Part Two of this series looked at the legal challenges FFP has faced in the five years since the controversial ‘break even’ requirements were incorporated. Those challenges to FFP’s legality have been ineffective in defeating the rules altogether; however, there have been iterative changes during FFP’s lifetime. Those changes are marked by greater procedural sophistication, and a move towards the liberalisation of equity input by owners in certain circumstances. In light of recent statements from UEFA President Aleksander Čeferin, it is possible that the financial regulation of European football will be subject to yet further change.

FFP from 2010 to 2015 

FFP was integrated into UEFA’s licensing requirements in the Club Licensing and Financial Fair Play Regulations Edition 2010.  In the 2010 Edition, implementation of FFP was to be overseen by the UEFA Club Financial Control Panel. Disciplinary action was carried out by the UEFA Control and Disciplinary Body, whose decisions could be appealed to the UEFA Appeals Board.

In the Club Licensing and Financial Fair Play Regulations Edition 2012, the oversight and disciplinary procedure of FFP was amended. The functions of the Club Financial Control Panel, Control and Disciplinary Body, and Appeals Board were replaced with a two-tier Club Financial Control Body (CFCB). The two chambers of the CFCB are the Investigatory Chamber, which actively monitors FFP compliance; and the Adjudicatory Chamber, which levies sanctions for non-compliance.

Under Article 53.1 of the 2012 Edition rules, the CFCB “carries out its duties as specified in the present regulations and the Procedural rules governing the UEFA Club Financial Control Body” (the Procedural Rules). The bespoke Procedural Rules establish a framework for the composition of the CFCB, the decision making processes of both the Investigatory and Adjudicatory Chambers, and the rules applicable to the whole proceedings. Like the Club Licensing and FFP Regulations, the Procedural Rules have gone through iterative changes (2014, and 2015 editions).

The Procedural Rules are a welcome development to FFP, ensuring the independence of the CFCB (Articles 6 and 7); bestowing broad investigatory powers upon the Investigatory Chamber (Article 13); and setting clear parameters for disciplinary action and process, including setting out potential disciplinary measures (Article 29). Overall, the Procedural Rules increase the legal sophistication of the end-to-end FFP process, and in doing so reduce the risk of irrational or arbitrary outcomes.  This protects clubs and UEFA; clubs who are in breach of FFP have clear guidance on the process that will be followed; clubs who adhere to FFP are reassured that those clubs who breach the rules will be put through a sophisticated investigation and (if necessary) disciplinary process (and additionally, pursuant to Article 22, where third party clubs and member associations are affected and have a legitimate interest in joining proceedings before the Adjudicatory Chamber, may do so); and UEFA, in having a clear and detailed rules governing procedure, helps to insulate FFP from legal challenge.

(By way of aside, in light of the changes to the procedure governing FFP sanctions, it is noteworthy that Bursaspor, in CAS 2014/A/3870 Bursaspor Kulübü Derneği v. Union des Associations Européennes de Football, argued that Control and Disciplinary Body and Appeals Board were “not professional on financial subjects”, although the Turkish club was unsuccessful in its appeal, and UEFA’s rebuttal was to highlight that the Club Financial Control Panel was made up of “financial and legal experts” and that the creation of the CFCB was “principally motivated by a desire to streamline the process”.)

Amongst the Procedural Rules, Article 33 stipulates that decisions of the Adjudicatory Chamber are to be published (subject to redaction to protect confidential information or personal data), which has the effect not just of increasing the transparency of UEFA’s decision making, but also of increasing the transparency of the financial affairs of European club football.

Settlement Agreements

One of the more dramatic changes implemented by the Procedural Rules was the implementation of ‘Settlement Agreements’, which are “aimed at ensuring that clubs in breach of the break-even requirement become compliant within a certain timeframe and are designed to be effective, equitable and dissuasive.”

Settlement Agreements have been described as “basically a plea bargain”. Redolent of the settlement procedures in many competition law or white collar crime regimes, Settlement Agreements are consensual agreements entered into between a party who has breached FFP and the CFCB, which avoid the need for a breach to be referred to the Adjudicatory Chamber (Article 15.1).   Settlement Agreements have been viewed by the CAS as effectively giving clubs a ‘second chance’ to comply with FFP (CAS 2016/A/4692 Kardemir Karabükspor v. UEFA), albeit with more stringent conditions applied.

Settlement Agreements may include sanctions and timeframes for compliance (Article 15.2) and are monitored by the CFCB Chief Investigator (Article 15.4). If there is a breach of a settlement agreement, the matter is then referred to the Adjudicators Chamber.

FFP from 2015

The next major changes to FFP were implemented in the Club Licensing and Financial Fair Play Regulations Edition 2015.

Introduction of Voluntary Agreements 

In contrast to the ex post compliance approach of Settlement Agreements, Voluntary Agreements are an ex ante mechanism for clubs to derogate from the normal FFP standards, with the ultimate aim of complying with the break-even requirement. Voluntary Agreements are defined as being “a structured set of obligations which are individually tailored to the situation of the club, break-even targets defined as annual and aggregate break-even results for each reporting period covered by the agreement, and any other obligations as agreed with the UEFA Club Financial Control Body investigatory chamber” (Edition 2015, Annex XII A.5). They can last for up to four reporting periods (Annex XII A.3).

In order to enter into a Voluntary Agreement, a club must adhere to certain procedural requirements. These include submitting a long-term business plan “based on reasonable and conservative assumptions” (Annex XII B.2(a)).

On the face of it, the concept of the Voluntary Agreements–allowing clubs with new owners to incur debts on the promise of future FFP compliance–sounds like a recipe for sort of financial peril FFP was created to avoid.  However, in order to be allowed to enter into a Voluntary Agreement, there must be put in place “an irrevocable commitment(s) by an equity participant(s) and/or related party(ies) to make contributions for an amount at least equal to the aggregate future break-even deficits for all the reporting periods covered by the voluntary agreement” (Annex XII B.2(c)).

Break Even Limit Increase

Another significant change implemented by the Club Licensing and Financial Fair Play Regulations Edition 2015 was a variation to the quantum of the break even limits in certain circumstances. The limits were increased from €5m to €45m for assessment periods 2013/14 and 2014/15, and €30m for assessment periods 2015/16, 2016/17 and 2017/18  “if it is entirely covered by a direct contribution/payment from the club owner(s) or a related party” (Article 61.2).

This balance between short-term losses, guaranteed in the event of financial failure (per the Voluntary Agreement process) or offset by owner input, against long term sustainability are superficially congruent with the objectives identified by UEFA for its licensing regime, which include “to introduce more discipline and rationality in club football finances; to encourage clubs to operate on the basis of their own revenues; to encourage responsible spending for the long-term benefit of football; and to protect the long-term viability and sustainability of European club football” (Article 2 (c)-(f)).  But this takes a somewhat narrow view of the impact of spending in football. A club’s spending affects not just a buying and selling club in a market transaction for a player’s registration, but affects the overall market in football players.

Inflation in the market for player registrations far outstrips inflation across the broader economy (by one estimate, inflation in football transfer fees runs ten times higher than inflation in the “normal” economy – and those figure were calculated before Paris Saint Germain doubled the record transfer fee with the purchase of Neymar in the summer of 2017. Player wage growth runs at over 10% per annum. Voluntary Agreements and increased owner investment may contribute to this vertiginous inflation. This runs in contrast to some of UEFA’s messaging around FFP. For example, it has previously been stated that FFP was intended to “decrease pressure on salaries and transfer fees and limit inflationary effect”.

Of course, it should be borne in mind that there is nothing inherently wrong with inflation where it is sustainable; but when considered in an environment where capital is accruing to the wealthy elite (top 15 European clubs) at a quicker rate than the rest of the market (see UEFA’s Financial Fair Play Regulations and the Rise of Football’s 1% by van Maren for further analysis), there is a risk of bifurcation of the financial capabilities of football clubs, with inflation marginalising the non-elite.  European clubs have seen revenue growth at over 9% per annum on UEFA’s figures, although since 2009, the average English Premier League club has added “five times more revenue than the average Italian Serie A or French Ligue Un club”. Inflation, if not intrinsically problematic, certainly has the potential to cause problems; and UEFA, in administering and approving Voluntary Agreements, and in weakening its stance on owners offsetting losses, should consider the impact on inflation and stability. Voluntary Agreements and financial input by owners are potentially gateways to the elite level; however, this should not be at the expense of those who do not have wealthy owners or pre-existing wealth.

Perhaps more significantly, there is a normative dimension to the introduction of Voluntary Agreements and the relaxation of financial input from benefactors. The message behind FFP was one of “revolutionising European football”, with then President of UEFA Michel Platini saying that UEFA would “never [be] going back on this.” Quite conversely, the changes brought about by the 2015 Edition of FFP were welcomed with a message of FFP being “eased”. This is disappointing because, on UEFA’s own figures, FFP has had a considerable positive impact on the European football financial landscape. On one view, allowing equity input from owners is a pro-competitive encouragement of exogenous investment; on another, it is rowing back from a positive and successful policy initiative at the expense of those not fortunate enough to have a benefactor owner.

The impact of FFP

In defence of its loosening of the restriction on loss-making, UEFA would doubtless point to the positive impact the FFP has had to date,^[1] which, perhaps, creates financial latitude that once did not exist.

As a part of FFP, the clubs under UEFA’s direct jurisdiction report standardised, audited, financial information. UEFA publishes annual benchmarking reports, which draw upon the information clubs submit. Since the introduction of FFP, there has been a general positive trend in European clubs’ finances.

For example, UEFA’s 7th Benchmarking Report, covering the financial year 2014, showed wage growth to have slowed to its “lowest rate in recent history” at 3%. Overdue payables (essentially debts that clubs owe but have not paid on time) had reduced by 91%. The most recent report published by UEFA, its eight Club Licensing Benchmarking Report, covering the financial year 2015, indicates that clubs “have generated underlying operating profits of €1.5bn in the last two years, compared with losses of €700m in the two years before the introduction of [FFP]”; whereas “Combined bottom-line losses have decreased by 81% since the introduction of [FFP]”.

Of course, there are methodological problems in ascribing the improvement in European clubs’ finances exclusively to FFP when in reality there are a combination of factors at play. However, what we can comfortably say is that there is an evident correlation between FFP and the stabilisation of the football financial landscape.

There is also a second-order effect of FFP at play. UEFA, in its position as the game’s regulator, in introducing FFP, has had a hegemonic influence on the governance of the game at national level.  For example, in England, domestic iterations of FFP have been instituted in the Football League, and the Premier League has introduced its own Short Term Cost Control Measures.

Thus, by setting the tone of sustainability expectations, UEFA has influenced the financial stability of clubs outside of its jurisdiction. This is highlighted neatly in the following passage from UEFA’s eight Benchmarking Report:

“The centrepiece of financial fair play, the break-even rule, may not directly address small and medium-sized clubs with costs and incomes below €5m, but financial fair play has other direct and indirect impacts on these clubs. Direct in that UEFA and the Club Financial Control Body pass their eyes over detailed financial data from all clubs competing in UEFA competitions and in particular take careful, regular note of all overdue payables. And indirect in that financial fair play has resulted in a significantly higher level of scrutiny of club finances and the actions of club owners and directors. In addition, some countries, such as Cyprus, have introduced their own versions of financial fair play, tailored to their clubs and the scale of their financial activities.” 

So, whilst UEFA can legitimately point to the more secure position across the financial landscape as a good reason that Voluntary Agreements or wider economic input from owners will do no harm, it should continue to reflect on the message this loosening of FFP may send to the wider football market.

FFP Exemptions

One area of change for which UEFA should be applauded is in its use of certain exemptions from the FFP ‘break even’ calculation. These include areas such as infrastructure and youth football, both essential to the game’s long-term sustainability. By exempting these areas from the break even calculation, clubs’ owners are incentivised to invest (by equity rather than debt) in the game’s future, without an impact on short-term competitiveness.

More recently (from 2015), UEFA has moved to exclude expenditure on women’s football from the break-even calculation (Annex X C(i). Again, UEFA should be praised for taking positive steps to encourage growth across less wealthy areas of the game.

The Future of FFP after Neymar

Over the summer of 2017, public interest in FFP has reignited. The rules are now becoming synonymous with Neymar and his new club, Paris Saint Germain, after the Brazilian player’s reported €222m release clause was activated, doubling the world record fee for a player transfer.   This move, followed by French player Kylian Mbappe joining Paris Saint Germain from Monaco for similarly large fee, has upset some in the game.

These events pose a significant problem for UEFA. It is not yet known whether PSG are in breach of FFP (and, of course, it is conceivable that they have sufficient financial capabilities to fund the purchases without any breach of the rules); however, the transactions have raised questions, including La Liga President Javier Tebas stating that he believed PSG were guilty of “infringing on UEFA regulations, financial fair play and EU laws”, and Arsenal manager Arsène Wenger saying that “it looks like we have created rules that cannot be respected…there are too many legal ways to get around it.” 

The public grievances around FFP precipitated by PSG’s spending do, to an extent, seem to conflate simply spending large sums of money with breaching FFP. The rules do not prohibit spending large sums on transfers or otherwise; rather, they limit how much debt can be incurred by a club, assessed over a three year rolling period, with only limited equity input from an owner. The rules were not designed to prevent a €222m transfer per se (with the fee amortised across the length of the contract period, as is standard practice in the football industry); rather, they were designed to ensure that any such spending was sustainable, and did not put clubs at risk.

However, FFP is a reactive, not a proactive tool. Clubs report spending after the event; they are not required to seek permission from UEFA to make a capital investment. This ex post approach does perhaps reveal a flaw in managing any egregious short-term infractions that should arise, the impact of which will be felt by other clubs before UEFA, through the CFCB, can have its say.

The broader problem associated with PSG’s spending is one of opacity. PSG is owned by Oryx Qatar Sports Investments, which is an investment vehicle for the state of Qatar. There were contemporary (unconfirmed) reports that the deal would be structured to take place off of PSG’s accounting books, with Neymar being paid the value of his release clause directly for agreeing to become an ambassador to the Qatar World Cup, so that he could in turn pay his own release clause.  If true, this would notionally take the release clause fee off of PSG’s books, but would almost certainly qualify as a related party transaction with the meaning of FFP’s Annex X F and thus remain examinable by the CFCB. Similarly, it was reported that PSG’s loan-come-purchase of Kylian Mbappe was “complex”. While complicated transfer arrangements are to be expected in a game that is going through increasing commercial sophistication, there are evidently some suspicions that PSG are attempting to circumvent FFP (or, more colourfully, ‘peeing in the pool’).

However, UEFA anticipated clubs employing ‘creative’ tactics to superficially comply with FFP, and gave the CFCB jurisdiction to consider “at all times…the overall objectives of these regulations, in particular to defeat any attempt to circumvent these objectives” (Article 72.1). (At this stage, one can only speculate as to what, if any, FFP objectives PSG may have breached, but the CFCB will surely consider Article 2.2 (a) and (c) - (f)).

UEFA has publicly stated that it is investigating PSG’s FFP compliance, saying “The investigation will focus on the compliance of the club with the break-even requirement, particularly in light of its recent transfer activity”. Of course, this should not be particularly surprising given the CFCB annually examines the finances of each club that enters into UEFA competitions under the standard FFP procedure, but it will be interesting to observe how CFCB’s investigation progresses, and, if PSG is found to have breached FFP in letter or in spirit, what punishment is meted out to PSG. 

Whether PSG’s aggressive spending was emboldened by UEFA’s weakening of the more restrictive elements of FFP will remain unknown.  Similarly, one can only speculate as to whether the dilution of FFP, through changes such as the implementation of Settlement Agreements and Voluntary Agreements, came about as a result of legal challenges already brought and defended by UEFA; or whether UEFA is insulating itself from further legal challenges; or whether UEFA is simply altering the rules for the good of the game. As detailed in Part One of this series, the legality of FFP will rest on its proportionality. These changes have moved FFP towards a more flexible, and arguably more proportionate, proposition; but, given the public exposure that PSG’s spending has precipitated,UEFA will surely wish to ensure that FFP is not seen as a paper tiger.

The matter is on UEFA’s agenda. Even before the events involving PSG in the summer of 2017, incoming UEFA president, Aleksander Čeferin, spoke about the possibility of a fixed wage cap and closing the gap between the game’s haves and have nots. Such changes would certainly make FFP more congruent with its name. FFP is not about being ‘fair’ in the sense of being egalitarian or introducing a level playing field. It is a gentle brake applied to the rate of growth in the game, aimed predominantly at reducing long-term loss making and insolvency. Perhaps the rules might have been less controversial from the outset, and might not have been a mechanism for the frustration ventilated by sum following PSG’s purchase of Neymar and Mbappe, if instead of being called FFP, the rules were called ‘financial management rules’, and absolved themselves from the pretence of ‘fairness’.

Alternatively, UEFA could revisit FFP, implementing a genuinely egalitarian set of rules – a hard salary cap, a luxury tax, the abolition of the transfer market, or some combination of those things and others. This would, however, undoubtedly engender its own set of legal challenges, as we have seen with FFP. 

Whilst the challenges to various aspects of FFP have been largely ineffective in defeating FFP (see for example CAS 2016/A/4692 Kardemir Karabükspor v. UEFA; CAS 2016/A/4492 Galatasary v. UEFA; CAS 2014/A/3870 Bursaspor Kulübü Derneği v. UEFA; CAS 2014/A/3533 Football Club Metallurg v. UEFA; CAS 2013/A/3067 Málaga CF SAD v. UEFA; CAS 2012/A/2824 Beşiktaş JK v UEFA; CAS 2012/A/2821 Bursaspor Kulübü Dernegi v. UEFA; CAS 2012/A/2702 Györi ETO v. UEFA ), the rules have, against the backdrop of repeated disputes about their legality, iteratively changed, including a move towards greater liberalisation in respect of equity input into clubs by owners. 

And so UEFA finds itself at a crossroads. FFP, bombarded with legal challenges (which it has to date ridden) has gradually developed and liberalised as financial stability in European football has improved. Now, with the transfer market having escalated, the efficacy of the rules has come into question. UEFA must decide on the path it wishes to take; whether to liberate the market altogether,  whether to institute a truly ‘fair’ system, or whether to continue on FFP’s current centrist ground. Aleksander Čeferin, a lawyer by extraction, is certain to face a legal and political struggle in whichever direction he turns.

^[1] For further discussion on the efficacy of FFP, see Neil Dunbar (2015) "The union of European football association’s club licensing and financial fair play regulations - are they working?" ISSN 1836-1129 http://epublications.bond.edu.au/slej/27

Editor’s note: Tomáš Grell is currently an LL.M. student in Public International Law at Leiden University. He contributes to the work of the ASSER International Sports Law Centre as a part-time intern.

In its press release of 28 February 2017, the International Olympic Committee ('IOC') communicated that, as part of the implementation of Olympic Agenda 2020 ('Agenda 2020'), it is making specific changes to the 2024 Host City Contract with regard to human rights, anti-corruption and sustainable development. On this occasion, IOC President Thomas Bach stated that ''this latest step is another reflection of the IOC's commitment to embedding the fundamental values of Olympism in all aspects of the Olympic Games''. Although the Host City of the 2024 Summer Olympic Games is scheduled to be announced only in September this year, it is now clear that, be it either Los Angeles or Paris (as Budapest has recently withdrawn its bid), it will have to abide by an additional set of human rights obligations.

This two-part blog will take a closer look at the execution of the Olympic Games from a human rights perspective. The first part will address the most serious human rights abuses that reportedly took place in connection with some of the previous editions of the Olympic Games. It will also outline the key characteristics of the Host City Contract ('HCC') as one of the main legal instruments relating to the execution of the Olympic Games. The second part will shed light on the human rights provisions that have been recently added to the 2024 HCC and it will seek to examine how, if at all, these newly-added human rights obligations could be reflected in practice. For the sake of clarity, it should be noted that the present blog will not focus on the provisions concerning anti-corruption that have been introduced to the 2024 HCC together with the abovementioned human rights provisions.

Examples of Olympic Games-related human rights abuses 

The large majority of Olympic Games-related human rights abuses fall into one of the following categories: (i) violations of labour-related rights; (ii) forced evictions; and (iii) repressions of civil rights, in particular the right to freedom of expression and the right to peaceful assembly. In addition, the execution of the Olympic Games can entail negative environmental impacts.

Violations of labour-related rights 

International labour standards are primarily laid down in a number of conventions and other instruments adopted by the International Labour Organization ('ILO'). The ILO identifies four cornerstone principles, namely the right to freedom of association and collective bargaining, the elimination of all forms of forced labour, the abolition of child labour and the elimination of discrimination in respect of employment and occupation.[1] These principles are also reflected to a certain extent in the Universal Declaration of Human Rights ('UDHR'),[2] the International Covenant on Civil and Political Rights ('ICCPR'),[3] the International Covenant on Economic, Social and Cultural Rights ('ICESCR')[4] and regional human rights treaties, such as the European Convention on Human Rights ('ECHR').[5] Other fundamental labour-related rights include, for instance, the right to rest, leisure, fair wages or safe and healthy working conditions.[6]

Thousands of workers coming from both inside and outside of the Host Country are recruited in the run-up to the Olympic Games to ensure that Olympic venues are built on time. Regrettably, these workers are often subjected to multiple violations of their labour-related rights. A report published by Human Rights Watch ahead of the 2008 Summer Olympic Games in Beijing revealed, inter alia, that internal migrant workers frequently faced delayed payment of their wages and were denied basic services linked to China's household registration system, known as Hukou.[7] Furthermore, the freedom of association of these workers was restricted as they could not join China's only legal trade union body, the state-sponsored All-China Federation of Trade Unions.[8] The 2014 Winter Olympic Games in Sochi received a significant influx of migrant workers coming to Russia mostly from Central Asia. Several reports demonstrated that, in addition to unpaid wages or excessive working hours, migrant workers in Sochi were also prevented from moving to another employer as their work permits or personal identity documents were often withheld.

Forced evictions 

The United Nations Committee on Economic, Social and Cultural Rights ('CESCR') defines the term 'forced eviction' as ''the permanent or temporary removal against their will of individuals, families and/or communities from the homes and/or land which they occupy, without the provision of, and access to, appropriate forms of legal or other protection''.[9] The CESCR further specifies that forced evictions might be permissible if the individuals concerned are provided with an adequate compensation for any affected property or, in cases where forced evictions result in the individuals concerned being rendered homeless, an adequate alternative housing, resettlement or access to productive land.[10] Moreover, forced evictions should be carried out in conformity with general principles of reasonableness and proportionality.[11]

Some of the previous editions of the Olympic Games have seen whole communities being removed from their homes to make way for stadiums, accommodation facilities and infrastructure. According to research conducted by the Centre on Housing Rights and Evictions, at least 1.25 million people were displaced prior to the Beijing Games.[12] Thousands of families had been relocated from favelas in Rio de Janeiro before the 2016 Summer Olympic Games were opened. Doubts have been raised whether the affected individuals were provided with an adequate compensation and other guarantees as referred to above.[13]

Repressions of civil rights

Rule 50 (2) of the Olympic Charter stipulates that ''no kind of demonstration or political, religious or racial propaganda is permitted in any Olympic sites, venues or other areas''. Based on this provision, the Host Country may adopt laws and take measures restricting the right to freedom of expression[14] and the right to peaceful assembly.[15] The Chinese government was accused of curtailing the right to freedom of expression of domestic and foreign journalists prior to the Beijing Games. In February 2014, four LGBT-advocates from Russia were detained when they were about to protest against discrimination at the Sochi Games.

Rule 50 (2) of the Olympic Charter also prevents athletes from making political statements in any Olympic sites or venues. At the 1968 Summer Olympic Games in Mexico City, the IOC showed no tolerance for the black power salute, a political demonstration conducted by Afro-American athletes Tommie Smith and John Carlos (gold and bronze medallists in the 200-meter sprint) with the view of supporting their compatriots in the struggle against racial segregation. At the Sochi Games, the IOC did not allow Ukrainian athletes to wear black armbands in commemoration of those who died during the conflict in the country. It is arguable that such examples constitute an unlawful interference with the freedom of expression of athletes competing in the Olympic Games.[16]

Negative environmental impacts

Despite not being generally accepted as a human right per se, the right to a safe and healthy environment might be inferred from other human rights, including, for instance, the right to life or the right to food and water.[17] It should also be noted that environmental concerns are closely intertwined with the concept of sustainable development, as exemplified in the Rio Declaration on Environment and Development which provides that ''environmental protection shall constitute an integral part of the development process and cannot be considered in isolation from it''.[18]

The first Olympic Games that were widely criticized for disregarding environmental considerations were the 1992 Winter Olympic Games in Albertville.[19] By contrast, it is widely recognized that the 1994 Winter Olympic Games in Lillehammer were executed in an environmentally-sustainable manner, arguably in response to the Rio Declaration on Environment and Development which was agreed upon only few months after the closing ceremony of the Albertville Games.[20] Insofar as the more recent editions of the Olympic Games are concerned, the Rio Games faced serious difficulties relating to the polluted waters of Guanabara Bay, an Olympic venue for sailing events. In a similar vein, preparations of the upcoming 2018 Winter Olympic Games in Pyeongchang have been marred by allegations of destroying 500-year-old virgin forest to make room for a ski slope.

Introduction to the HCC

The previous section has portrayed some of the most serious human rights abuses associated with the execution of the Olympic Games. These abuses call for an adequate response from the IOC. Before proceeding to analyse whether the human rights provisions recently introduced to the 2024 HCC may constitute an effective remedy, it is essential to take a cursory look at the HCC as one of the main legal instruments linked to the execution of the Olympic Games.

What should be known in the first place

Following the completion of the selection procedure, the HCC is entered into by the IOC on the one hand and the successful Candidate City ('Host City') and the National Olympic Committee of the Host Country ('Host NOC') on the other hand. Within five months after the execution of the HCC, the Host City and the Host NOC shall form the Organising Committee of the Olympic Games ('OCOG'), an entity endowed with legal personality under the laws of the Host Country.[21] The Host City and the Host NOC shall subsequently ensure that, within one month after the OCOG's formation, the OCOG becomes a party to the HCC and adheres to all its terms.[22] Even though the Host Country itself is not a party to the HCC, it plays an important role in fulfilling the obligations contained therein. For instance, the Host Country Authorities are required to take all necessary measures to guarantee the safe and peaceful celebration of the Olympic Games.[23]

As such, the HCC in its current form consists of four separate documents which apply in the following order of precedence: (i) The HCC – Principles; (ii) The HCC – Operational Requirements which provides a detailed description of the main deliverables and other obligations to be performed by the Host City, the Host NOC and the OCOG, including, inter alia, obligations relating to finances, media or the Olympic Torch Relay; (iii) The Games Delivery Plan which outlines the main planning framework, timelines and milestones to be respected by the Host City, the Host NOC and the OCOG; and (iv) The Candidature Commitments which concerns all guarantees and other commitments contained in the Host City's candidature documentation.[24] Since the present blog deals exclusively with the HCC – Principles, all references to the HCC throughout this post should be taken to include the HCC – Principles only.

The HCC is governed by the domestic laws of Switzerland.[25] The parties thereto undertake to submit all their disputes concerning the validity, interpretation or performance of the HCC to the Court of Arbitration for Sport ('CAS'). If, for any reason, the CAS refuses to exercise its jurisdiction in a particular case, the domestic courts in Lausanne shall be competent.[26]

The main purpose of the HCC is to delegate the execution of the Olympic Games from the IOC to other actors, namely the Host City, the Host NOC and the OCOG.[27] As a general rule, these actors shall be jointly and severally liable for all their obligations, guarantees and other commitments under the HCC, whether entered into individually or collectively.[28] The Host City is primarily tasked with delivering the public infrastructure. It may create and grant powers to an Olympic Delivery Authority[29], a public entity that ''combines the functions of a local council, planning authority, transport executive, trading standards office and police service''.[30] The Host NOC is concerned predominantly with sport-related matters, whilst the OCOG is responsible for hiring suppliers and contractors to build Olympic venues, lodging athletes and officials or elaborating reports on a regular basis.[31] This is not to say, however, that the IOC is not involved in the execution of the Olympic Games. Given that the Olympic Games are the exclusive property of the IOC,[32] the IOC provides significant financial and other benefits to its agents, determines the core requirements, exercises supervision and takes measures in case of non-compliance with the HCC.

Core requirements

First and foremost, the Host City, the Host NOC and the OCOG undertake to respect the Olympic Charter and the IOC Code of Ethics. By signing the HCC (or acceding thereto), they also agree to carry out their operations ''in a manner which promotes and enhances the fundamental principles and values of Olympism as well as the development of the Olympic Movement''.[33] Other core requirements laid down in the HCC relate mostly to human rights, anti-corruption, environmental protection and sustainability, security, betting and prevention of manipulation of competitions, intellectual property rights, entry and stay of athletes and Games-related personnel, taxes, media and marketing. The provisions concerning human rights, environmental protection and sustainability will be specifically examined at a later stage.

IOC's supervision of the execution of the Olympic Games

In order to monitor the progress of, and provide guidance to, the OCOG, with respect to the planning, organisation, staging and financing of the Olympic Games, the IOC creates a Coordination Commission with members representing the IOC, the International Federations, the National Olympic Committees, OCOGs from the past, the IOC Athletes' Commission and the International Paralympic Committee, as well as experts designated or approved by the IOC.[34] As part of their mandate, members of the Coordination Commission conduct site inspections and meet with representatives of the OCOG and the Host Country on a regular basis.[35]

Measures in case of non-compliance with the HCC

The most serious measure contemplated by the HCC in the event of non-compliance therewith is its termination by the IOC and subsequent withdrawal of the Olympic Games from the Host City, the Host NOC and the OCOG. Termination of the HCC might be prompted by a failure on the part of the Host City, the Host NOC and/or the OCOG to perform ''any material obligation pursuant to the HCC or under any applicable law''.[36] That being said, the HCC sets out a two-step procedure for its termination and subsequent withdrawal of the Olympic Games. First, the IOC notifies the Host City, the Host NOC and/or the OCOG and calls upon the relevant party to remedy its failure within 60 days of receiving the notification. This time limit is shortened to 30 days if the opening ceremony of the Olympic Games is less than 120 days away.[37] Second, if the relevant party does not respond to its failure in a timely and accurate manner, the HCC shall be terminated and the Olympic Games withdrawn with immediate effect.[38] Apart from termination of the HCC and subsequent withdrawal of the Olympic Games, the IOC may decide, for example, to withhold any grant to be made to the OCOG in accordance with the HCC.[39]

Conclusion

Against the background of the reform proposals embodied in Agenda 2020, the initial failure of the 2024 HCC to incorporate human rights obligations, other than those relating to non-discrimination, was presented as an astonishing omission. Although the IOC has recently surrendered to public pressure and it has finally added human rights obligations to the 2024 HCC, its role does not end here. The second part of this blog will examine whether the insertion of human rights obligations to the 2024 HCC is to be regarded as a turning point in history of the Olympic Games or risks being an empty promise.

[1]    ILO Declaration on Fundamental Principles and Rights at Work; Article 2.

[2]    UDHR; Article 23.

[3]    ICCPR; Articles 8, 22, 26.

[4]    ICESCR; Articles 2, 8.

[5]    ECHR; Articles 4, 11, 14.

[6]    ICESCR; Article 7.

[7]    Human Rights Watch, 'One Year of My Blood: Exploitation of Migrant Construction Workers in Beijing', March 2008, at 22, 39.

[8]    Ibid., at 42.

[9]    CESCR General Comment No. 7; para. 3.

[10]   Ibid., paras. 13, 16.

[11]   Ibid., para. 14.

[12]   Centre on Housing Rights and Evictions, 'Fair Play for Housing Rights: Mega-Events, Olympic Games and Housing Rights', June 2007, at 154.

[13]   R. Gauthier, The International Olympic Committee, Law and Accountability, Routledge, 2017, at 90.

[14]   ICCPR; Article 19 (2), (3).

[15]   Ibid., Article 21.

[16]   F. Faut, 'The Prohibition of Political Statements by Athletes and its Consistency with Article 10 of the European Convention on Human Rights: Speech is Silver, Silence is Gold?', (2014) 14 (3) ISLJ 253.

[17]   A. Boyle, 'Human Rights and Environment: Where Next?', (2012) 23 (3) EJIL 613, at 617.

[18]   Rio Declaration on Environment and Development; Principle 4.

[19]   S. Samuel, W. Stubbs, 'Green Olympics, Green Legacies? An Exploration of the Environmental Legacies of the Olympic Games', (2012) 48 (4) International Review for the Sociology of Sport 485, at 487.

[20]   Ibid.

[21]   2024 Host City Contract – Principles; Article 3.1.

[22]   Ibid., Article 3.3.

[23]   Ibid., Article 17.1.

[24]   Ibid., Article 1.1.

[25]   Ibid., Article 51.1.

[26]   Ibid., Article 51.2.

[27]   Ibid., Article 2.

[28]   Ibid., Article 4.1.

[29]   In practice, an Olympic Delivery Authority might operate under different names.

[30]   M. James, G. Osborn, 'London 2012 and the Impact of the UK's Olympic and Paralympic Legislation: Protecting Commerce or Preserving Culture', (2011) 74 (3) Modern Law Review 410, at 419-420.

[31]   Gauthier (supra note 13) at 65-66.

[32]   Olympic Charter; Rule 7.2.

[33]   2024 Host City Contract – Principles; Article 13.1.

[34]   Ibid., Article 27.1. See also Olympic Charter; Rule 37.

[35]   A. Geeraert, R. Gauthier, 'Out-of-control Olympics: Why the IOC is Unable to Ensure an Environmentally Sustainable Olympic Games', (2017) 19 Journal of Environmental Policy & Planning 10.

[36]   2024 Host City Contract – Principles; Article 38.2. (d).

[37]   Ibid., Article 38.3. (a).

[38]   Ibid., Article 38.3. (b).

[39]   Ibid., Article 36.2. (b).