The Interational Olympic Committee’s Revised Host City Contract: Another Failed Attempt at Preventing Corruption

Recent Olympic Games, including the 2014 Sochi Winter Games and the 2016 Rio Summer Games, have been dogged by corruption scandals (see here and here). The Sochi Games were particularly egregious: Russian politician Boris Nemtsov believes that the total scale of the embezzlement accounts for 50-60% of the stated final cost of the Russian Olympics. One example cited was the main 40,000-seat Fisht Olympic Stadium, which was first projected to cost about $49 million. Anticorruption activist Alexy Navalny estimates that the real final cost could well exceed $520 million and may total more than $700 million, many times the fair value. This has led to some very bad publicity for the International Olympic Committee (IOC), which organizes the Games. In response to these and other concerns, this past February the IOC made changes to its Host City Contract, which sets out the requirements that cities must meet in order to host the Olympic Games. For the first time, the IOC included specific anticorruption standards and human rights requirements, which were noticeably absent from all previous versions.

The revised provision in the contract states that [the host city must] “refrain from any act involving fraud or corruption, in a manner consistent with any international agreements, laws and regulations applicable in the Host Country and all internationally-recognized anti-corruption standards applicable in the Host Country, including by establishing and maintaining effective reporting and compliance.” The IOC’s revised language integrated a number of recommendations from organizations such as Transparency International, Amnesty International, and the Sport and Rights Alliance. IOC President Thomas Bach explained that the IOC adopted the changes because “[t]ransparency, good governance and accountability are key elements of Olympic Agenda.”

However, both the substance of the terms and lack of enforcement mechanisms mean this provision does absolutely nothing in fighting corruption. The change is little more than a public relations stunt by the IOC to improve its image following numerous criticisms from recent games. Rather than applauding Bach for placing words in a contract, anticorruption activists should continue to push for meaningful change at the Olympic Games. The revised contract fails to represent genuine progress on fighting Olympic corruption for three reasons:

  • First, the provision does not require independent oversight. The IOC certainly understands the importance of oversight. For example, the World Anti-Doping Agency (WADA) was established in 1999 to monitor performance-enhancing drugs in sports. WADA also coordinates anti-doping activities globally and cooperates with law enforcement to facilitate evidence gathering and information sharing. If the IOC were serious about cleaning up the Games, it could contractually require host cities to pay for independent oversight. While this is a potentially expensive endeavor, monitoring costs would likely be less than the amount of taxpayer dollars siphoned off by corrupt actors in host cities. Without active, independent monitoring of host cities, it will be impossible for the IOC to know when and where corruption is taking place.
  • Second, no enforcement mechanism exists for cities that violate the agreement. Even if the IOC were able to monitor the host city for compliance with the anticorruption provisions of the contract, the IOC has no hammer to bring down if cities fail to deliver on their promises. The IOC cannot levy retroactive fines or even rescind Olympic funds committed to the organization. In the event of non-compliance by the host city, the IOC’s only remedies are to retain funds promised to the host city, or to withdraw the right to host the Games. Given the complexities of changing the location of the Games, the latter option is unlikely to be exercised. An enforcement mechanism, if substantial, would encourage cities to actively monitor and prevent corruption from occurring out of fear for the potential punishment.
  • Third, the vague language in the provision results in uncertainty. The provision requires host cities to refrain from fraud or corruption. Yet a meaningful anticorruption provision—one consistent with best practices for such provisions—would need to include language that requires the host city to ensure that its agents, contractors, suppliers, and consultants do not participate in any corrupt practices. Without this or similar language in the contract, it is unlikely that the host city would be contractually responsible for most of the corruption that typically takes place. Additionally, while the revised Host City Contract has a lengthy appendix that defines contractual terms, “corruption” is not explicitly defined. Without a clear definition for corruption, it is unclear what actions constitute a breach. Finally, the language creates a potential conflict between international standards and national laws. The provision requires the host city to refrain from any act involving fraud or corruption, in a manner consistent with any international agreements, laws, and regulations applicable in the host country and all internationally recognized anti-corruption standards. If national laws conflict with international standards, it is unclear which would prevail.

If the IOC is serious about preventing corruption at the Olympic Games, the committee must directly confront the issue—at the host city selection stage—rather than implementing meaningless language in a contract. The IOC cannot say in good faith that it is trying to curb corruption at the Olympic Games while it continues to choose cities and countries in which corruption is rampant (such as the decision to grant Beijing the 2022 Winter Olympics). By incorporating a few powerless sentences into the host city contract, but continuing to select host cities without regard for corruption risk, the IOC is doing nothing more than seeking some favorable headlines while ducking the real problem.

4 thoughts on “The Interational Olympic Committee’s Revised Host City Contract: Another Failed Attempt at Preventing Corruption

  1. Pingback: The Interational Olympic Committee’s Revised Host City Contract: Another Failed Attempt at Preventing Corruption | Matthews' Blog

  2. Hi Jimmy, great post. The corruption risks tied to hosting the Olympics are fascinating and certainly should be addressed as to avoid future occurrences. I agree that merely adding language to a document will not solve the problem and stronger reforms are needed. In regards to the independent oversight you suggested, I am curious to hear your thoughts on who you see filling this role?

  3. Hey Jimmy, with regards to the second point, do you think a different approach can be taken in terms of punitive measures? How about banning the host country from participating in the next immediate games? Would that be too harsh? That is one area where the IOC has jurisdiction, and it won’t affect the hosting of the current games.

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