15 April 2004 - From exploring the importance of a growing economy as an incentive to living in peace to studying the need to better monitor corporate behaviour to discussing the crucial function the private sector can play in encouraging development, the United Nations Security Council today held a debate about the role of business in countries facing or emerging from war. The Council's 15 members examined what businesses should do in countries affected by conflict, and how the UN system and the wider international community should respond if corporations breach accepted norms and standards.

Speaking at the outset of the session, Secretary-General Kofi Annan said the UN needed to have a "more systematic approach" between its security and development arms if business is to play a constructive role in countries in or emerging from armed conflict.

He said transparency is vital in dealing with the relationship between business and armed conflict, pointing out he has set up an independent probe into allegations of fraud, corruption and mismanagement in the UN's Oil-for-Food Programme.

James Wolfensohn, President of the World Bank, told the Council that the best way to discourage conflict was to ensure that the world had a growing economy in which everyone felt they could share.

He said poor people, instead of wanting charity, preferred to have the economic opportunity to work and provide for their families and their children.

This theme was continued by Ambassador Marjatta Rasi of Finland, President of the Economic and Social Council (ECOSOC), who said the causes and prevention of poverty regularly coincided with the causes and prevention of violence and humanitarian emergencies.

Sustainable economic growth across the world - brought about through cooperation between States, the UN, the private sector and non-governmental organizations (NGOs) - was the key to conflict prevention, she said.

Ms. Rasi added that the private sector often contributed to conflict by exploiting natural resources in areas already facing tension. She cited a Council resolution last year banning the import of rough diamonds from Sierra Leone as an important step in linking business with conflict.

Many Council members offered their support to voluntary approaches, such as the Global Compact and the Kimberley Process - which has reduced the trade in "conflict diamonds" - and market mechanisms to encourage businesses to behave appropriately and not exploit the armed conflict.

South African Ambassador Dumisani S. Kumalo, Chairman of the Ad Hoc Advisory Group for African Countries emerging from Conflicts, said it was clear today that the private sector plays a central role in promoting development in States as they recover from conflicts and try to build peace.

Mr. Kumalo said the international community should assist the local private sector first as a confidence-building measure before foreign businesses would be prepared to step in.

He also stressed that the private sector would not invest or operate unless there was some semblance of peace initially in countries recovering from conflicts.

Echoing that remark, Heinrich von Pierer, President and Chief Executive Officer of the Siemens AG, told the Council that a reasonable level of security and basic law and order are essential if businesses are to invest in conflict-affected nations. He cited the current situation in Iraq as a good example.

Mr. von Pierer said it was important for people living in conflict-affected countries to see the positive impact the private sector could have on their lives. Building schools, improving health care and transferring technological know-how was crucial to achieving this, he added.

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