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Report No. 275

-Corruption

4.36 The word 'corruption' can be defined in myriad ways, ranging from 'moral depravity' to 'misuse of public power'. In most of the cases, 'corruption' takes meaning from its manner of manifestation and depends on the context of its usage.

4.37 Black's Law Dictionary (8th edition) defines 'corruption' as, "Depravity, perversion, or taint; an impairment of integrity, virtue, or moral principle; esp., the impairment of a public official's duties by bribery."

A second definition of the word provided therein goes as, "The act of doing something with an intent to give some advantage inconsistent with official duty and the rights of others; a fiduciary's or official's use of a station or office to procure some benefit either personally or for someone else, contrary to the rights of others." Another definition provides, "The word 'corruption' indicates impurity or debasement and when found in the criminal law it means depravity or gross impropriety."78

4.38 The present context requires 'corruption' to be viewed as an act or omission, inconsistent with the normal course of duty, done under the influence of external factors such as money, favours, coercion, undue influence etc. Corruption, in a civilised society is a malady, a malignant form of cancer, which, if left unchecked, erodes, inter alia, the moral as well as economic fibre of a nation. Corruption also has dire consequences on 'human rights' due to several direct and indirect effects.

4.39 In the case of, Vineet Narain v. Union of India,79 the Supreme Court, while stressing on the need for enhanced transparency, observed, The adverse impact of lack of probity in public life leading to a high degree of corruption is manifold. It also has adverse effect on foreign investment and funding from the International Monetary Fund and the World Bank who have warned that future aid to underdeveloped countries may be subject to the requisite steps being taken to eradicate corruption, which prevents international aid from reaching those for whom it is meant.

Increasing corruption has led to investigative journalism which is of value to a free society. The need to highlight corruption in public life through the medium of public interest litigation invoking judicial review may be frequent in India but is not unknown in other countries.

4.40 The Apex Court in the aforementioned case added that, "it cannot be doubted that there is a serious human rights aspect involved in a proceeding regarding corruption", as the prevailing corruption in public life, if allowed to continue unimpeded, will ultimately erode Indian polity.

4.41 Likewise, in the case of State of Maharashtra, through CBI, Anti-Corruption Branch, Mumbai v. Balakrishna Dattatrya Kumbhar,80 the Apex Court held that, "Corruption is not only a punishable offence but also undermines human rights, indirectly violating them, and systematic corruption, is a human rights violation in itself, as it leads to systematic economic crimes."

4.42 The negative effect of corruption on human rights was further highlighted by the Supreme Court in the case of, Subramanian Swamy v. Manmohan Singh & Anr.,81 wherein it was observed that, corruption, not only, poses severe danger to the concept of constitutional governance, but also to the Rule of Law, and the very foundation of democracy in India.

The court added that it is undisputable that with the beginning of corruption, all rights are automatically extinguished and that the phenomena of corruption "devalues human rights, chokes development and undermines justice, liberty, equality, fraternity, which are the core values of Preambular vision". In another case, Subramanian Swamy v. Director, Central Bureau of Investigation and Anr.,82 the Apex Court observed, that corruption is "an enemy of the nation".

4.43 The OHCHR has acknowledged the close link between human rights violations and corruption,83 stating that "There is an urgent need to increase synergy between inter-governmental efforts to implement the United Nations Convention against Corruption and international human rights conventions."

4.44 Corruption is a major hurdle in the process of economic development and in modernisation of a country. It undermines development by weakening the institutions on which economic growth depends.84It is also suggested that corruption can be viewed as an additional tax on business transactions.85There is a consensus between majority of the published works that the correlation between corruption and GDP (Gross Domestic Product) is negative.86

The World Bank and International Monetary Fund (IMF) presume that corruption has significant negative effects on economic growth. Corruption undermines development by distorting the Rule of Law and weakening the institutional foundation on which economic growth depends.87 Corruption affects economic development by plummeting private investment and conceivably even by altering the composition of government expenditure, specifically by lowering the share of spending on foundational/infrastructural heads such as education, among others.88

4.45 If the relationship between the level of economic development measured by GDP and perceived corruption levels across countries is examined, it can be generally observed that the relationship is negative, i.e., poor countries tend to be corrupt. On the other hand, upon examination of the relationship between perceived corruption levels and economic growth rate across countries, it is revealed that the growth rates vary more for countries with high-level corruption.89

That is to say, while many highly corrupt countries have low economic growth rates, there are also countries that have demonstrably achieved rapid economic growth under rampant governmental corruption. This suggests that some countries may achieve high economic growth regardless of high instances of corruption.90

4.46 That being said, a report by the State Bank of India (SBI), examining the co-relation between the corruption levels and GDP growth rate in India, indicates that between 2011 and 2016, as India's rank in Transparency International's global corruption index improved from 96 to 79, its GDP growth rate improved by half a percentage point.

The decrease in corruption level in India has translated into foreign fund inflows. The data shows that there has been a significant improvement in foreign investor confidence towards India with the net FDI inflows to India increasing by 64% in the last six years, i.e. from $21.9 billion in the fiscal year 2012 to $35.9 billion in the fiscal year 2017.91

4.47 The Supreme Court, In Re: Special Courts Bill,92 aptly remarked that, "Corruption and repression - cousins in such situation - hijack development process and in the long run lagging national progress means ebbing people's confidence in constitutional means to social justice." Thus, it would be appropriate to say that corruption in any form, if rampant in public or private sphere, obliterates without distinction, slowly but steadily.

4.48 The duty of sports federations to uphold rights is not merely moral and abstract but rather practical and expedient. A legal obligation has been envisaged through the UN guiding principles on business and human rights. The international body, in emphasising on the significance of human rights, goes so far as to impose responsibility even on purely commercial private entities. Thus, bodies such as sports federations that are in fact performing public functions, come within this fold by implication.

[emphasis added]

4.49 The aforesaid has also been recognized in Professor Ruggie's Report on FIFA, published in April 2016, that adapts the UN Guiding Principles to FIFA's operations including the FIFA World Cup. Ruggie discusses briefly the corruption risks linked to FIFA and its events and their impact on human rights:

Bribery and corruption is not only about giving and taking money for private gain that has been intended for broader social purposes. It may also enable the parties involved to evade legal and contractual requirements, including those protecting human rights. Lack of financial integrity, therefore, is a foundational source of human rights risks.93

4.50 The sooner it is realised that sports markets are public goods, the more self-evident will be the public interest in ensuring fair play in their governance. The mantra must be to promote what has the potential to deliver value to the market and limit that which doesn't. Ultimately the role of sports governance must be to deliver value to the athlete, potential athlete, the fan, and the public in general. In all of these, are embedded the broader concept of national interest.94



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