Abstract
With the development of BIT, the regulation of 'sufficient protection and safety' was introduced to protect and promote foreign investment. Sufficient protection and safety regulations have traditionally been limited to protecting investors and investment from physical damage and threats from troops, soldiers, and rebel workers in investment host countries. Cases applying sufficient protection and safety have dealt with damage to the physical assets of investors committed by third parties unless the governments of investment host countries exercise significant care in preventing damage or punishing actors. Regarding the meaning of ‘due diligence’, the arbitral tribunal has mentioned that due diligence is no more than or less reasonable precautions that are expected to be exercised by a legitimately operated government in similar situations. There are many cases in which the 'sufficient protection and safety' regulation is interpreted as a broad concept that includes providing legal stability as well as physical protection. It is difficult to say that a sufficient consensus has been formed on whether the ‘sufficient protection and safety’ standard should provide a business environment or legal stability in excess of the country's obligation to provide simple physical safety for foreign investors and investments. Furthermore, even if the scope of application of this provision is widely interpreted, the state cannot even take issue with exercising its legitimate regulatory authority to achieve reasonable policy purposes. The obligation to provide sufficient protection and safety for foreign investment is to protect investors from bullying by third parties or state actors, but banning regulations or legislation that affect investors should not be interpreted.
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