Professor Thomas Kruessman, of the Johan Skytte Institute of Political Studies at the University of Tartu in Estonia, contributes today’s guest post:

Recently Jimmy McEntee criticized the anticorruption provisions that the International Olympic Committee (IOC) had added into its standard Host Country Contract (HCC), arguing that the revised HCC language fails to represent genuine progress in fighting Olympic corruption. I might quibble with a few of his arguments, but McEntee’s larger point is essentially correct. For example, while I think McEntee erred as a technical legal matter in asserting that the HCC contains no legal enforcement mechanism, he’s right that as a practical matter, the IOC may not be able to credibly threaten to enforce the anticorruption provisions against a host city, or host National Olympic Committee (NOC) that violates them. Although the IOC is entitled to terminate the HCC and to withdraw the Games from the Host City if there is a violation of or failure to perform “any material obligation pursuant to the HCC or under any applicable law,” this threat is not very credible, given the high stakes involved for the IOC, the demanding timeline on which Olympic Games are prepared, and the fact that termination may invite burdensome and uncertain litigation over what counts as a “material obligation.” For similar reasons, the less extreme remedy of retaining or withholding funds from the host city or NOC or Host National Olympic Committee (NOC) is also not very appealing, and therefore not very credible, in light of the IOC’s strong interest in making the Olympic Games a success and the fact that withholding funds which would weaken the local hosts.

But perhaps McEntee’s most important point—and the one I want to explore further here—is his argument that the HCC’s anticorruption languate is excessively vague. He argues that “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 practice” (emphasis in the original). It is here, especially with respect to the failure to deal clearly and adequately with third-party corruption, where the revised HCC lags behind most, and where comparison with another international sporting association’s approach to the same issue—the Union of European Football Associations (UEFA) Tournament Requirements for the EURO 2024 tournament—is most enlightening.

On the face of it, the HCC’s anticorruption language addresses the issue of compliance in a two-fold manner:

• First, the language requires the host city to act “in a manner consistent with any international agreements, laws and regulations applicable in the Host Country.” Note that—perhaps in an effort to avoid expressing any opinion on national laws—the HCC refers only to relevant international agreements—presumably the United Nations Convention against Corruption (UNCAC), as well as regional conventions—but only to the extent that they are applicable in the host country. “Being applicable” means that the host country has at least signed and/or ratified them, without going into details how these conventions have been implemented in practice. UNCAC has been ratified by 181 countries in the world, with some signatures not translated into ratification yet (most notably Japan, which will host the 2020 Olympic Games). (The remaining non-signatories—countries like Chad, Eritrea, North Korea, Somalia, and Surinam–are not very likely candidates for hosting Olympic Games.) UNCAC Article 21 obligates governments to make it a crime to offer, promise, or give, directly or indirectly, undue advantages to any person who works for a private entity. Acting “in a manner consistent with” Article 21 would therefore impose an obligation on the Host City and the Host NOC not to use third parties for bribery purposes. That sounds good. But does this include an obligation to vet third parties and assess the risk of them using corrupt practices—the issue that McEntee rightly emphasizes? No.
• Second, the revised HCC calls on the Host City and the Host NOC to discharge their obligations in a manner consistent with “all internationally-recognised anti-corruption standards applicable in the Host Country, including by establishing and maintaining effective reporting and compliance.” This is the vague language that McEntee has rightly criticized, in particular for its failure to explicitly cover third-party risks. A contractually binding obligation to implement a compliance management system for corruption and fraud risks, based on the existing international standards—which emphasize the importance of covering third-party risks—would be a true breakthrough. But that’s not what the revised HCC does. Indeed, the HCC includes only one explicit mention of third-party risks, in the context of specifying standard clauses to be used in agreements with third parties and stating that such standard clauses are subject to the IOC’s prior written approval. By mentioning only a relatively obscure problem in third-party agreements, the HCC creates the impression that there are no specific issues with regard to third-party risks involved, and no third-party due diligence required from the Host City and the Host NOC.

The deficiencies in the IOC’s approach become all the more apparent when compared to the UEFA Tournament Requirements for the EURO 2024 tournament. The Tournament Requirements document is not a draft contract; rather, it defines the criteria according to which the right to hold the EURO 2024 will be awarded. It expressly invites bidders “to apply for anti-corruption standards, for which the reference framework can be found in documents published by [the United Nations Office of Drugs and Crime (UNODC)],” in particular UNODC’s A Strategy for Safeguarding against Corruption in Major Public Events. The UEFA Tournament Requirements calls for bids to include explicit anticorruption due diligence provisions, using the following compliance indicators:

• An ethics code
• A comprehensive risk assessment with regard to corruption, fraud, and any other criminal acts and unethical behaviour, and
• A compliance management system according to the risk assessment and in line with international standards (including a code of conduct, guideless on gifts and conflicts of interest, and a secure and anonymous reporting system for potential whistleblowers), including:

It is true, of course, that the Tournament Requirements do not address third-party risks either. But given that the entire layout and design shows that UEFA is aware of the state of art in compliance, there can be no doubt that the call for a comprehensive risk assessment also includes an assessment of third-party risks.

So, not only is McEntee absolutely right when he complains of the “vague language” in the IOC’s new HCC anticorruption language, but it’s in fact quite shocking that the IOC thinks it can get away with such a vague and unsatisfactory approach when UEFA, acting on an identical timeline for a sports event of similar magnitude, demonstrates so much more seriousness about the issue of corruption.