Full protection and security in international investment law refers to the state’s obligation to provide the investor with a safe and secure investment environment. The standards FPS and FET are designed to achieve include regulatory and legal protection. In the event that an investor suffers a loss or damage in an investment, they must be able to seek legal recourse from the receiving state and be able to have their claim properly processed by an impartial tribunal. Infringement of the FPS and FET standards would violate the investor’s rights.
The full protection and security standard is a basic requirement in most investment contracts. In the past, this standard was interpreted as the obligation of the receiving state to implement measures that would protect the investor’s investments. However, in some cases, the FPSS standard has broader application. For example, it may apply to physical security of a business.
Full protection and security standards are important for foreign investors to consider when negotiating investment deals with developing countries. In particular, it is important to consider whether a host state can be held liable for civil unrest in the private sector. Likewise, full protection and security standards should consider the adequacy of legal enforcement by the host state.
The concept of FPSS is found in BITs under several formulations. The terms used in different BITs differ slightly but generally express the same concept. For example, Article 4.1 of the Argentine Republic-Japan BIT expresses this concept as “full protection and security.” In addition, the Energy Charter Treaty (“ECT”) and the Arab Republic of Egypt BIT both contain similar wording.