Can FIFA Kick its Human Rights Abuses?

Lorena Balic
Vol. 42 Associate Editor

The Fédération Internationale de Football Association (“FIFA”), the world’s governing soccer body, is notorious for corruption[1] and, increasingly, for exacerbating human rights abuses. Murderers ran FIFA’s 1978 World Cup;[2] slave labor now builds its 2022 World Cup.[3]  One hope for reform? Make FIFA a publicly traded company. The organization is registered as a nonprofit under Switzerland’s Civil Code.[4]  Subjecting FIFA to shareholder scrutiny could curtail its complacency for human rights violations. Of course, an IPO for the sports titan is not now realistic. FIFA suffers no capital shortage that would prompt an issuance of shares. Its 2018 Men’s World Cup generated $5 billion U.S. dollars[5] and the federation reportedly fared so well during the pandemic that it considered using its $2.75 billion U.S. dollars in cash reserves to bail out struggling soccer clubs.[6] Under Swiss law, FIFA also enjoys wide latitude to organize itself on its own terms.[7] Relinquishing this benefit would make little business sense. Nevertheless, a publicly traded FIFA is worth considering. Scholars have explored the concept of a “FIFA Inc.” to address its corruption,[8] but they have not considered it in the context of FIFA’s acquiescence to human rights violators. Such a thought experiment is important because it raises larger questions about the duties international and domestic law might impose on domineering sports organizations that persistently entangle themselves in activities dangerous to human welfare. Background Following global pressure to extricate itself from Russia, Qatar, and the FBI’s 47-count indictment against senior FIFA officials for corruption, FIFA sought help. Mr. John Ruggie, the man who drafted the UN Guiding Principles on Business and Human Rights (“UNGPs”), worked with the federation to create its Human Rights Policy.[9] According to the policy, which is grounded in the UNGPs, FIFA commits to “prevent or mitigate adverse human rights impacts that are directly linked to its operations, products or services by its business relationships.”[10]  This direct link most recently refers to the exploitation of migrant workers building FIFA’s stadiums in Qatar.[11] While public commitment is an important step, the organization has a long way to go. For one, the UNGPs are not legally binding.[12] Additionally, even with its new governance reforms, FIFA struggles with corruption. Just two years after the federation implemented anti-corruption mechanisms, its president, Gianni Infantino, violated them by blocking an independent ethics committee judgment to ban Russia’s deputy minister from serving on FIFA’s council.[13] More recently, an audit last year revealed that millions of dollars were misappropriated in the Confederation for African Football (“CAF”), an organization under FIFA.[14] The person FIFA appointed to head CAF was its own secretary general.[15 Enlisting FIFA on the Stock Exchange Could Advance Human Rights FIFA’s status as a nonprofit entity is oxymoronic. It is a billion dollar commercial enterprise organized in pseudo-corporate fashion (e.g. centralized management in its board of directors, independent committees, separation of powers for its president and secretary general).[16] A public listing could have three positive implications for human rights. Contracting with Human Rights Abusers Might Breach Fiduciary Duties The first legal benefit to enlisting FIFA is that shareholders would have a cause of action against director mismanagement. In the broadest sense, corporate fiduciaries—that is, a company’s directors and controllers—have an obligation to transact with the corporation’s best interests in mind. When considering this obligation, many jurisdictions allow shareholders to consider whether directors accounted for human rights. This excerpt from the UN Report on Human Rights and Transnational Corporations outlines approaches of some jurisdictions: In Singapore, case law indicates that the company’s best interests can correspond not only to the interests of the company itself but also to the interests of its shareholders and employees, creditors, or the group to which the company belongs.  In Canada, the Supreme Court has said that directors’ duties are owed to the corporation and not to outside stakeholders, but that in considering the corporation’s interests, directors may look to the interests of shareholders, employees, creditors, consumers, government and “the environment” to inform their decisions.” In the Netherlands, it is generally considered that a director is to act in the interest of the company in the broadest sense, i.e. the combined interests of its shareholders, employees, creditors and even society at large.  In the UK, as detailed further in question 11 below, the Companies Act provides that in promoting the success of the company, directors must have specific regard to “the interests of the company’s employees;” “the need to foster the company’s business relationships with suppliers, customers and others;” and “the impact of the company’s operations on the community and the environment.[17] Courts may reasonably find that directors who knowingly contract with human rights violators, or who turn a blind eye to abuse in exchange for hefty payouts, breach fiduciary duties, especially because such behavior could be illegal or financially costly depending on the jurisdiction, as discussed in the next section. A Public FIFA Would be Subject to Corporate Criminal Liability The second benefit to a public FIFA is that the federation could be criminally sanctioned for fraudulently misrepresenting its involvement with human rights violators. The United Kingdom’s Modern Slavery Act requires businesses doing any type of business in the United Kingdom to disclose how their supply chains are free from labor trafficking.[18] In the United States, securities laws mandate a number of nonfinancial disclosures, which range from addressing climate risk[19] to sourcing minerals from North African countries that finance warlords.[20] Since FIFA operates in almost every country in the world, it would be subject to many of these requirements. The question would be whether such disclosure would be material to FIFA investors (if it is not, then FIFA would not have to disclose). Intermingling with human rights offenders could easily be material. FIFA’s ties to Qatar’s labor trafficking has already had reputational costs, causing concern for a number of sponsors and media partners,[21] who are also the primary source of FIFA’s revenue.[22] In the United States, the year 2020 saw athletes boycotting leagues who failed to implement antiracist resolutions and who pressured playing amidst the pandemic.[23] It is clear that civil unrest and political turmoil delays sports, and delaying sports has financial impact.[24] Securities disclosure is not a perfect deterrent, but it would mandate greater transparency for the notoriously opaque soccer organization, and it would make noise for institutional shareholders, who are increasingly concerned about stewardship and management’s ability to transact for the corporation’s long term benefit. Activist Shareholders Could Restrain Management’s Involvement with Human Rights Violators The last, interconnected benefit to publicly trading FIFA is that the federation would be at the mercy of activist shareholders, who currently hold about 80% of equity market capitalization[25] and are concerned about (1) economic, social, and corporate governance (“ESG”)[26] and (2) a company’s profits long term.[27] While skeptics criticize the nonbinding, face-saving nature of stakeholder governance,[28] it has merit. For example, State Street Global Advisors, an asset manager, recently deployed a successful gender diversity campaign, electing female directors to 120 companies’ all-male boards in one year.[29] At its February 2020 shareholder meeting, Apple, for the first time, had to speak to how it will consider China’s free speech suppression.[30] The World Cup, whose bidding and construction process spans roughly 10 years,[31] is a longer-term interest, and human rights violations in connection with the World Cup cause foreseeable primetime delays. An activist shareholder who is concerned about game interruptions because of a host country’s political unrest, violence, or inability to manage a pandemic outbreak—all past and present problems that the World Cup exacerbated—could quickly oust FIFA’s top executives. Of course, one concern of high rates of management turnover is that it risks eroding FIFA’s mission to promote soccer because management would have the power to, quite literally, change the rules of the game. To safeguard its mission from fluctuating interests, the federation could siphon off the soccer rule-making committee, so that it is free from takeover threats. Addressing the Counter Elephant in the Room: FIFA’s Financial Insulation It is important to acknowledge that, regardless of the enterprise structure it adopts, FIFA is unbelievably insulated. The world is crazy about soccer. Television host John Oliver captured it best when he said that “FIFA is just appalling. And yet. . . I’m still so excited about the World Cup next week.”[32] This is the greatest challenge to holding FIFA accountable: it knows we will not boycott the World Cup, no matter how much it mingles with human rights violators. Nearly half of humanity watched the 2010 World Cup.[33] Yet, in a publicly traded FIFA, massive financial insulation could actually help bring about change. Stock in soccer would be special because people worldwide do care deeply about the beautiful game. Investors, confident that FIFA could guarantee a steady revenue stream, could worry less about maximizing profit and more about socially valuable projects. FIFA could even undertake a more proactive role, rewarding countries who try to remedy their human rights violations. For the sanctity of soccer and, increasingly, for human welfare, FIFA needs someone to fear.


[1] E.g., Press Release 15–1677, U.S. Dep’t of Just. Off. Pub. Affs., Nine FIFA Officials and Five Corporate Executives Indicted for Racketeering Conspiracy and Corruption (June 9, 2015), https://www.justice.gov/opa/pr/nine-fifa-officials-and-five-corporate-executives-indicted-racketeering-conspiracy-and. See generally Stefan Szymanski, Compromise or Compromised? The Bidding Process for the Award of the Olympic Games and the FIFA World Cup in Global Corruption Report: Sport 157 (Gareth Sweeney & Kelly McCarthy eds., 2016) (providing a timeline of FIFA’s corruption with respect to the World Cup). [2] See Will Hersey, Remembering Argentina 1978: The Dirtiest World Cup of All Time, Esquire (June 6, 2008), https://www.esquire.com/uk/culture/a21454856/argentina-1978-world-cup/; Ken Bensinger, When Argentina Used World Cup Soccer to Whitewash Its Dirty War, History: History Stories (Aug. 22, 2018), https://www.history.com/news/world-cup-soccer-argentina-1978-dirty-war. [3] Amnesty Int’l, No Extra Time: How Qatar is Still Failing on Worker’s Rights Ahead of the World Cup 6­­–12 (2014). See also Forget About Rights, The Economist (Aug. 10, 2013), https://www.economist.com/middle-east-and-africa/2013/08/10/forget-about-rights. [4] FIFA, FIFA Statutes 6 (Aug. 2018 ed.), https://resources.fifa.com/image/upload/the-fifa-statutes-2018.pdf?cloudid=whhncbdzio03cuhmwfxa. [5] See, e.g., Rachel Bachman, What is the Women’s World Cup Worth? Not Even FIFA Knows, Wall St. J. (Sept. 24, 2019, 1:17 PM), https://www.wsj.com/articles/what-is-the-womens-world-cup-worth-not-even-fifa-knows-11569335578. [6] See, e.g., Gabriele Marcotti, Can FIFA Save Soccer During Coronavirus Crisis with an Economic Bailout?, ESPN (Apr. 8, 2020), https://www.espn.com/soccer/blog-fifa/story/4083304/can-fifa-save-soccer-during-coronavirus-crisis-with-an-economic-bailout. [7] See Schweizerisches Zivilgesetzbuch [ZGB], Code Civil [CC] Dec. 10, 1907, SR 210, RS 210, art. 60 (Switz.). [8] John Horne, The Planning and Hosting of Sports Mega-Events in Global Corruption Report: Sport 163, 167 (Gareth Sweeney & Kelly McCarthy eds., 2016); Reforming FIFA: SEC as a Parrot, The Economist (Feb. 20, 2016), https://www.economist.com/leaders/2016/02/20/sec-as-a-parrot. [9] John G. Ruggie, “For the Game. For the World”: FIFA & Human Rights 4 (2016), https://www.hks.harvard.edu/sites/default/files/Ruggie_humanrightsFIFA_reportApril2016.pdf. [10] FIFA, FIFA’S Human Rights Policy 5 (2017 ed.), https://img.fifa.com/image/upload/kr05dqyhwr1uhqy2lh6r.pdf. [11] Amnesty Int’l, supra note 3. [12]Julianne Hughes-Jennet, Peter Hood, Allison Berthet, Christy Rush & HL Business and Human Rights Team, A Binding Treaty on Business and Human Rights? Still a Way to Go, Hogan Lovells: Focus on Regulation (Nov. 2, 2017), https://www.hlregulation.com/2017/11/02/a-binding-treaty-on-business-and-human-rights-still-a-way-to-go/#:~:text=By%20way%20of%20background%2C%20the,for%20either%20States%20or%20companies. But see Christelle Coslin & Margaux Renard, Ongoing Discussions at UN Level on a Draft International Treaty Binding Businesses on Human Rights Related Due Diligence and Obligations, Hogan Lovells: Focus on Regulation (Oct. 14, 2020), https://www.hlregulation.com/2020/10/14/ongoing-discussions-at-un-level-on-a-draft-international-treaty-binding-businesses-on-human-rights-related-due-diligence-and-obligations-major-changes-introduced-by-the-second-revised-draft/ (discussing UN’s push to create a Legally Binding Instrument). [13] David Conn, Fifa’s Infantino Accused of Interfering with Governance Decisions, The Guardian (Nov. 26, 2017 10:44 PM), https://www.theguardian.com/football/2017/sep/13/fifa-gianni-infantino-governance-committee-vitaly-mutko.

[14] See Tariq Panja, Audit Finds Suspicious Financial Dealings in African Soccer, N.Y. Times (Feb. 8 2020), https://www.nytimes.com/2020/02/08/sports/african-soccer-corruption.html; Reuters Staff, CAF Plunged into Further Crisis as General Secretary Resigns, Reuters (March 2, 2020, 3:02 PM), https://uk.reuters.com/article/uk-soccer-africa-idUKKBN20P2ZR.

[15] Jens Sejer Anderson, Comment, FBI vs. FIFA: How Deep an Impact?, PlayTheGame (May 28, 2020), https://www.playthegame.org/news/comments/2020/1003_fbi-vs-fifa-how-deep-an-impact/. [16] FIFA, FIFA Legal Handbook 30 (2020 ed.), https://resources.fifa.com/image/upload/fifa-legal-handbook.pdf?cloudid=hrj9obwjarigak8a58z4. [17] John Ruggie (Special Representative of the Secretary-General), Rep. on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises, ¶ 57, U.N Doc. A/HRC/17/21/Add.2 (May 23, 2011). [18] Modern Slavery Act 2015 c. 30 (UK), https://www.legislation.gov.uk/ukpga/2015/30/contents/enacted. [19]  Climate risk is not an expressly-mandated disclosure, but it generally falls under risks that could be material to investors under 17 C.F.R. §§ 210, 229 (2012). [20] 15 U.S.C. § 78m(p) (2012). [21] Bill Wilson, FIFA Scandal ‘A Disaster’ for Sponsors, BBC News (May 28, 2015), https://www.bbc.com/news/business-32912445. [22] Bachman, supra note 5. [23] Marc Stein, Led by N.BA., Boycotts Disrupt Pro Sports in Wake of Blake Shooting, N.Y. Times (Sept. 4, 2020), https://www.nytimes.com/2020/08/26/sports/basketball/nba-boycott-bucks-magic-blake-shooting.html. [24] Cf. Brakkton Booker, Japan, IOC Jostle Over Who Will Pay Billions to Delay 2020 Olympics Over Coronavirus, NPR (Apr. 21, 2020, 4:02 PM), https://www.npr.org/sections/coronavirus-live-updates/2020/04/21/840287419/japan-ioc-jostle-over-who-will-pay-billions-to-delay-2020-olympics-over-coronavi. [25] Charles McGrath, 80% of Equity Market Cap Held by Institutions, Pensions & Investments (Apr. 25, 2017, 1:00 AM), https://www.pionline.com/article/20170425/INTERACTIVE/170429926/80-of-equity-market-cap-held-by-institutions. [26] William T. Allen, Reinier Kraakman & Vikramaditya S. Khanna, The Duty of Loyalty: Conflict Transactions in Commentaries and cases on the law of business organization 1, 10 (6th ed. 2020) (“ESG-oriented funds represent the fastest growing sector of the asset management business. . . estimates suggest that these funds represent north of $1 Trillion in assets under management with more growth predicted inyears to come”) [27] See, e.g., Ellioth Smith, In the Age of Coronavirus, Activist Shareholders are Going After Company Bosses, CNBB (June 9, 2020, 10:41 AM) (reporting that activist campaigns targetting management increases 17% from the prior quarter and 2019); J.P. Morgan, Why COVID-19 Could Prove to Be a Major Turning Point for ESG Investing, J.P. Morgan (July 1, 2020) (predicting that COVID could catalyze ESG investing by redirecting investor attention onto to long-term benefits, like a company’s ability to deal with climate catastrophes). [28] Lucian A. Bebchuk & Roberto Tallarita, The Illusory Promise of Stakeholder Governance, 106 Cornell L. Rev. (forthcoming Dec. 2020) (arguing that stakeholderism would adversely affect stakeholders by insulating corporate executives). [29] State Street Global Advisors, Stewardship 2017 4 (2017). [30] See Patrick McGee, Apple Shareholders Call for Human Rights Transparency, Fin. Times (Feb. 26, 2020). But see Patrick McGee, Apple Commits to Freedom of Speech after Criticism of China Censorship, Fin. Times (Sept. 3, 2020), https://www.ft.com/content/a88f5d3d-0102-4616-8b3f-cb0661ba305d (suggesting that Apple’s policy may be as hollow as FIFA’s). [31] See FIFA, Guide to the Bidding Process for the 2026 World Cup 6 (n.d.), https://img.fifa.com/image/upload/hgopypqftviladnm7q90.pdf. [32]  Last Week Tonight with John Oliver, FIFA and the World Cup, YouTube (June 9, 2014), https://www.youtube.com/watch?v=DlJEt2KU33I&list=FLDy6J6J2Sx81yYEPGgOioTw&index=1910. [33] Ruggie,  supra note 8, at 6. The views expressed in this post represent the views of the post’s author only.