Apriadi Gunawan, The Jakarta Post, Medan

The European Union-sponsored Leuser Management Unit (UML), which handled a conservation project in the Leuser National Park in southeast Aceh, has been forced to fire its remaining 200 staff members due to its patron's decision to stop financial assistance at the end of this month for unspecified reasons.

Hardi Baktiantono, spokesman for UML, told The Jakarta Post here on Saturday that the dismissal was the second and last by the UML after the European Union decided to stop financial aid to the project, the contract of which does not expire until May 2002.

"UML will not provide severance pay for the 200 staff members because their employment was based on a labor contract. The contract between the EU and the Indonesian government is valid until May 2002 but the EU decided unilaterally to halt aid to the project ahead of schedule for efficiency reasons," he said.

He added that UML laid off 160 workers last year.

Hardi denied that the severing of EU assistance had anything to do with the project's failure to halt serious deterioration of the environment and deforestation in the park.

"The UML's dissolution and staff dismissal have nothing to do with forest deterioration in the national park," he said, pointing out that dismissals had been occurring since early 2000 when UML laid off a total of 160 people in phases.

The financing of the conservation project worth euro 50,500,000 was based on a contract between the EU and the government signed in 1995 that stipulated that the EU would grant euro 32,500,000 to the project and the government euro 18 million.

Hardi said that so far UML had spent Rp 91.5 billion, 87 percent of which was from the EU and the remaining 13 percent from the government.

"A bigger part of the funds were used to pay salaries," he said.

He declined to explain in detail the progress made by UML over the last six years.

Some 160,000 hectares of around 800,000 hectares of forest in the national park have been severely damaged due to rampant looting and illegal logging. Villagers and refugees have looted the forest and sold the logs to sawmills and timber companies in areas in North Sumatra near the national park.

"We have faced difficulty in curbing rampant forest looting because it has been supported by law enforcers and local officials," Hardi said, adding that UML's assets would be handed over to the local forestry ministry office.

He said that UML had reported 124 illegal logging cases to local authorities, but only four cases had gone to court.

Adil Sirait, a member of the North Sumatra provincial legislature's Commission II on forestry and environment, blamed UML for EU cutting off assistance.