Full Protection and Security (for Racial Capitalism)

Scholars and practitioners of international investment law have repeatedly attempted to legitimise the field by presenting it as an antidote against the arbitrary and excessive powers of the (postcolonial) state. Early cases, such as AAPL v. Sri Lanka, have contributed to this popular, yet ultimately unpersuasive, argument by seemingly constraining the conduct of warfare in the Global South. My contribution questions this received wisdom and in so doing it shows that repressive state violence is not simply permitted but even mandated by international investment law. My analysis focuses on the obligation of host states to provide ‘full protection and security’ (FPS) to foreign investors. My argument unfolds in three steps. First, I examine in detail the tribunal’s approach to FPS in the von Pezold case, an award that stands out amongst the jurisprudent of investment tribunals due to its explicit engagement with questions of race/ism. Secondly, I construct a theory of FPS that draws from US legal realism in order to show that international investment law does not create bilateral legal relations (state-investor) but rather directly determines (and in particular, diminishes) the sphere of lawful action of a potentially indefinite number of actors subject to the host state’s jurisdiction. In other words, I read FPS as a legal standard that aims to create an authoritarian form of statehood and mobilise the state against the exploited and racialised sections of its population. Finally, I link the above observation to broader debates about ‘racial capitalism’. I show that the FPS demands a particular form of racial sovereignty in defence of global capitalist accumulation, and it does so as a matter of structural allocation of violence, and not simply due to bigoted or insensitive language.