Indonesia is home to 10 per cent of the world's remaining tropical rainforests, but officials estimate 10 million hectares have been lost to illegal logging.

Last month the Indonesian government announced a massive crackdown on illegal logging as part of a $1 billion deal with Norway to stop deforestation.

But with an estimated 40 to 55 per cent of Indonesia's timber illegally harvested, thousands of people are dependent on this industry for their income.

So a group in northern Sumatra is taking an innovative approach and retraining former illegal loggers to work as elephant keepers.

The Tangkahan elephant project is on the edge of the Gunung Leuser National Park, about 100 kilometres from Medan in northern Sumatra.

The project is mixing conservation with eco-tourism.

Foreign tourists who visit the site help wash elephants or can go on a four day patrol with the elephants to monitor the state of the forest and check for any illegal activity.

There are less than 3,000 Sumatran elephants left in the wild.

Whadi Azmi, the flora and fauna international manager for the Sumatran Elephant Program, says the biggest threat to the elephant is the loss of habitat.

"Many wild populations still remain but there's no more habitat because it's being converted into various agricultural land uses, for example palm oil on a big scale," he said.

The other big threat is what is known as human-elephant conflict.

Elephants are mostly seen by the locals as a pest and a threat, particularly when they destroy farm plots or devour palm oil seeds.

Some wild elephants are poisoned and others are captured and put into camps.

The seven elephants at the Tangkahan site have been rescued from these camps and are now used to generate an income as a tourist attraction.

Eco-tourism

Zoos Victoria is one of the international partners of the elephant conservation project in Tangkahan.

Zoos Victoria's conservation partnerships manager, Chris Banks, says eco-tourism is a good alternative to previous activities like illegal logging.

"And it's absolutely better for the elephants, it provides a far better quality of life than in the camps, they get stimulus, activity and better food and health," he said.

One of the elephant keepers - or Mahouts as they are called in Indonesia - is 30-year-old Rutkita Sembiring. He first began illegally harvesting timber from the nearby forest when he was 19.

Rutkita Sembiring says unlike large-scale illegal logging operations they only had a small team of eight people.

"We had to select the best log, predict the price, we preferred the logs closest to the river so it's easier to bring to the city to sell them," he said.

He says the threat of law enforcement and a growing concern for the forest helped change his mind about logging.

But when he switched jobs to look after elephants in 2002 he took a big pay cut.

He used to earn a $1,000 a month, now he is down to $130 a month.

"We got a lot of money but it was easy come, easy go and we don't feel as happy as we do working with the elephants and protecting the forest," he said.

In 2007 the United Nations Environmental Program estimated that 73 to 88 per cent of timber logged in Indonesia was illegally sourced.

Law enforcement has had some impact and that figure has dropped.

But a recent report by a environment groups in the United Sates, such as the BlueGreen Alliance and the Rainforest Action Network, estimate that about half of Indonesia's timber is still illegally sourced.

But Rutkita Sembiring says that for conservation efforts to succeed in Indonesia, the community has to be involved in the process.

"This is my homeland, I saw the future of keeping the forest safe but if the project did not involve the local community, it doesn't matter how much money you have or how many rangers you recruit to protect the forest it won't be a success," he said.

The Tangkahan elephant project will also have to show that besides generating an income from foreign tourists, the forest and elephants are being protected.

Zoos Victoria is currently reviewing its funding program while the Indonesian partners write up a new five year plan.

Jennifer Macey travelled to Indonesia as part of the Asia-Pacific Journalism Centre's Understanding Near Neighbours fellowship.