Description

Local resistance, amplified by social media and rights-conscious citizens, increasingly triggers investor-state disputes. Investment jurisprudence shows that improper management of community relations by investors—such as ignoring grievances, under-investing in communities, or coercive tactics—has become as common a source of local opposition as human-rights, environmental or labour issues.
The international investment treaty-making practice anticipated the risk as early as 2008, when the Canada–Peru FTA introduced a CSR clause expressly covering “community relations”, yet the provision lay dormant until Lupaka v. Peru. There, Peru invoked Article 810 to argue that investors must secure a community “social licence.” An increasing number of new-generation IIAs have begun to explicitly incorporate community relations provisions, such as the Article 17.15(2)(3) of Canada-Ukraine Modernized FTA (2023) and the Article 12 of Brazil-India BIT (2020), but doctrinal guidance remains underdeveloped.
This study aims to clarify the scope, nature and function of community-relations provisions. First, drawing on public-relations and CSR theories, it establishes the normative independence of investors’ community-relations duties and the rationales for embedding them in IIAs. Second, by mapping treaty practice, it will analyze the nature of community relations provisions from two dimensions: the subject of responsibilities and the internalization of external responsibilities. Subsequently, it will explore the functional positioning of community relations provisions in IIAs from both ex post dispute resolution and ex ante dispute prevention. Finally, it will study the cases of Chinese mining and infrastructure projects along the Belt and Road, which were suspended or terminated due to poor community relations management, as well as Chinese IIA-making practice, to explore the possible approaches for incorporating community relations provisions into Chinese IIAs.