Oil revenues would be spent on humanitarian projects
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The creation of an "oil for food" programme has been proposed as a way of ending Sudan's conflict in Darfur by South African judge Richard Goldstone.
The former war crimes prosecutor said his proposal was a peaceful means to put pressure on the Sudan government.
He said it would enable China to continue buying oil, while supporting global efforts to end Darfur's crisis.
Meanwhile, UN investigators have called for a halt to the bombing of civilian targets and for militia to be disarmed.
More than 200,000 people have died in the four-year conflict and around two million have fled to refugee camps.
In a report to the UN Human Rights Council, the investigators recommended that Sudan implements a broad set of measures to improve the situation in Darfur.
Lessons
Mr Goldstone said under the proposed scheme, revenues from Sudan's oil exports could be spent only on development and humanitarian projects.
Lessons had been learned from the UN oil-for-food programme for Iraq, which was tainted by corruption, he said.
"Because an idea was flawed to an extent in its execution should not, in my view, be the basis for excluding it under all circumstances in the future," he told the BBC's Newshour programme.
He accused the authorities in Khartoum of flouting the wishes of the United Nations Security Council and frustrating the work of the International Criminal Court.
"Such a special oil fund would enable China to continue purchasing exactly the same amount of oil that they are now; and it may be a very useful way out for China to support the efforts by the international community to put pressure on the Sudanese government."
In the past, China has used the threat of its veto at the UN Security Council to block moves to impose sanctions on Sudan.
UK Prime Minister Tony Blair reiterated on Wednesday that the UK would table a UN Security Council resolution in two weeks if Sudan's government did not comply with its obligations on Darfur.
Positive
Meanwhile, the UN Human Rights Council gave its unanimous support to the report on human rights in Darfur and is expected to adopt it within a few days.
The BBC's Imogen Foulkes in Geneva, where the council is currently meeting, says Sudan has said it is ready to implement some of the recommendations.
African countries have blocked previous attempts to censure Sudan and for years the UN's human rights watchdog has wrestled with what to do about Darfur, our correspondent says.
Now there is a new approach, the UN's top human rights have drawn up a report which, while it acknowledges the ongoing violations taking place in Darfur, puts most weight on what Sudan must do to improve things: a set of over 30 recommendations and a strict timetable to implement them.
"We've seen time and time again that numerous condemnatory resolutions are passed and not much changes on the ground," says Peggy Hicks of Human Rights Watch.
"The advantage of this new approach is that it provides a roadmap for future action. It sets explicit targets and gives a timetable by which those indicators should be looked at again."
The recommendations include an immediate halt to the bombing of civilian targets, disarming the Janjaweed militia and bringing human rights violators to justice.
There are detailed indicators which UN human rights monitors will use to judge Sudan's compliance.