After Tuesday’s dismissal of Michael Garcia’s complaint against the now infamous Eckert statement synthetizing (misleadingly in his eyes) his Report on the bidding process for the World Cup 2018 and 2022, Garcia finally decided to resign from his position as FIFA Ethics Committee member. On his way out, he noted: “No independent governance committee, investigator, or arbitration panel can change the culture of an organization”. It took Garcia a while to understand this, although others faced similar disappointments before. One needs only to remember the forgotten reform proposals of the Independent Governance Committee led by Prof. Dr. Mark Pieth.

FIFA is the world’s government of football. It decides who should get to organize the World Cup every four years, but it also imposes the rules applying to international transfers of football players and redistributes a massive amount of money to the various layers of the football pyramid. Those are no mundane tasks. But, despite its relentless display of an entrenched culture of bad governance and corruption, the timidity of public authorities in confronting FIFA is striking. In fact, opacity and a dramatic lack of accountability characterize FIFA’s decision-making processes.

FIFA’s Opacity Culture

Transparency is one of the key requirements of “good governance”. Transparency implies that the public sphere can scrutinize the acts of government and criticize them in full knowledge of their contents. To the contrary, FIFA’s daily governmental work is marred in opacity. Disciplinary decisions, as the one handed out on Tuesday, are never released in full. Thus, it disables any critical checks on the way justice is rendered by FIFA’s disciplinary bodies. The two Garcia reports, the first on the ISL Corruption scandal and the second on the World Cup 2018 and 2022 bids were not publically released (Michael Garcia did not complain over the non-publication of his first report). In an ironical twist, FIFA regulations bar FIFA from releasing these reports supposed to restore credibility of FIFA in the eyes of the world. Hence, FIFA publically trumpets investigations into the most controversial and sensitive issues, while knowing that the findings will be buried forever. But beyond the Garcia reports, opacity is a pervasive feature of FIFA’s governance. For example, the two academic studies ordered by FIFA on the legality and desirability of third-party ownership were similarly kept in a drawer, despite the fact that they are to serve as a basis for upcoming legislation on the matter. In this way, FIFA is able to keep the public debate at bay. Maintaining the public uninformed on the substance of legislative or judicial decisions is the surest way to avoid any controversies and to distance the world government of football from its “citizens”. 

FIFA’s Accountability Deficit

Accountability is another keyword for anybody interested in Good Governance standards. In short, it implies that a decision-maker can be held responsible in front of a forum (legal or political) for the decisions she (or most likely he in the case of FIFA) is taking. FIFA has a huge accountability deficit for two reasons: internally no strong accountability mechanisms have been put in place; externally no societal accountability is imposed. Internally FIFA has been at pain to paint the emergence of its “independent” Ethics Committee as a revolution. However, the Garcia Report saga was prompt to display it as a farce. The Ethics Committee’s investigation as such seems to have been fundamentally flawed, suffice here to recall that the Russian Federation got away with a simple “computers destroyed”. If the Ethics Committee is incapable of inquiring seriously into those matters, it should simply be discarded as an instance of whitewashing. Moreover, despite Blatter being a finalist for this year’s edition of the world’s most hated human being, he will most likely be re-elected by FIFA’s member (the leaders of the national associations) at the upcoming congress in May 2015. Indeed, FIFA’s members are accountable to nobody as FIFA shields them from any national legal or political challenges on the pretext of protecting the autonomy of football.

As pointed out by Garcia, FIFA is incapable of reforming itself and until now it has been immune to the pressure of public outrage. All the expertise of the world would be incapable of changing this state of affairs, unless it is matched with hard legal constraints. This pressure has to come from the states, the first among those being the Swiss state. The Swiss public authorities have the duty to use all legal tools available (especially criminal law) to clean up this Swiss association seated in Zurich, they should collaborate with Europol, Interpol and the FBI in doing so (the new anti-corruption laws are a first step in that direction). In the end, the Swiss state is the sole capable of putting an end to FIFA’s corrupt politics. Would this be an inadmissible intrusion in the autonomy of sport? Even the IOC acknowledged, in the background paper to the Agenda 2020 recommendation, “autonomy has to be earned” and must be exercised “responsibly and in accordance with the basic standards of good governance”. There is no way FIFA can be seen as complying to any good governance standards. The time to clean-up FIFA has come.

Mohamed Dahmane is a professional football player of French-Algerian origin, who has played for a variety of European clubs, including French club US Mauberge, Belgian club RAEC Mons and Turkish club Bucaspor. However, he will mostly be remembered as the player whose legal dispute with his former club (Belgian club KRC Genk) revived the debate on football players’ labour rights.  

Journalists wasted no time in comparing it to the Bosman case.[1] Fair enough, Dahmane and Bosman do show some striking similarities: the two cases concerned players employed by mediocre Belgian football clubs claiming their right to be treated as normal workers. Furthermore, in both cases the respective Courts met (to a large extend) the players’ demands. The Bosman case not only changed labour conditions for all footballers, it shook the whole transfer system. In Dahmane, the case is essentially about whether it is justifiable to have a special law that obliges professional football players who unilaterally break their players’ contract to compensate their club for up to 36 months of salary. After all, “normal” workers are only obliged to pay a 12 months of salary compensation in an identical situation. Whether the Dahmane case will have the same weight as Bosman depends on the effects of the judgment on footballers in Belgium, but also on the European football sector in general. Therefore, a close look at the ruling is needed to understand its potential consequences.

Dahmane signed a four-year contract with KRC Genk on 1 July 2007, he then unilaterally terminated the contract in January 2008 following a row with his coach. Due to the contract termination, KRC Genk demanded a compensation amounting to EUR 878.888,88. The demand was based on Articles 4 § 4 and 5 § 2 of the Law for Professional Athletes and the Royal Decree of 13 July 2004. Indeed, according to the Royal Decree, the compensation had to be equal to 36 months of salary. Dahmane disagreed with KRC Genk’s demands and argued that the compensation should be calculated in accordance with Article 40 § 1 of the general Labour Agreements Law. Pursuant to this Article the severance pay can only amount to a maximum of 12 months of salary.

In a judgment of 25 May 2009, the Labour Court (Court of first instance) concurred with the demands of KRC Genk and ordered Dahmane to compensate KRC Genk for EUR 878.888,88.

Dahmane placed an appeal with The Court of Labour arguing that Article 4 § 4 of the Law for Professional Athletes and the Royal Decree breached Articles 10 and 11 of the Belgian Constitution on equal treatment and non-discrimination.[2] KRC Genk, for its part, argued that the difference between labour agreements of professional footballers on the one hand and “normal” labour agreements on the other is based on the ‘specific character of labour agreements of professional footballers and the specific character of sport in general’. Thus, the ‘specificity of sport’ would imply a special status for sport, whereby ‘normal’ law (i.e. the general Labour Agreements Law) cannot be applied unabridged. KRC Genk highlighted that to achieve the objectives inherent to football, which include avoiding competition distortions and the preservation of the stability of participating sport clubs, certain specific measures, such as the Royal Decree of 2004, can be taken in order to safeguard the legal certainty of labour relationships in the sport sector.[3]

The Court of Labour dismissed the arguments raised by KRC Genk, and held that the Royal Decree applies to all professional sports, not only to football, thereby denying validity to RKC Genk’s claims on the specificity of football.[4]

The Court agreed with KRC Genk that sport exhibits certain characteristics that can deviate from other labour relationships between employer and employee. However, the Royal Decree in question did not mention the specificity of sport in its text, nor does it provide any objective justifications as to why separate rules regarding compensation after a unilateral termination of a labour contract is necessary for the sport sector. Furthermore, the pursuit of financial profits, and the importance of preserving a fair competition have to be taken into account. Those economic objectives are not specific to the sport sector. Therefore, the Court saw no valid reason justifying a separate Royal Decree, when sport’s economic dimension can be equally covered by existing legislation. In other words, the same laws should be used to achieve the same objectives.[5]

As regards KRC Genk’s view that some rules preventing richer clubs from buying all the good players from smaller clubs, thereby distorting competition, are justifiable, the Court found that to be incorrect. Even though it is true that football’s transfer system is different from “normal” movement of workers, a distinction needs to be made between buying and selling of players on the one hand, and the unilateral termination of a player’s contract on the other hand. Here again the Court found the breach of the Constitutional Articles on equal treatment and non-discrimination based on the specificity of the football transfer system was not objectively justified in the Royal Decree.

The Court reminded the parties that the transfer system, which only allows two periods a year for clubs to buy and sell players, would limit the possibility for professional footballers to change clubs. Moreover, it highlighted that compensation equal to 12 months of salary comprises two transfer periods, and should therefore not be seen as unreasonable. Lastly, the Court took into account that the average career of a professional sportsman is relatively short (12 years according to KRC Genk and six to eight years according to Dahmane). A compensation amounting to 36 months of salary would, for many professional players, amount to 1/3 of the player’s revenue during his career and should therefore be deemed unjustifiable.[6]

Hence, the Court considered that a Royal Decree imposing a compensation of 36 months of salary on a player breaching his contract is disproportionate. Furthermore, the Court found the Royal Decree unjustifiable under the Constitutional principle of equal treatment and non-discrimination.

Dahmane revives a debate that has occupied academics in the fields of sports law, labour law and other fields of law for many decades. Is sport special and do its specificities oblige the European and national legislators to make laws that answer the specificities of sport? Should professional athletes be treated different from normal workers because sport is “special”? After Bosman, no transfer fees needed to be paid for players whose contract had ended and no limitations on the number of EU nationals were allowed to be imposed by the football clubs. In other words, the European Court of Justice (ECJ) found professional footballers to be very much like normal workers. Similarly, the Dahmane case lead the Belgian Court of Labour to deny any difference between professional athletes and normal workers regarding compensation after a unilateral termination of the labour contract. Even though Dahmane, as appellant, had asked the Court to raise a preliminary question to the ECJ on the compatibility of the law with the free movement of workers[7], the Court decided the case under Belgian law only.[8] It is therefore highly unlikely that Dahmane will have the same transnational effect as Bosman and mass unilateral contract terminations by professional athletes across the EU are not to be expected. 

Dahmane could set a precedent and encourage professional players in Belgium to simply break their contract, move to another club and pay compensation equal to 12 months of salary. This would be the worst-case scenario for Belgian clubs, since a compensation equal to 12 months of salary will nearly always be inferior to a transfer fee. On the other hand, mass unilateral contract terminations by footballers in Belgium would vindicate the need for specific regulation for football clubs.

In many ways the Belgian Court of Labour has “passed the ball” back to the Belgian legislator. Should the Belgian legislator feel that professional athletes, or footballers for that matter, have to be treated differently compared to normal workers then it could always decide to adopt specific laws or Royal Decrees for professional athletes. However, Dahmane will serve as a warning that these separate laws or Royal Decrees will need proper objective justifications as to why professional athletes are to be treated differently.

[1] See for example: Zaak-Dahmane krijgt allure van zaak-Bosman

[2] Arrest A.R. 2009/AH/199 (6 may 2014) Sub II, §1

[3] Ibid, Sub III §6

[4] Ibid, §7

[5] Ibid, §6

[6] Ibid, §7

[7] Ibid, Sub II, §1

[8] Ibid, Sub III §12

Since yesterday FIFA is back in turmoil (see here and here) after the FIFA Council decided to dismiss the heads of the investigatory (Cornel Borbély) and adjudicatory (Hans-Joachim Eckert) chambers of the Independent Ethics Committee, as well as the Head (Miguel Maduro) of the Governance and Review Committee. It is a disturbing twist to a long reform process (on the early years see our blogs here and here) that was only starting to produce some tangible results.

This journey to a new FIFA started in 2015 after the events that eventually pushed Sepp Blatter and Michel Platini out, and Gianni Infantino in. As noted by the FIFA Reform Committee in its final report, it became clear FIFA needed to undertake “significant modification to its institutional structure and operational processes […] to prevent corruption, fraud, self-dealing and to make the organisation more transparent and accountable”.[1] The Reform Committee put forward a series of recommendations, which later culminated in a set of reforms approved during the Extraordinary FIFA Congress held in Zurich the 26 February 2016. Greater transparency and accountability were the leading mantras of the reform, which – broadly speaking – hinged on (i) generating a cultural change at FIFA, (ii) fostering greater participation of member associations and stakeholders in FIFA and, most importantly, (iii) reforming the principles of governance at FIFA. The essence of the reform process was about changing the governance structures and ethos at FIFA. This was to be done mainly by:

• Separating the political and management functions
• Financial Transparency and Transparency of Compensation
• Term Limits and Eligibility Checks
• Promotion of the role of women in football

And, to be fair to FIFA, on paper at least, things changed quite dramatically over last year, here is how.

1.     The new FIFA Council                                                                          

First, the reform changed the political and administrative structure of FIFA. The Executive Committee being replaced by the Council, a new body with a different composition and set of competences. The Council’s larger size is aimed at ensuring broader participation and representativeness. While the Executive Committee comprised 24 members plus the FIFA President, the Council is composed of 36 members plus the FIFA President. The Congress elects the President, whereas the other members of the Council represent the confederations. Each Confederation president is ex officio a vice-president of the Council. UEFA has three vice-presidents at the Council and the other Confederations one each, for a total of eight vice-presidents. The rest of the members are divided as follows: four from CONMEBOL and CONCACAF, six from AFC, UEFA and CAF, and two from OFC. 

One of the main objectives of the governance reform was to reduce the possibility of conflicts of interests. To this end, a firm separation between political decision-making and management was considered crucial. Even though the Council’s role is supposed to be confined within the boundaries of supervising FIFA’s administration and defining strategic directions, it retains strong steering powers through its competence, enshrined in Article 34 FIFA Statutes, to nominate and dismiss the members of FIFA’s Committees as well as FIFA’s Secretary General. Nevertheless, the executive functions are delegated to the Secretary General, who has the duty to carry out the day-to-day business and implement the strategies outlined by the Council. While, the Chief Compliance Officer, oversees this activity and reports to the independent Audit and Compliance Committee.

2.     The introduction of eligibility checks

The FIFA reform committee recognized that a trustworthy governance of FIFA requires that the executives be, as much as possible, free of conflicts of interest. Hence, all the members of the Council are now subject to eligibility checks carried out by the Review Committee, a special commission within the newly created Governance Committee, formed by its chairperson, its deputy chairperson and one independent member. The members of the Governance Committee are in turn subject to eligibility checks carried out by the investigative chamber of the Ethics Committee. According to Art. 27(8) FIFA Statutes: “candidates for the positions of chairperson, deputy chairperson and members of each of the Audit and Compliance Committee and the judicial bodies must pass an eligibility check carried out by the Review Committee”.[2] The Secretary General is required to fulfil an eligibility check as well[3] and so do the candidates for standing committees.[4] This new check is the cornerstone of FIFA’s governance reform. In the absence of truly open and fair democratic elections to determine who exercises power inside FIFA, the eligibility checks are a fundamental brake to control the pool of potential executives and ensure a modicum of ethical virtue amongst them.

3.     The strive for financial transparency

The FIFA Reform Committee Report proposed to make public the compensation packages of FIFA’s executives. Thus, the new Art. 51(10) FIFA Statues imposes a duty to disclose the individual compensation of the FIFA President, the members of the Council and the Secretary General. The compensation of the said members and the Compensation Rules are determined by the Compensation Sub-Committee within the Audit and Compliance Committee.[5] Indeed, in its 2016 Governance Report, published in April 2017, FIFA disclosed the compensation packages of its executives. This was a much-needed development in light of the way Blatter, Platini and co were playing with FIFA’s finances, sometimes/often to their own benefits.

4.     The limited role of the FIFA President

The reformed Statutes reduced the role and discretionary power of the FIFA President, who is now depositary of a more ambassadorial than executive role. Pursuant to Art. 35 FIFA Statutes, the President has no right to vote at the Congress and has one ordinary vote in the Council. The new provision repealed the possibility for the President to have a casting vote whenever votes are split equally inside the FIFA Council.[6] And yet, due to his capacity to set the agenda of the FIFA Council and to steer the Council’s appraisal of the Secretary General, his influence inside the constitutional structure of FIFA should not be underestimated.

5.     The introduction of term limits

The need to answer to transparency and accountability demands also resulted in the provision of term ceilings for the most prominent figures within the Organisation. The President, the members of the Council and the members of the independent committees can serve their office for no more than three terms, whether consecutive or not, of 4 years each.[7]

6.     The representation of women

FIFA recognised that “football governance at all levels needs to include more women in order to create a more diverse decision-making environment and culture”.[8] It has aimed to achieve this goal in two ways. First, FIFA adopted gender equality as an explicit statutory objective.[9] Second, and more visibly, each Confederation has to reserve for women at least one seat at the FIFA Council.[10]

7.     The reform of the standing committees

In order to improve efficiency the number of standing committees was reduced from 26 to 9. The current standing committees, which “advise and assist the Council in their respective fields of function”[11] are: the Governance Committee, the Finance Committee, the Development Committee, the Organising Committee for FIFA Competitions, the Member Associations Committee, the Player’s Status Committee, the Referees Committee, the Medical Committee and the Football Stakeholder Committee. The latter was freshly created to foster greater engagement with the football stakeholders.

Some specific requirements to be fulfilled by the members of the committees are laid out in Art. 39 FIFA Statutes. Paragraph 3 of that provision states that, while the general rule is that members of the committees can be at the same time members of the Council, the members of the Governance Committee, the independent members of the Finance Committee and the independent members of the Development Committee cannot simultaneously belong to the Council.[12]

Furthermore, at least 50% of the members of the Governance Committee, Development Committee and Finance Committee need to fulfil the independence criteria as defined in the FIFA Regulations.[13] These independence criteria need to be fulfilled also by the chairpersons, deputy chairpersons and members of the FIFA judicial bodies, i.e. the Disciplinary Committee, the Ethics Committee (both its investigatory and the adjudicatory chambers) and the Appeal Committee.[14] Furthermore, the members of the Audit and Compliance Committee must not belong to any other FIFA body.[15] The same applies to all the members of the FIFA judicial bodies.[16]

Conclusion: Plus ça change, moins ça change?

To sum up, on paper FIFA did change. It is undeniably a bit more transparent (but we are still waiting for the publication of the Garcia Report or of the decisions of the Ethics Committee) and its executives are a bit more likely to face independent counter-powers (e.g. Ethics Committee or the Governance Committee). FIFA’s reforms rely on a double strategy:

·       independent ex ante control on who is to exercise power inside the organization and;

·       independent ex post review of how this power is exercised.

And yet, with Blatter becoming a phantom of an almost forgotten past, the urge to reform is quickly receding. In fact, reform at FIFA is a bit like the ebb and flow. Its urgency, rises with the tide of public outrage at corruption scandals, and diminishes with public indifference in the face of a new business as usual.

Yesterday, 9 May 2017, we ebbed anew. It seems that the FIFA Council has decided that the time for reforms has past. New sponsors are lining up for the next world cups, the old guard is gone and the time seems ripe to turn the page. However, the institutional changes introduce over the last year made sense only if they are being monitored by strong independent institutions (the Ethics Committee and the Governance Committee), whose members do not feel that they are at the mercy of the power of the FIFA Council. Their role is to be disagreeable and to act as counter-powers, if they are dismissed at will when they do their job then the whole house of cards of FIFA reforms falls apart and we are back to square one. The dismissal and departure of independent and highly qualified academics like Miguel Maduro (with whom I  had the pleasure to work with at the European University Institute during my PhD) and Joseph Weiler are a sign that the Governance Committee and its capacity to control access to FIFA’s most powerful positions is being curtailed. Maybe it’s due, as some seem to think, to the Committee’s decision to bar access to the FIFA Council to Russia’s infamous former sports minister Mutko. In any event, it’s seems that FIFA’s strong (mostly) men are unimpressed by the benefits of “good governance”.

The tide will certainly turn again. Scandals will arise and force through new changes. Nonetheless, one is left to wonder whether the Swiss State and/or the European Union should not forcefully intervene to impose once and for all certain basic “constitutional” requirements  (e.g. independence, transparency, separation of powers) to a global body that exercises a strange form of public-private authority.

[1] 2016 FIFA Reform Committee Report, 2 December 2015, p. 1.

[2] Art. 27(8) FIFA Statutes.

[3] Art. 37 (3) FIFA Statutes.

[4] Art. 39(5) FIFA Statutes.

[5] Art. 51 FIFA Statutes.

[6] Art. 35 FIFA Statutes.

[7] Art. 33 FIFA Statutes.

[8] 2016 FIFA Reform Committee Report, 2 December 2015, p. 9.

[9] Art. 2 f) FIFA Statutes includes “the full participation of women at all levels of football governance” among the objectives of FIFA. The heading of Art. 4 FIFA Statues was amended to explicitly include ‘gender equality’.

[10] Art. 33(5) FIFA Statutes.

[11] Art. 39(2) FIFA Statutes.

[12] Art. 39(3) FIFA Statutes.

[13] Art. 40(1), Art. 41(2) and Art. 42 (1) FIFA Statutes.

[14] Art. 52(4) FIFA Statutes.

[15] Art. 51(1) FIFA Statutes.

[16] Art. 52(5) FIFA Statutes.