WHILE the government of Bangladesh was busy hosting the Investment Summit, the country witnessed the unfortunate incidents of vandalism at several outlets of Bata, KFC, and Domino’s Pizza under the pretext of the ‘Protest for Palestine’ on April 7, 2025. Although the government acted quickly to arrest the suspects involved in these events, its failure to prevent the incidents raises serious questions under international investment law, most notably, to what extent Bangladesh is prepared to provide ‘Full Protection and Security’ treatment to foreign investors and investments.
Full Protection and Security, commonly referred to as FPS, is one of the key protections afforded to foreign investments by host states, alongside Fair and Equitable Treatment (FET), under modern investment treaties. While there is no universally accepted definition of FPS, it generally implies that the host state, i.e., the state where the foreign investment is located, must provide physical protection from non-state actors to foreign investments and investors. Depending on the specific treaty, FPS is often complemented or supplemented by FET, which typically ensures legal protection from the actions of government entities of the host state.
It is pertinent to make two additional points. First, the obligation to ensure FPS treatment is an obligation of conduct, also known as a duty of due diligence. This means that the host state must deploy all necessary and available means, often within the limits of its resources and capabilities, to ensure the physical safety of foreign investors and their investments. Second, the FPS obligation comprises two distinct duties: (i) the obligation to prevent harmful acts against foreign investors and their investments and (ii) the obligation to respond to such acts in cases where prevention fails. Nevertheless, it is widely acknowledged that prevention is better than cure, and that principle should guide the implementation of the FPS obligation.
FPS protection lies at the core of Bangladesh’s investment treaty practice. At present, Bangladesh has signed at least 19 bilateral investment treaties that incorporate this protection using various terms, such as ‘adequate protection of security’, ‘full and constant protection and security’, ‘constant protection and security’, ‘full and adequate protection and security’, and simply ‘adequate protection’. Despite these terminological differences, they all aim to offer the same substantive level of protection as encompassed by the FPS standard. From a domestic legal perspective, Section 4 of the Foreign Private Investment (Promotion and Protection) Act, 1980, provides that ‘The Government shall accord fair and equitable treatment to foreign private investment, which shall enjoy full protection and security in Bangladesh.’ However, there is no indication of how the government will implement such protections in concrete terms.
There are two general reasons why FPS treatment must be taken seriously. From the investor’s perspective, a state’s demonstrated willingness (or lack thereof) to ensure FPS significantly influences investment decisions. This is particularly relevant in a country like Bangladesh, which is often characterised by democratic instability and irregular law and order conditions. Regardless of how extensively FPS protection is articulated on paper through investment treaties, it is the host state’s concrete and visible measures to protect foreign investments that shape investor confidence.
From the host state’s perspective, failure to provide the level of protection and security required under international law can give rise to investment claims and the obligation to pay reparations, including financial compensation. Several arbitral tribunals have awarded compensation to foreign investors for the host state’s failure to prevent physical harm caused by private individuals. Therefore, the FPS standard affects not only the reputation of a state as an investment destination but also exposes it to potential financial liability.
To date, Bangladesh has been fortunate not to face any arbitration cases involving FPS obligations. However, this does not imply that the country has a robust policy framework to guarantee the physical safety of foreign investors within its territory. Bangladesh is frequently marked by political unrest, violent protests, and a lack of effective legal action against acts of vandalism. While the government attempted to mitigate the fallout from the attacks on Bata, KFC, and Domino’s Pizza by swiftly identifying and arresting the perpetrators, the damage inflicted by those events will haunt the country in the long term. It is nowÌýimperative for the government to develop a comprehensive plan to protect foreign investors and investments from similar or even more severe incidents in the future. Needless to say, domestic investors and investments should also benefit from such protective measures.
As Bangladesh aims to attract large-scale foreign investments, achieving this goal is unrealistic within the current legal, administrative, and policy framework. Although Bangladesh is obligated to provide FPS treatment to foreign investors and investments from 20 countries under bilateral investment treaties, and all the investors, irrespective of their nationalities, more broadly under the 1980 Act, there is no policy document that articulates how the country is prepared to deliver such protection and security. It would not be an overstatement to suggest that Bangladesh’s lack of a clear policy framework for investment protection, particularly with regard to FET and FPS, has diminished its ability to attract substantial foreign investments. In this context, the government should adopt a balanced policy framework on these protection standards, aligned with Bangladesh’s international obligations and general practices in international investment law. This must be accompanied by visible administrative and judicial reforms. Indeed, such reforms should not only be implemented, but they must also beÌýseenÌýto be implemented.
In the same vein, the government of Bangladesh must address the underlying and potential root causes that could jeopardise the protection and security of foreign investors and their investments. Unless Bangladesh can establish political stability, ensure peaceful democratic transitions, and guarantee judicial due process, it risks falling behind its regional competitors in the race for foreign investment. While achieving these goals may take a considerable amount of time, Bangladesh will never reach its desired outcomes unless it begins to act in that direction. Simultaneously, Bangladesh should also ensure that other relevant investment protections are in place during both the pre-establishment and post-establishment phases of foreign investment.
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Quazi Omar FoysalÌýis a lecturer at American International University-Bangladesh and advocate at the Supreme Court.
