Sebastián Preller-Bórquez
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Investors’ need to obtain social license
A sustainable development argument in investor–state dispute settlement
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Chapter 13 addresses how the sustainable development narrative assists in the construction of successful arguments when governments defend the measures they adopt as responses to the investor’s failure to attain social license. The author shows that in the narrative of balance subjacent to sustainable development, host states may find a way to resist the mainstream rules of international investment law mostly established for the protection of foreign investors rather than for the protection of local communities and the environment. Thus, the sustainable development narrative of balance may provide a tool for host states to accommodate social and environmental concerns in a regime that appears to be mostly designed to protect investors engaging in transnational businesses. The chapter begins with an explanation of the expected role of host states and the paradigm of the protection of the investment as identified in current foreign investment regimes. It then addresses the legal basis found in international law for the creation of obligations relating to the attainment of social license and their relationship with sustainable development. The chapter then carries out some case studies in which the measures taken by the host state based on the alleged failure of the investor to comply with its obligation to attain social license are reviewed in order to determine the responsibility of the former. The author finally discusses the application of the contributory fault standard and the potential use that the sustainable development narrative of balance may have to this end by providing a comprehensive assessment of the investor’s obligation to attain social license.

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