The Full Protection and Security Standard Comes of Age: Yet another challenge for states in investment treaty arbitration?

The paper examines how the 'full protection and security' (FPS) standard has evolved from a narrow focus on physical security to a broader interpretation including legal and commercial security. It analyzes conflicting arbitral rulings on whether FPS is an independent treaty standard or reflects the customary international law minimum standard of treatment for aliens. The author highlights the risks for developing states, noting a 46% success rate for investors in FPS claims over 21 years, and suggests that states should explicitly define the scope of FPS in treaties to avoid expansive interpretations by tribunals.

• The interpretation of the 'full protection and security' (FPS) standard has shifted from a narrow focus on physical security to a broader scope that includes legal and commercial security. While some tribunals, such as those in Saluka v. Czech Republic (2006) and BG Group v. Argentina (2007), limit the standard to physical damage, others, including Biwater v. Tanzania (2008), argue it implies a "State’s guarantee of stability in a secure environment, both physical, commercial and legal".
• There is significant disagreement among arbitral tribunals regarding whether the FPS standard is an independent treaty obligation or a reflection of the customary international law minimum standard of treatment for aliens. While the NAFTA Free Trade Commission's 2001 interpretive statement and U.S. and Canadian model BITs peg the standard to customary international law, other tribunals, such as in AAPL v. Sri Lanka (1990), have rejected this limitation, treating it as an independent treaty standard.
• Arbitral tribunals generally reject the notion that the FPS standard imposes strict or absolute liability, instead applying a 'due diligence' or 'reasonable measures' test. However, the level of diligence expected is often high and not necessarily proportionate to a state's available resources, although the Pantechniki v. Albania (2009) ruling suggested that a state's resources should be considered in cases of public violence, but not in denial-of-justice claims.
• The FPS standard can be particularly onerous for developing states, with investors achieving a 46% success rate in FPS claims over a 21-year period. This risk has led some regional investment treaties, such as those for the Common Market for Eastern and Southern Africa (COMESA, 2007) and the Southern African Development Community (SADC, 2006), to omit the FPS standard entirely.
• To minimize liability exposure, states have several drafting and policy options: omitting the FPS obligation entirely, explicitly limiting it to physical or police protection (as seen in the U.S. Model BIT), pegging the standard to national or most-favoured-nation treatment, or incorporating a reference to customary international law. For existing treaties, states can seek amendments or issue joint or unilateral interpretive statements.

APA

Malik, M. (2011). The Full Protection and Security Standard Comes of Age: Yet another challenge for states in investment treaty arbitration? International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/full_protection.pdf

Chicago

Malik, Mahnaz. The Full Protection and Security Standard Comes of Age: Yet another challenge for states in investment treaty arbitration? International Institute for Sustainable Development, 2011. https://www.iisd.org/system/files/publications/full_protection.pdf.

Wikipedia

{{cite report |last1=Malik |first1=Mahnaz |title=The Full Protection and Security Standard Comes of Age: Yet another challenge for states in investment treaty arbitration? |publisher=International Institute for Sustainable Development |date=November 2011 |url=https://www.iisd.org/system/files/publications/full_protection.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{malik2011full, author = {Malik, Mahnaz}, title = {{The Full Protection and Security Standard Comes of Age: Yet another challenge for states in investment treaty arbitration?}}, institution = {International Institute for Sustainable Development}, year = {2011}, month = nov, url = {https://www.iisd.org/system/files/publications/full_protection.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }