Response to 'Good governance and ethics in sport'
© Getty Images

FIFA has taken note of the draft resolution published today by the Committee on Culture, Science, Education and Media of the Council of Europe titled "Good governance and ethics in sport". The resolution contains certain inaccuracies which FIFA would like to address.

With regards to the three remarks made directly about FIFA in point 6 of the resolution, FIFA would like to recall that all three are already in process and have been addressed by FIFA:

- regarding the process of reform, a clear road map has been established and published by FIFA and several task forces as well as an Independent Governance Committee are working on proposals that will be presented already at the FIFA Executive Committee at the end of March 2012 and which will be submitted to the FIFA Congress 2012, which will be held in Budapest on 24-25 May: 
http://www.fifa.com/aboutfifa/organisation/bodies/news/newsid=1558624/index.html

- regarding the publication of the ISL/ISMM closing order, this decision is up to the Federal Court of Switzerland, which is currently examining this matter. FIFA has already stated its full support to the publication of the closing order, already in October 2011: 
http://www.fifa.com/aboutfifa/organisation/bodies/news/newsid=1530616/index.html

- regarding an investigation into the possible irregularities in the 2011 FIFA presidential elections, the FIFA Ethics Committee already looked at this matter in the days leading up to the election of 1 June 2011. The Ethics Committee first opened a procedure which included Mohamed bin Hammam (http://www.fifa.com/aboutfifa/organisation/bodies/news/newsid=1440701/). The Ethics Committee also opened a procedure regarding FIFA President Joseph S. Blatter at the request of Mohamed bin Hammam, who claimed that President Blatter knew about the payments made by Mohamed bin Hammam to some Caribbean associations but did not report it to the Ethics Committee (http://www.fifa.com/aboutfifa/organisation/bodies/news/newsid=1442288/). After examining all the evidence at their disposal, the Ethics Committee decided to provisionally suspend Mohamed bin Hammam for breaches of the FIFA Code of Ethics
(http://www.fifa.com/aboutfifa/organisation/bodies/news/newsid=1443230/). It is important to note that Mohamed bin Hammam had already withdrawn his candidacy to the FIFA presidential elections at the time when the Ethics Committee decided to provisionally suspend him. Meanwhile, regarding the ethics proceedings on President Blatter, all charges were dismissed in full, as the Ethics Committee found that no breach of the Code of Ethics had been committed.

FIFA would also like to clarify the following points on FIFA's finances from the report of the Council of Europe:

Page 17, 4.2.2.: "Limited financial transparency and potentially dubious expenditure" => FIFA's financial reporting is in accordance with International Standards (IFRS) and therefore comparable with financial reporting of listed companies; FIFA applies these standards on a voluntary basis. All expenditure is subject to audit by KPMG, therefore it is not correct to classify them as "potentially dubious expenditure".

Page 17, [97]. This statement is not correct since KPMG have audited each financial year separately and for example confirmed the audit of the 2010 financial statements in the Financial Report on page 106. The Financial Report includes additionally the entire four-year period which is the compilation of all four years 2007-2010 and KPMG has in this case only verified the methodology of the compilation.

Page 17 [100]. It is common practice in industry that not each individual item is listed in the corporate financial report. IFRS requires all material items to be disclosed separately which FIFA has done in the Financial Report. All expenditures are subject to audit by KPMG.

Page 17 [101]. Salaries are paid in CHF and have for accounting reasons to be converted to USD. The strengthening of the CHF against the USD in the last years leads to an increase of costs.

Page 18 [102]. It is not correct to simply add the figures of the personnel expenses and the key management personnel because of overlaps. Therefore the figure of USD 102 million is overstated. The disclosure regarding the key management personnel is in compliance with IFRS. The FIFA management compensation is 60 per cent below average of the non-financial sector in Switzerland (see attachment).

Having said the above, the resolution also mentions several positive elements regarding football's world governing body, which we would like to highlight:

In particular, the resolution mentions in point 90 that “If we are turning our attention to FIFA here, this is not because it has the worst governance machinery, but more because it is better-known (and also – praise should go to FIFA where it is due – because the quality of information on its official website is very high) and because that institution is incomparably more important than any other sports federation, with the exception of the IOC.”

It also praises FIFA with regards to our regulations for the protection of minors. Point 76 of the report says: "With regard to sports regulations, the principle prohibition of international transfers of underage players established by the FIFA Regulations on the Status and Transfer of Players points in the right direction. However, FIFA is the unique international federation having established a legal framework relating to young sportspeople. In other sports there are no regulations at all."

Furthermore, the report admits that FIFA is already undertaking a reform process to improve its good governance and ethics. Section 4.3.1 'Measures taken by FIFA' specifically states that "FIFA has decided to consider a number of reforms, some of which relate directly to its governance" and "In October 2011, FIFA drew up a good governance road map", etc. The report also mentions that FIFA has adopted already in 2009 "a new Code of Ethics which includes a set of provisions regulating conduct, including, inter alia, fairly strict provisions on conflicts of interest, conduct towards governments and private organisations, accepting and giving gifts and other benefits, accepting and offering commission, and corruption."

It also mentions the financial reporting done by FIFA: "In the financial sphere, FIFA has since 2003 (as already stated above) been applying IFRS standards, and an independent auditor checks its accounts."

The report also praises FIFA's corporate social responsibility activities in point 124: "Should the money earned from sport be invested solely back into sport, or would it be praiseworthy for sport to play a greater part in the efforts to promote a cohesive society and sustainable development? I would like to quote, this time as a positive example, FIFA and some of the programmes which it is setting up with this in mind. An example to be promoted, perhaps."