Anti-doping: Considerations for corporate sponsorship

Posted in Regulations Governance, anti-bribery and corruption

Authored by Deborah Tsai

The ongoing COVID-19 pandemic has not only caused the postponement of major sporting events (including the Tokyo 2020 Olympic Games), but has uprooted athletes from their regular training environments and support systems. Restrictions put in place to slow the spread of COVID-19 have also limited the ability of anti-doping organisations such as Sport Integrity Australia (SIA) – formerly the Australian Sports Anti-doping Authority (ASADA) – to run regular in and out-of-competition drug testing and educational programs for athletes and support staff.

Despite these disruptions, the obligation to comply with the World Anti-Doping Code (the Code) has not diminished, and failure to comply will not only impact an athlete’s ability to compete, but will have serious reputational consequences for the athlete, sporting bodies and corporations associated with that athlete.

Given the risk of reputational damage from continuing to sponsor an athlete who has fallen foul of the anti-doping regime, private organisations may consider some important lessons from national sports organisations (NSOs) and state institutes of sport, who play significant roles in assisting athletes to comply with their Code obligations. These organisations regularly update their anti-doping policies and educate participants on the anti-doping system as a means of ensuring compliance. Likewise, sponsors can mitigate reputational risk by implementing appropriate contractual provisions, beyond the typical “disrepute” clauses, which we have set out further below.

These clauses are not necessarily specific to anti-doping and may also apply in other instances of athlete misbehaviour, including criminal conduct or conduct that does not align with the values of the organisation (e.g. racism).

Anti-doping in Australia

Australia is required to implement anti-doping arrangements consistent with the Code. This role was formerly carried out by ASADA and taken over by SIA on 1 July 2020. This is split into two arms: Supplements[1] and Anti-Doping.[2]

The Code identifies 10 anti-doping rule violations (ADRVs), but the most well-known offence is an athlete having the presence of a prohibited substance in their sample. Prohibited substances are identified on WADA’s Prohibited List (the Prohibited List), updated annually on 1 January.[3] Strict liability applies, making the athlete liable for any substances found in their sample, and an ADRV occurs whenever a prohibited substance is found in the sample, whether or not the athlete intentionally used the substance. 

For athletes, committing an ADRV may lead to the loss of competition results and significant reputational damage. Also, if the athlete challenges the ADRV or appeals their sanction, the tribunal process can take months or even years to conclude, affecting training and competition.

Considerations for corporate sponsors

Corporate sponsors can follow the contractual steps taken by NSOs and State Institutes of Sport to mitigate the risks of non-compliance with the Code. “Disrepute” clauses — an undertaking from the athlete that that they have not participated in, or have disclosed, any conduct prior to entering the contract which may adversely affect the sponsor’s interests may be useful. Below are some other considerations corporate sponsors may take into account when reviewing existing or drafting new sponsorship agreements.  

  1. Incorporation of SIA’s anti-doping policy

Corporate sponsors could incorporate SIA’s anti-doping policy into their sponsorship arrangements. NSOs and State Institutes of Sport have their own anti-doping polices mirroring the Code and SIA’s anti-doping policy, and clauses incorporating these policies feature in athlete team agreements, enabling team membership or benefits to be withdrawn if the athlete commits an ADRV.  

Examples of these clauses are provided below:

Synchronised Swimming Australia Inc (SSAI)

5.2 Drug Testing

The Athlete acknowledges and agrees that:

  • if required by SSAI they shall provide a sample of their own body fluid for analysis by the Australian Sports Anti-Doping Authority to determine whether or not they have taken or used drugs, stimulants or substances that modify or alter growth, behaviour or performance […]

Western Australian Institute of Sport (WAIS) Athlete Agreement

By authorising this Agreement, you [the athlete] acknowledge that you have read and understood and agree to be bound by the terms of the WAIS Anti-Doping Policy […]

  1. Anti-doping education requirements

Another contractual obligation which sporting organisations place on athletes is the requirement to complete annual anti-doping education. For example, under the WAIS Athlete Agreement, athletes are required to complete anti-doping eLearning provided by SIA as a condition of their scholarship. These modules highlight changes to the Prohibited List, familiarise and remind athletes of their obligations under the whereabouts system, and discuss the appropriate use of Therapeutic Use Exemptions.[4]

Corporate sponsors could draft similar obligations into sponsorship agreements, ensuring that the sponsored athlete remains up-to-date on their anti-doping obligations and reducing the risk of having to terminate the agreement due to anti-doping breaches.

  1. Termination of contracts for breach of anti-doping policy

Finally, corporate sponsors should ensure they are contractually entitled to take action or terminate a sponsorship agreement for failure to comply with the Code. Again, these clauses are frequently a feature of athlete team agreements, an example of which is provided below:  

Australian Olympic Team Agreement

5.2. If I breach any term of this Agreement during the Games Period […] disciplinary sanctions to be applied […] may include but are not limited to:

  • termination of my membership of the Team […]

Conclusion

Failure to comply with the Code has significant ramifications for an athlete’s career and reputation. Corporate sponsors should be aware of the potential loss of exposure and negative press by association and incorporate appropriate contractual provisions to mitigate these risks.

The investment in athletes and teams is under increasing scrutiny given the limited availability of capital and marketing expenditure because of COVID-19. Ensuring that the sponsorship agreement contemplates the situations and incorporates the clauses mentioned above is especially important. Further, the opportunities in the sports world have changed too, and the various competition formats (regular, without spectators and even virtual)[5] present different opportunities and visibility for sponsors. Organisations should ensure that these factors are taken into account in both new and existing sponsorship arrangements.   

If any questions arise out of the above, please email the author.

[1] https://www.sportintegrity.gov.au/what-we-do/supplements-sport

[2] https://www.sportintegrity.gov.au/what-we-do/anti-doping

[3] https://www.wada-ama.org/en/content/what-is-prohibited

[4] https://www.wada-ama.org/en/what-we-do/science-medical/therapeutic-use-exemptions

[5] For example, Swimming Australia announced that the National Short Course Championships would be held virtually to circumvent travel restrictions: https://www.swimmingworldmagazine.com/news/swimming-australia-announces-history-making-virtual-inter-state-short-course-meet/

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