Incorporating the Social License to Operate into International Investment Law: Taking Stock from the Brazilian Experience

Abstract

Abstract The social license to operate can be broadly defined as the social acceptability of an investor’s business practices by local communities. This article argues that the social license to operate can be incorporated into international investment law by allowing for local communities’ participation. The Brazilian cooperation and facilitation of investments agreements (CFIA) are used as a benchmark to sustain this argument. I explain that the CFIAs make room for the social license to operate at a procedural and at a substantial level. First, local communities can participate in the dispute prevention procedures provided for by CFIA. By this means, they bring a third party’s perspective into the investor-State relationship by voicing its concerns on the investors’ activities. Substantially, this can be supported by the detailed provisions on corporate social responsibility enshrined in the CFIA and which can be invoked by the local communities during the dispute prevention procedure.