games, provisions on notice and information appear to have been curtailed or cancelled altogether, given that the city went to work on evicting persons immediately after Rio was awarded the right to host the Games in 2009. While some residents, particularly of Vila Autodromo, received compensation and alternative housing, in many cases there appears to be disagreement as to whether compensation has been offered at all with locals saying they have not received compensation, while city authorities deny evicting families without compensation. Actions such as police raids, and cutting off public services also suggest the evictions approach the threshold of ‘forced’ rather than voluntary/negotiated. Regardless of whether the letter of these international standards has been violated, the scope and pace of the evictions is of great concern.

IOC Stance Regarding Displacement

In particular, it should be distressing to readers to see the International Olympic Committee (IOC) seemingly stand by while these evictions occur in the name of the Games. And it is not as if the IOC has no clue that evictions take place due to the Games. For many Games, at least some displacement occurs to make way for infrastructure, while the 2008 Beijing Games saw an estimated 1.25 million people evicted due to Olympic-related projects.

The IOC has responded to the problems of displacement, pledging in 2009 to intervene with the Organising Committee for the Olympic Games (the OCOG – the actual body that is responsible for Games’ preparations) in situations where people who were displaced due to Olympic venue construction were ‘mistreated’. However, the IOC has not said anything publicly in regards to the evictions, and there is no public information regarding any IOC intervention.

Following the IOC’s Agenda 2020, and its recommendations on ‘social sustainability’, the IOC now requires cities bidding to host the Olympics to identify projects that may require displacement of existing communities, and to confirm that the procedures used to displace persons will conform to national and/or international standards. However, promises made by host cities are not always lived up to, as can be seen by Rio’s failed promises to treat 80% of the water flowing into Guanabara Bay, and treating only 21% on the eve of the Games. Rio is apparently also able to get away with such failed promises consequence-free, despite the risk of harm to athletes competing in and around the waters.

The Games Cannot Fix All Ills, But They Should Avoid Creating New Ones…

Ultimately, the largest problem with the Olympic Games is a lack of accountability. The IOC, an organisation based in Switzerland, holds the rights to the Games and selects the host city, but does not actually organise the Games. As such, the IOC often appears to act as though what happens ‘on the ground’ is neither its concern nor its responsibility. Those who actually organise the Games, particularly the OCOG and Host City (the National Olympic Committee of the host country also participates, but is not relevant here), often have limited accountability to those who are harmed by the Games. The OCOG disbands shortly after the Games are over, leaving the Host City holding the bag. The Host City’s accountability is entirely dependent on the political and legal structures of the country, and in countries like Russia (Sochi 2014, World Cup 2018), China (Beijing 2008, Beijing 2022), but even in more established democracies, Host City officials may have limited accountability.

Now is the time that commentators jump up-and-down to shout that hosting the Olympic Games in a single site would fix all of the problems. By placing the Games in Athens (no permanent Winter Games host is ever suggested), there wouldn’t be a need to host the Games in countries with questionable human rights records, or to watch as every single Olympic Games goes over-budget. However, rarely are suggestions made as to who will pay for the infrastructure, which will likely need to be periodically updated (it might be a bit hard for the Greek government to afford it at this point), cope with the criticism that the Games would be cemented as a Euro-centric enterprise, or the other problems that would arise with a permanent host. The Olympic Games are going to continue to be held in countries with imperfect human rights records (which would be pretty much all of them), and in countries with poor human rights records.

All of this is to say that the IOC needs to begin to actually enforce its ideals, and its own mandate of ensuring an Olympic Games that is socially sustainable. The IOC and the Olympic Games should not be the solution to human rights problems in a host country, for they cannot be. However, the IOC does have a minimum moral responsibility to ensure that the Olympic Games themselves are prepared for with the utmost consideration for human rights. And the IOC already has the powers to enforce this mandate through the Host City Contract, whether by withholding money from the Host City, or at the most extreme end, by removing the Games altogether. The IOC has also arguably set a precedent of withholding its support for a country to host future sporting events as a result of the Russian doping scandal, and it could do the same for Olympic host cities that engage in practices that violate human rights in the name of the Games. Of course, this is ultimately up to the IOC itself, barring pressure from states or sponsors.

The Olympic Games were never going to fix Brazil’s or Rio’s problems. Many of Rio’s problems, including Zika, ongoing sanitation issues, corruption, and political and economic instability, have little to no connection to the Games, and were certainly not caused by the Games. In that vein, it is naïve to believe that the Games could be anything more than a temporary papering-over of the deep divisions in Brazilian society (for more on this point, I suggest reading Dave Zirin’s book, Brazil’s Dance with the Devil). What the Olympic Games can do is serve as an example of how to carry out a socially-sustainable project in an emerging market economy. This applies not only to the displacement of persons, but also to the treatment of those who work on construction projects related to the Games (as opposed to the forced labour used in Beijing and Sochi), the environmental sustainability of the Games, and governmental policies and procedures that enhance accountability. While the IOC has made tentative steps to address these issues, as I have addressed before in this space, it is insufficient. The IOC cannot solve all the world’s ills, but it can at least ensure that the Games, carried out under its name, live up to its own standards. The Rio Olympic Games could have served as an example of how to carry out a socially-sustainable project in an emerging market economy.

[1] Although the Paralympics will arrive on 7 September, and while London 2012 did an excellent job of promoting those Games it remains to be seen if Rio will follow suit.

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