An analysis of the General Statute of the 2014 FIFA World Cup Brazil

Published 09 October 2012 | Authored by: Nilo Effori

The FIFA World Cup is one of the biggest sporting events on the planet. In 2014, Brazil will host the tournament again 64 years after the Brazilian national team was crowned runner-up in the Maracanã stadium, Brazil. Many benefits arise from mega events, ranging from tourism and employment to improvements in social welfare and infrastructure.

The 2014 World Cup will be the first to establish ecological and social parameters to be met by governments and private companies that participate in its organization. FIFA calls this the "Green Goal" created to mark the concern for the environment and sustainability of mega events.

Economic impact

It is estimated that the FIFA World Cup 2014 will add R$ 183 billion (aprox. £ 52 billion) to the Brazilian Gross Domestic Product (GDP) and will lead to R$ 33 billion (aprox. £ 10 billion) in infrastructure investment, especially in the area of transport and road systems. About 3.7 million tourists, Brazilian and foreign, should generate in the event period R$ 9.4 billion (aprox. £ 4 billion). In all areas, 700.000 permanent and temporary jobs will be created in Brazil.

The total planned investment in infrastructure and urban stages correspond to 0.7% of GDP of the Brazilian States. The investment of R$ 15.4 billion (aprox £ 6 billion) represents 1.9% of GDP of all the host cities together. Although the amount of investments for the works in the city of Sao Paulo is prominent (20.1% of the investments), this represents only 0.9% of GDP of the city.

Clearly, regarding the economic investment alone, there is going to be a huge impact in Brazilian economy. However, these benefits come at a cost. As part of the bidding process the bidding country must give assurances to FIFA to implement what they view as necessary changes to legislation of the country to protect the FIFA World Cup brand.

Legal Aspects regarding FIFA's request of World Cup Standards

According to the legal structure of Brazil, some steps must be strictly obeyed; otherwise the World Cup would never take place in Brazil. The Federative Republic of Brazil is a democratic state of law which has a constitution that emanates all the laws that determine the operation of the country. It is set out in Article 1 of the constitution that one of the country's fundamental principals is that of sovereignty (item "I"), i.e. to apply the guidelines and orders issued by signed treaties. For example a procedure before the Parliament is necessary before a document becomes law.

If there is the need to ratify a treaty whose documental importance is very important, what about an agreement to conduct a sporting event which imposes some conditions which goes in some part, against the domestic legislation of the country?

FIFA made some demands to the Brazilian government which, if strictly enforced, create what can be described as a 'parallel state' during the tournament. As well as requests about the construction of the stadiums, the governing body of football requires changes in federal, state and municipal Statutes. It also wants to control all advertisement related to the World Cup and calls for the characterization of new crimes accompanied by the creation of courts to judge them. For supporters of FIFA, including the Brazilian Football Association (CBF), it is fair to cede to the pleas of those who brought the biggest sporting event on the planet to Brazil. To critics, including the federal government, the impositions jeopardize national sovereignty, as enshrined in Article 1 of the Constitution.

For discussion and for possible requirements to be formalized, a Federal Statute called the General Statute of the World Cup, n. 12.633, was enacted by the Parliament. The remainder of this article is devoted to an analysis of contentious issues arising from this Statute.

Alcoholic drinks inside Stadiums

The Federal Statute n. 10.671 of 2003, the so called "supporters Statute" prohibits the entry and sale of alcoholic drinks inside the stadiums during football matches.

In addition to this federal Statute, States are allowed to edit their specific Statutes. In Sao Paulo, for example, a World Cup host city, there is another Statute, n. 9.470 of 1996, which in Article 51 specifically prohibits alcohol inside the stadiums. This Article also prohibits the entry of fireworks, flags and rods and glass bottles.

The biggest obstacle on the subject concerns one of the principal sponsors of the FIFA World Cup. The Budweiser beer brand contributes about US$ 28 million to FIFA. The recently approved General Law of the World Cup, has no express provision on this issue, leaving it to the States to decide on the matter, like Sao Paulo, which expressly prohibits the sale.

In summary, it is up to FIFA to use its power to persuade State's to change their Statutes to release the sale of alcoholic drinks, particularly Budweiser, inside stadiums.

Value of the tickets

Article 26 of the General Statute of the World Cup establishes four categories of tickets, category one being the cheapest.

Paragraph 1 of this Article states that FIFA must provide at least 300,000 tickets for category 4, i.e., the so-called popular tickets.

In the General Statute it was also foreseen that in the Brazilian national team matches at least 10% of the tickets should be category 4. This General Statute of the World Cup kept the benefit given by other federal Statutes determining half-price (50%) for students and elderly people.

From the beginning FIFA was expressly contrary to this kind of granting, since a federal government study estimated the loss of US$ 100 million related to this discount (half-price).

Subject to negotiations with FIFA,  the Brazilian States may also be offered popular tickets to indigenous and those who join the campaign "For a world without weapons, drugs, violence, with decent work." Clearly the way in which tickets will be sold did not please FIFA.

Liability for damage in Brazil

Article 23 of Statute n. 12.633 establishes that the Government assumes the liability for FIFA, its legal representatives, employees or consultants for any damages arising, or having arisen in connection with, any incident or accident related to the security of the event, except if FIFA has directly contributed to the occurrence of damage.

Thus, the concurrence or exclusive fault of FIFA for damages suffered by the entity or its agents shall give rise, respectively, mitigation or exemption from the duty to indemnify from the Government.

This is what we call in Brazil "theory of full risk", similar to 'strict liability'. The theory of full risk says that the Government would be required to indemnify any and all losses sustained by third parties, even if it is the result of negligence or willful misconduct of the victim. The only situation currently where this theory is applied is when there are environmental damages. Therefore, the Government cannot become a sort of universal insurance when the offending and the injured are mixed in the same person.

Images and sounds rights and access to competitions places

Articles 12, 13, 14 and 15 deal with the capture of image or sound, broadcasting and access to competition places.

FIFA owns all exclusive rights to the images, sounds and other forms of expression of events, including exploring, negotiating, authorizing and prohibiting its transmissions or re-transmissions. Therefore the terms of Art.42 of the Pele Statute will not be applied (Statute n. 9.615 of 1998). Under this Statute, the rights related to the football events belong to the clubs, which gives them the prerogative to negotiate, authorize or prohibit the collection, fixation, transmission, retransmission or reproduction of image by any means or process of the event they participate in sports.

Also the provision of the Pele Statute that transfers, unless there is a collective bargaining agreement, 5% of revenue from the exploitation of audiovisual rights to unions of professional athletes will not be applied.

Awards for athletes

Article 37 establishes an award in the amount of R$ 100,000 (approximately £35,000) for all players who participated in the World Cups of 1962 and 1970.

Visas for Travel

Article 19 of the Statute establishes special Visas for the World Cup. It proposes the creation of special free visas to the tourists and people who will work during the event. This type of Visa would be worth up to 90 days for tourists and until 31 December 2014 for other foreigners.

According to the current system in Brazil, the VISA may be issued electronically and the proposal of the Statute in determining that the Visa will only be obtained at the home country and establish a minimum period of 30 days in advance for sending the application form, the proposal provides setbacks to the current system of issuing Visas, which dispenses such limitations.

Brand

In Article 16 the Statute provides mechanisms for the protection of the brand and symbols of FIFA World Cup, thereby preventing the registration of similar brands. Companies that do not sponsor the World Cup but ambush market through advertising, broadcasting games and ticket sales (among many others) will have to indemnify FIFA and the sponsor through damages suffered.

Commercial restrictions

FIFA may define areas of commercial restriction within 2 kilometers around the stadium without prejudicing the establishments in operation since which have no association with the tournament.

The local authorities, considering the requirements of FIFA or third parties indicated by it, will define the boundaries of the areas of trade restrictions. The General Law of the World Cup makes it clear that these areas of commercial restriction shall be composed of official locations (stadiums, training center, media centers, parking areas etc..), extending the maximum range of two kilometers around, as stated above, which includes main roads and public access areas.

Crimes

The Statute provides specific crimes until 31 December 2014 for the reproduction or forgery of symbols of FIFA and dissemination of unofficial products related to the World Cup. The penalty is imprisonment for three months to one year plus a fine. However, if FIFA does not send a letter of representation before the Brazilian judicial bodies, the investigation of the alleged crimes will not start.

Final Thoughts

The realization of the World Cup 2014 in Brazil has been the subject of great controversy among the Brazilian people. Some are in favour of the project, focusing on significant investments in infrastructure and internal development. Others say the event will bring huge spending, which would be best used in the poor sectors such as health and education.

It is certain however that the country's economy will grow in all areas. The cities that will host the games will be the first to benefit with major infrastructure projects such as the construction of stadiums or refurbishing the existing ones, by constructing new buildings, the upgrading of the public transportation system, improving the system of security and the construction of new hotels and restaurants. All of which inevitably lead to the generation of jobs in various sectors of the economy.

Given Brazil's previous experience with the Pan American Games of 2007, the country has to take care that the World Cup does not lead to scandals involving the Government, with the diversion of public funds and illegal contracts along with other forms of corruption.

In summary, Brazil can only benefit from hosting a mega event like the World Cup. Many tourists will visit the country, many public and private works will be carried out and a lot of work, and by association employment, will be generated. Should this once in a generation unique opportunity be managed effectively, efficiently and with integrity, all sectors of the economy and society at large will greatly benefit.


1 Article 5 - In football stadiums and gymnasiums mentioned in Article 1 shall be prohibited the sale, distribution or use of:

I - alcoholic beverages;

II - fireworks of any kind;

III - rods or brackets flags, and

IV - glasses and glass bottles and beverages packaged in cans.

About the Author

Nilo Effori

Nilo Effori

Nilo is the founding partner of Effori Sports Law (Effori Sociedade de Advogados), a boutique law firm based in São Paulo and London, specialising entirely in all manner of international sports disputes.

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