Full protection and security (FPS) is a treaty standard, most commonly found in bilateral investment treaties (BITs) and investment chapters of free trade agreements, requiring the host state to exercise due diligence in protecting foreign investments from physical (and sometimes legal) harm. It does not make the state a guarantor against all loss; rather, it obliges the state to take reasonable measures that a well-administered government would take in the circumstances.
The standard traces back to early Friendship, Commerce and Navigation treaties and has been carried into modern instruments such as the Energy Charter Treaty and most BITs concluded since the 1960s. Tribunals have repeatedly emphasized the due diligence character of the obligation. In AAPL v. Sri Lanka (ICSID, 1990), one of the earliest BIT awards, the tribunal found Sri Lanka liable for failing to take precautionary measures to protect an investor's shrimp farm destroyed during counter-insurgency operations. In AMT v. Zaire (ICSID, 1997) and Wena Hotels v. Egypt (ICSID, 2000), tribunals likewise held states responsible for failing to prevent or respond adequately to attacks on investor property.
A recurring interpretive debate is whether FPS extends beyond physical security to encompass legal security — protection of the legal framework surrounding the investment. Tribunals in CME v. Czech Republic (2003) and Azurix v. Argentina (2006) read the clause broadly, while others (e.g., Saluka v. Czech Republic, 2006; BG Group v. Argentina, 2007) limited it to physical protection. The drafting of the clause matters: some treaties qualify it as "protection and security" or "constant protection and security," and recent treaty practice (e.g., the 2012 US Model BIT, CETA) explicitly ties the standard to the customary international law minimum standard of treatment for aliens.
FPS is typically pleaded alongside fair and equitable treatment (FET), though tribunals treat them as distinct obligations with different thresholds.
Example
In AAPL v. Sri Lanka (1990), an ICSID tribunal found Sri Lanka had breached the full protection and security clause of the UK–Sri Lanka BIT after government forces destroyed a Hong Kong investor's shrimp farm during anti-insurgency operations.
Frequently asked questions
No. Tribunals consistently interpret it as a due diligence obligation, requiring reasonable protective measures rather than strict liability for all harm to the investment.
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