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Annan calls for systematic approach to dealing with business and armed conflicts

15 April 2004 Secretary-General Kofi Annan today called for a "more systematic approach" across the United Nations to ensure that businesses can conduct their operations in countries either facing or emerging from conflicts but at the same time do not behave in a way that exploits or exacerbates the strife.

In remarks to a Security Council debate about the role of business in conflict prevention, peacekeeping and post-conflict peacebuilding, Mr. Annan announced he has set up an inter-agency group within the UN to study the political economy of armed conflict and recommend ways in which the UN system and Member States can respond effectively.

The Secretary-General said that while there have been many attempts to tackle the issues surrounding business and countries in or emerging from conflict, they have generally been ad hoc and lacking coordination. He said "a more systematic approach" is necessary.

"It would give us the tools with which to better understand, and more actively influence, the economic incentives and disincentives that drive the dynamics of armed conflict," he said.

Transparency is essential, Mr. Annan said, noting he has recently established an independent probe into allegations of fraud, corruption and mismanagement with the UN's Oil-for-Food Programme.

Pointing out that the private sector can be both a good and bad influence on areas of armed conflict, he said that by investing or operating in those areas, many companies have the potential to help a community "turn its back on conflict, or exacerbate the tensions that fuelled conflict in the first place."

Mr. Annan also noted the exploitation of, and trade in, lucrative natural resources such as oil and diamonds - often to the detriment of the local community - by governments and rebel groups to sustain their military activities.

He called on the Security Council and all UN Member States to do more to make sure that the private sector acts responsibly in countries beset by conflict. He cited several initiatives, such as the Kimberley Process - which has reduced the trade in "conflict diamonds" - and the UN's own Global Compact for improved corporate citizenship as good bases from which to build an overall programme.

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