April 25, 2017

April 24, 2017

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Should the EU Introduce its own Governance Code for Sport?

Governance in sport has been a hot topic in the UK in recent months, with the release of Sport England and UK Sport’s “Code for Sports Governance” on 31 October 2016, followed by the inevitable media scrutiny on some of UK’s sports governance juggernauts, including (in particular) the FA and, most recently, the revelations and allegations in relation to British Cycling.

The UK has sought to lead the way by setting the ‘gold standard’ for sports governance.  The hope was, and remains, that the UK Code will be looked upon internationally as a model for good governance.  Unsurprisingly, given the high-profile scandals in sports governing bodies in recent years, the topic has indeed been in the spotlight on the international stage, including at an EU policy level.

On 2 February 2017, the European Parliament (“EP”) adopted a Resolution “on an integrated approach to Sport Policy: good governance, accessibility and integrity”. The resolution was adopted by 522 to 76, with 37 abstentions, and follows an evaluation of the EU’s existing sports policy drafted by Finnish MEP, Hannu Takkula.

The 79-point document comprises a range of observations and recommendations of the EP in relation to sport, including sport’s value to EU from both a financial and social perspective (sport represents around 3.51% of total EU employment), the importance of labour rights of athlete, the “specific nature” of sport, the challenges of match fixing and doping, the need to promote social inclusion and diversity at all levels of sport, and the need to support athletes transitioning out of professional sport (all issues previously covered by Sports Shorts).

Of particular interest from a governance perspective is paragraphs 9 to 11, in which the EP:

“9.  Calls on the Commission to develop a pledge board, and to explore the possibility of creating a code of conduct in the areas of good governance and integrity in sport; is of the opinion that sports organisations should lay down transparency rules, ethical standards, a code of conduct for their supervisory bodies, executive committees and members, as well as operational policies and practices to guarantee independence and compliance with the established rules; believes, furthermore, that exploring new instruments for cooperation between governments, sports organisations and the EU can help address some of the current challenges facing the sports industry;

10. Urges the Member States to make public funding for sports conditional, subject to compliance with established and publicly available minimum governance, monitoring and reporting standards;

11. Believes that improving good governance and integrity in sports requires a change in the mind-set of all relevant stakeholders; supports the initiatives taken by sports organisations and other relevant stakeholders to improve governance standards in sports and to enhance dialogue and cooperation with local and national authorities…”

In many respects, the resolution mirrors the concepts and principles of the UK Code, setting out a recommendation, at national level, for Member States to introduce similar governance conditions on public funding and, at Union level, calling upon the Commission to consider the possibility of implementing a code of conduct relating to governance and integrity.  As the directly elected institution the EP, along with the Council, exercises the legislative function of the EU.  However, whilst its vote is required in order to bring EU legislation into effect, the EP does not have legislative initiative. Put simply, it cannot, of its own initiative, propose new bills.  The EP can, however, adopt non-binding resolutions (such as the 2 February resolution on sport) setting out its views on certain matters, which will often call on the Commission (or even national governments) to take a particular course of action. Whilst such resolutions do not carry legal weight, they frequently carry significant political weight.  It will therefore fall to the Commission to consider, and begin any process of implementing, the EP’s proposals.

But what would this mean, how would it work within the EU, and is it desirable?

The resolution has already been the subject of criticism from a number of sports lawyers who consider that it amounts to “little more than a collection of bland observations… [with] no real teeth to these guidelines and signals” of vague observations and does not go far enough in defining how the EU envisages interacting with sports institutions such as the IOC.

Yet, the EU and sport have not traditionally enjoyed the most comfortable of relationships. The EU functions on the basis of conferred competence, meaning it may choose to act only where the Member States have specifically authorised such action in the Treaties.  There is a tension in the relationship between the EU and Sport revolving around the extent of the EU’s competence and its ability to interfere with Sport’s regulatory autonomy.  The EU does not have, and has never had, a full competence in relation to Sport and has therefore developed in the context of the EU’s ability to restrain actions which are contrary to the principles in the Treaties, rather than to actively legislate. In broad terms, this means that the EU may only carry out such restraining actions insofar as Sport constitutes an economic activity.  Cases such as the infamous Meca Medina and Bosman (in which the Court of Justice of the EU found respectively that anti-doping rules were subject to EU law and that football’s player transfer system was contrary to EU free movement principles) made waves within the sports industry and generated significant criticism.  However, following the 2009 Lisbon Treaty, which conferred on the EU the first positive competence in relation to sport (not a full legislative competence but enabling the EU actively to develop policy initiatives) there has been increased communication and cooperation between sporting institutions (including UEFA), as reflected in the tone of the 2 February resolution itself.

The issues and recommendations outlined in the 2 February resolution undoubtedly ring true in pinpointing the various fundamental issues facing sport today, particularly in relation to governance. Whilst it arguably falls short of identifying precisely how any Code or governance standards introduced by the EU would operate in practice, it seems undeniable that the implementation of good governance standards on an international basis would be beneficial for sport. Whether, and how, this will work at an EU level will depend upon how the overarching recommendations in the EP’s resolution develop. As the resolution itself states, a successful will require a change in mindset of all stakeholders, an enhancement of dialogue and cooperation amongst the various relevant sporting, national and local authorities.

© Copyright 2017 Squire Patton Boggs (US) LLP

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About this Author

Rosie Duckworth, Squire Patton Boggs Law Firm, Intellectual Property Attorney
Associate

Rosie is an associate in the Intellectual Property & Technology Practice Group, based in London.

She has experience in both contentious and non-contentious commercial and intellectual property matters, advising clients in the sports, advertising, and media and entertainment industries.

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