Speaking at the U.N. Human Rights Commission in Geneva, Annan said that the world body is failing to protect against human rights abuses, particularly in Sudan's conflict-ravaged Darfur region, and should be replaced by a council with greater authority.
"We have reached a point at which the commission's declining credibility has cast a shadow on the reputation of the United Nations system as a whole and where piecemeal reforms will not be enough," Annan told delegates.
"The commission's ability to perform its tasks has been overtaken by new needs and undermined by the politicization of its sessions and the selectivity of its work," Annan said.
As part of a package of reforms unveiled last month, the secretary-general proposed a human rights council to replace the present commission. The new council would be a permanent body, possibly on a par with the Security Council.
As a standing organ of the United Nations, the body would meet when necessary, addressing human rights violations as they arise. At present, the commission can only address issues during its annual six-week session.
Council members would be elected directly by the General Assembly by a two-thirds majority and fulfill specific human rights criteria, according to the proposed reforms.
Under U.N. rules, members of the commission have been picked by regional groups. Current member states that have been criticized themselves for abuses include China, Cuba, Nepal, Russia, Sudan and Zimbabwe. Several other countries with poor human rights records have been on the commission over the years, and Libya has even held the chair.
A number of countries have pushed for more stringent eligibility criteria for the panel. Two years ago, the United States walked out of the commission's meeting to protest Cuba's re-election, which it called "an outrage."
"The new human rights council must be a society of the committed. It must be more accountable and more representative," Annan said. "Ultimately it would produce more effective assistance and protections, and that is the yardstick by which we should be measured."
Annan singled out human rights abuses in Darfur, saying that the situation there is a test for the United Nations, "as individuals and as an institution."
Last year, the commission voted 50-1, with 2 abstentions, to express concern about the situation in Darfur, but stopped short of formal condemnation of Sudan. Even formal censure by the commission involves no penalties but draws attention to a country's record.
The United Nations has called the situation in Darfur — where two rebel groups made up of black tribesmen have been fighting against the government for two years, prompting a rampage by pro-government Arab militiamen accused of atrocities against civilians — as the world's worst humanitarian crisis.
An estimated 180,000 people have died in the upheaval and about 2 million others have been displaced since the conflict began in February 2003.