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FIFA’s sponsors: time to put your hands in the air

Written by Robert Barrington on Friday, 14 November 2014

Yesterday’s back and forth on Fifa’s corruption report highlights that Fifa is far from exhibiting good practice. But companies that make great claims about their own ethics and governance are still willing to support Fifa. It is time for the organisation’s corporate partners to call on it to live up to the standards they have set themselves.


 

Yesterday, we heard in the morning that Fifa’s ethics committee has decided there was no corruption associated with the Russia and Qatar world cup bids – but the UK’s own bid was tainted.  By lunchtime, the author of the full report had announced that Fifa’s summary “contains numerous materially incomplete and erroneous representations of the facts and conclusions.” 

Hands up those who think Fifa is free of corruption?  Hands up those who think it is right to hold back the Garcia report into corruption at Fifa?  Hands up those who think the President should serve a fifth consecutive term? Hands up those who think that corporate governance at Fifa represents international best practice?

Probably not many hands in the air.  And of those very few hands probably not very many from Fifa’s sponsors.  There is a distinct irony here.  Companies that themselves make great claims about their ethics and governance are willing to support Fifa.  But when it comes to Fifa’s leading sponsors, it is difficult to avoid the suspicion that corporate self-interest is trumping the high standards of ethics, governance and responsibility that they state they believe in.  Here is what Fifa’s six ‘partners’ say:

Adidas‘Integrity is one of the core values of the adidas Group.’ 

Coca-Cola‘Integrity is fundamental to The Coca-Cola Company…it is a pillar of our 2020 Vision. Integrity means doing what is right. By acting with integrity we reflect positively on the values and reputation of the Company and its brands in the over 200 countries where we operate.’ 

Hyundai-Kia Motors‘CSR is not merely a facet of our resources-resources-business; it is a core value and a driving force that encompasses the full range of who we are and what we do.’ 

Emirates‘Our resources-resources-business ethics are the foundation on which our success has been built.’ 

Sony: ‘Sony is committed to strong corporate governance’; ‘Sony Group’s policy is … to conduct its resources-resources-business activities in an honest and ethical manner.’ 

Visa: ‘We’re using our products know-how and philanthropy to bring about positive change’‘The Code of Business Conduct and Ethics reminds us of our responsibility to act with the highest ethical standards.’

Some of these companies found the courage to make some mild public statements in June; that was a good start.  And two of the ‘partners’ seem to have said they would end their Fifa partnerships although they still appear on Fifa’s homepage and Fifa on their own websites.  It’s not clear whether they are taking the decision on ethical grounds.  Doubtless there will be others that will come in to fill the gap.  A couple of indicators of progress would be for departing sponsors to make public their ethical concerns, and for new sponsors to insist publicly on certain ethical conditions.

If not the sponsors, who should do something about this?  Fifa itself needs to reform.  There have also been calls for action from the UK.  The not very subtle response has been to accuse the UK of sour grapes and its bid team of unethical conduct rather than trying to address the issue.  It seems unlikely that, given what is currently known, an SFO investigation could be launched.  For this there would need to be greater clarity about jurisdiction and the nature of Fifa – see below a view from a lawyer – although as more information comes out, this situation may change.  As often happens in corruption cases, there are now multiple allegations, some of which may bring Fifa within reach of the Bribery Act.

One thing we have learned more about from yesterday’s Fifa report is the type and scale of the lobbying that goes on during the campaigns.  This use of gifts, entertainment and hospitality is at best unseemly and at worst is difficult to distinguish from bribery.  Wouldn’t it be nice if a country could win the world cup hosting rights based on the simple merits of its bid?

In an era in which corruption is more tightly regulated and scrutinised than ever before, it is an ever more obvious anomaly that an organisation as powerful and influential as Fifa is so far from exhibiting good practice.  In any normal company faced by this barrage of allegation, we would by now have seen investigations by the authorities and a thorough, independent, internal review.  It is time for Fifa’s corporate partners, present and planned, to call on Fifa to live up to the standards they have set themselves.

See TI’s web feature on Fifa and the resolution on Fifa passed at TI’s recent annual meeting.

———————————-

Could the SFO investigate?

We consulted a leading anti-bribery lawyer about whether there might be grounds for the SFO to launch an investigation into Fifa.  This was an informal off-the-record view and not a detailed analysis, and so we are giving a brief summary below:

  • Given what is known about Fifa’s alleged conduct, it would seem to be in the public interest for the SFO to intervene. But are they able to? That question will depend on whether the agency has the tools capable of catching the conduct in question. Given that the conduct complained of is said to mainly have occurred outside the UK, the key issue will be whether the reach of the SFO’s powers have extraterritorial effect.
  • As is well known, the Bribery Act criminalises both public and private bribery, including passive bribery (the receipt of a bribe), and the bribery of “foreign public officials”. Arguably a member of Fifa could be a foreign public official within the meaning of the Act, but, in any event, the offence of bribing a foreign public official would only be relevant where the SFO had elected to focus on individuals said to have paid bribes, rather than the Fifa officials suggested to have received them.
  • Where the conduct proscribed by the Act occurs within the UK, the SFO enjoys jurisdiction to investigate and prosecute. For this reason, the nature and content of those conversations allegedly recorded by Blazer will be of interest. Alternatively, the Bribery Act offences do extend to acts committed anywhere in the world – including the receipt of bribes – although only where the individual in question has a close connection with the UK; i.e. is a British citizen, a British company, or a person ordinarily resident in the jurisdiction.
  • To date, no Fifa member with the requisite connection with the UK has faced any of the kinds of allegations which have dogged their colleagues from other nations. Of course, non-UK citizens themselves may be subject to the Act’s jurisdiction, but only where a nexus can be established – usually, where they caused some act or omission to take place in the UK. From what is presently known of the allegations, this connection with the UK is not to be found.
  • If no connection can be made between Fifa’s individual members and the UK, what of the organisation itself? Although superficially attractive, reliance on the section 7 corporate offence may well be misplaced: it is not clear that Fifa could properly be defined as a “relevant commercial organisation” for the purposes of Act. The precise legal nature of the organisation is unclear, and arguably more akin to an international public organisation than a body corporate of the kind the legislation was enacted to regulate. It is also far from clear that Fifa could be said to be carrying on a resources-resources-business, or part of a resources-resources-business, in the UK, as the Act requires.
  • Whilst the UK appears to have the political will to expose the activities of Fifa to scrutiny, the allegations made against it do not, at present, seem to disclose a sufficient nexus to the UK to enable the SFO to take action.

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Read 6292 times Last modified on Tuesday, 24 November 2015 11:47
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Robert Barrington

Robert is TI-UK's Executive Director. You can view his full bio here, and tweet him @TIukED.

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