FIDE Statutes – Summary of the proposed changes by WHITE & CASE Law firm, New York city (USA)

Sofia, 30.08.2012
To the Presidents and Delegates of All National Federations

Dear chess friends,

As you probably know, the most important issue of the FIDE GA in Istanbul will be the proposed changes of the FIDE Statutes.

Having in mind the extreme importance of this matter for the future of chess, the Federations of Bulgaria, England and the USA have hired the prestigious Law firm White & Case from New York to analyze the proposed changes and prepare the report.

Please, find attached the summary of their work for your kind attention.

I kindly ask you to read it carefully and make your own conclusions.

Gens una sumus.

Silvio Danailov
President of the Bulgarian Chess Federation
and the European Chess Union

www.danailov-for-president.com
Twitter: @SilvioDanailov

FIDE STATUTES – SUMMARY OF THE PROPOSED CHANGES

/BY WHITE&CASE LAW FIRM, NEW YORK CITY (USA)/

Dear Chess Friends:

Together we face an important challenge at the 2012 Congress in Istanbul – the reform of our organization’s Statutes and Electoral Regulations (ERs). Serious changes to our rules are necessary to ensure that our federation has well-drafted rules in good English, follows international best practices, and is well governed, transparent and fair to all. Our confusing and poorly drafted rules have led to great tensions in our ranks and resulted in two cases before the Court of Arbitration for Sport. We must have clear and precise rules and procedures to be able to spend our time and resources on chess, rather than fighting among ourselves. FIDE and the Turkish Chess Federation criticize and even threaten to expel federations that make good-faith arguments in trying to interpret our tangled and poorly drafted rules. The right response is rather to clarify and change rules that are confusing or controversial. Indeed, in the most recent CAS case, decided in July, the arbitral panel took note of this unsustainable state of affairs and essentially ordered us to amend our rules. Here’s what the arbitral tribunal said in its decision:

“The Panel has reviewed and duly considered both parties’ pleadings on the merits, and notes that these at the very least raise a number of prima facie issues regarding the clarity of the FIDE Statutes and Electoral Regulations, and regarding the internal governance of FIDE … the Panel would encourage FIDE to assess critically its past practice in light of the texts of its statutes and regulations, so as to maintain an appropriate level of transparency in its decision-making process.” (English and Georgian Chess Federations v. FIDE, paragraphs 102- 103)

We applaud the fact that FIDE started the process of reform by proposing in April certain changes to its Statutes and Electoral Regulations. However, while some of these suggestions were good, many others were ill conceived and some were clearly designed to keep the current leadership in power for the foreseeable future. Also, FIDE’s proposals contained many contradictory provisions and the English was very poor and therefore often unclear.

In response, the Bulgarian, English and US Chess Federations asked international law firm White & Case to review our Statutes and Electoral Regulations and to provide suggestions in good English on the most important provisions.These were submitted for inclusion in the General Assembly’s agenda, along with an Executive Summary of the most important provisions. They can be found on the FIDE website here: http://www.fide.com/images/stories/NEWS_2012/Congress/Annex_10F_-_Letter_from_Bulgarian_English_and_US_Chess_Federations.pdf

The Constitutional Commission agreed with several of White & Case’s comments, and to its credit FIDE’s leadership has adopted at least half of the many important proposals made by White & Case. This demonstrates how good and important these proposals were. But FIDE still fails to address some of the most important issues that have led to problems. Also, many proposals remain in bad English or contradict other provisions in the rules. Half measures will not do, and if we ignore the CAS’s call for clarity in our rules, we will find ourselves once again fighting over them. This must be avoided.

So we ask everyone who cares about chess to collaborate constructively to reform our rules in Istanbul. What follows is a brief analysis of some the major provisions that FIDE has failed to change or has amended inadequately. There are, however, many more that need to be addressed with care at the upcoming Congress than can be discussed here. A more detailed review is available in the White & Case memo, referenced above.

Unlimited Vice-Presidential Nominations: The Statutes (Article 9.6) currently allow the FIDE President to appoint two Vice Presidents before the General Assembly then votes on three additional Vice Presidents – so a total of five Vice Presidents. You may remember that this provision was introduced in the Statutes at the request of Ignatius Leong and Morten Sand, after the 2002 elections. FIDE proposes to delete this provision, and instead to include a provision in the Electoral Regulations giving the FIDE President the right to appoint an unlimited number of Vice Presidents. Following criticism on this approach, in its second round of changes FIDE allows the General Assembly to “confirm or reject” this proposal (see FIDE’s ERs 2.1 and 2.4).

Why This Is Bad: It is destabilizing to have the number of voting Vice Presidents and members of the Presidential Board change every four years. No other serious organization allows the number of its officials to change at the whim of the President. Also, the number of Vice Presidents should be limited, as too high a number reduces the prestige of the office and is a financial burden on the organization. Worse, the number of VPs would be hidden by the FIDE President until after he is elected, and then he would not need to make his appointments until after the General Assembly’s election of the elected Vice Presidents. Such an approach creates a real danger of political favoritism and corruption during the Presidential elections, as the candidates can promise Vice Presidential positions to many in return for votes. Finally, it does not make sense that a provision such as this one – which regulates the number of FIDE officials and the composition of the Presidential Board – is located in the Electoral Regulations (which regulate election procedures), rather than the Statutes (which regulate the structure of the organization).

Better Approach: The rule in the Statutes allowing the President to appoint two Vice Presidents before the General Assembly votes on three additional Vice Presidents should be maintained. This allows for a stable and reasonable number of Vice Presidents, and prevents misuse of these positions during the election campaign. Also, this provision belongs in the Statutes. Note that the Constitutional Commission is of the same opinion that major non-procedural provisions belong in the Statutes rather than the Electoral Regulations. If there is a need to change the number of Vice Presidents, this can be done with a 2/3 majority at any General Assembly meeting.

•Proxies: FIDE removes the entire Proxy section from the Statutes into the Electoral Regulations and provides only minimal procedural clarifications (see Statutes Chapter 4 and FIDE’s proposed new ER paragraph 5).

Why This Is Bad: The proxy provisions are relevant also in non-election years as a federation may want to give a proxy for a General Assembly meeting in a non-election year. So, the proxy provisions should be in the Statutes, not the Electoral Regulations (which are relevant only in election years). As to FIDE’s limited and confusing changes to the proxy provisions, FIDE has historically suffered tensions and problems in resolving confusing proxy issues (remember the many hours lost on the Peru question some years ago!). Bad proxies and multiple assignments of proxies also provide an opportunity for voting irregularities. The process of verifying proxies has been haphazard and disorganized, with not enough transparency and advance notice. Finally, there is too much granting of proxies even when the granting federation is already adequately represented and there is no need of a proxy.

Better Approach: The proxy provisions should remain in the Statutes. Further, given the sensitivity and potential for abuse, a neutral professional entity (a “Big Four” accounting firm) should verify the proxies, establish the final list of those eligible to vote, ensure that this information is publicly available in advance of the General Assembly meeting, and report on it at the beginning of the meeting before the roll call. In addition, a proxy should only be given if a federation’s Delegate or President is actually absent from the assembly in question. No reassignment of proxies should be allowed unless a person has been assigned more than one proxy. Finally, the proxy registration period should not end two weeks before the General Assembly meeting as FIDE proposes, because federations need more time to decide whether a proxy is necessary and to whom it should be granted.

•Denial of Jurisdiction at Court of Arbitration for Sport: FIDE proposes to send disputes relating to all matters other than the “playing of chess” to the courts of Lausanne in Switzerland, rather than the English-speaking Olympic court (see Statutes Chapter 13).

Why This Is Bad: FIDE is being self-serving in this proposal, at the expense of access to justice for member federations. First, FIDE’s lawyers are based in Lausanne, but with the exception of perhaps the Swiss Chess Federation, our members do not use Swiss attorneys. Only FIDE’s lawyers will gain from this provision (which they probably wrote) while our federations would be forced to hire Swiss lawyers to handle their cases, instead of using familiar counsel. Second., English is FIDE’s official language (and the international language), but FIDE’s proposal would require many grievances to be heard in French. Third, FIDE would back us away from the prestige of using the premier sports tribunal in the world and would damage our Olympic aspirations. Fourth, CAS has the sports and sports-federation experience we need to resolve our disputes.

Better Approach: Leave untouched the CAS’s jurisdiction as described in current Article 14.1.

•Unfair advantage to incumbents running for reelection: FIDE retains the speeches of the incumbent President and Treasurer before the elections take place (see ER 4.1)

Why This Is Bad: Having these speeches before the election denies a fair playing field by giving the incumbents (historically, FIDE officers have, of course, run for reelection) an unfair advantage by allowing them to speak and influence the federations immediately before votes are to be cast. There is no reason why the incumbent FIDE President and Treasurer cannot make their reports after the elections are concluded.

Better Approach: In election years, the elections should be the first event of the General Assembly, with any reports on the state of FIDE to follow.

•Individual presidents, not federations, nominate candidates: FIDE proposes stripping from federations the power to nominate candidates, and requiring the vote of five federation presidents to nominate (see ER 1.2)

Why This Is Bad: FIDE is right to increase to five the number of voices required to nominate candidates for the Presidential tickets. But those voices should be federations’, not individuals’. First, FIDE is a federation of federations, and federation sovereignty is paramount. Requiring federations to take nomination decisions encourages discussion and deliberation about candidates within the national federations before they reach the FIDE arena. Second, vesting the nomination power in five individuals (the federation presidents), without the say of their constituents, could lead to abuses. There is no good reason to strip federations of this power.

Better Approach: The power to nominate someone to run for FIDE office should remain in federations, and not be vested in individuals.

Some other FIDE proposals that you should watch out for in Istanbul:

• FIDE refuses to provide that the General Assembly has the sole power to create new FIDE offices and organs, and that any other FIDE positions created by the Presidential Board should be submitted to the next General Assembly for ratification (see Statutes Chapter 3)

• FIDE would muzzle federations by allowing them only one counselor at the General Assembly without the right to speak, and seeks to prevent federations from commenting on pending legislation in the Executive Board meetings (see Statutes 4.3 and 5.2)

• FIDE rightly accepted White & Case’s conflict-of-interest provisions, but dropped an important section regarding transparency of income (see Statutes Chapter 3)

• FIDE does not do enough to clarify the voting procedures, and the timing and the rights of federations to speak, at the General Assembly (see Statutes 4.7)

• FIDE still allows the President to sign contracts binding FIDE without prior Presidential Board approval, even though such approval is easy to obtain (see Statutes 9.1)

• FIDE rejects the proposal of reasonable term limits for the FIDE President. Such limits are typical in democracies and should also be adopted in FIDE.

* * *

In this brief document, we have focused our attention only on the principal issues that arise from FIDE’s drafts. We recommend that in due course the FIDE Statutes and Electoral Regulations undergo a more comprehensive substantive and linguistic review, to ensure that other problems not addressed at this time are corrected. In the meantime, making the changes proposed in the White & Case memo are the bare minimum required to bring about a more transparent, well-governed and harmonious FIDE. Should you wish to discuss any provisions in detail before the Congress or at it, please do not hesitate to contact Ank Santens (asantens@whitecase.com) or Louis O’Neill (loneill@whitecase.com) of White & Case.

August 2012, New York
WHITE&CASE

You can download the Open letter of Mr.Silvio Danailov from here Open letter and the White & Case’s Summary proposed changes from hereWhite&Case Summary

You can leave a response, or trackback from your own site.

Leave a Reply

Powered by WordPress