Environmentalists from a Green-peace ship have blockaded the biggest foreign timber project on Russian soil about 800 kilometers north of Vladivostock in the Par East, contending that the joint venture threatens the local woodlands.


The Korean industrial giant Hyundai, which has already invested $60 million in the logging company, Svetlaya, and plans to build a huge timber processing plant, says that Greenpeace has no idea what it is talking about and that the project has received scientific approval.


Located in the Bazharsk region near the port of Svetlaya, the joint venture has also been contending with a challenge from a local tribe of 700 people, the Udege, who want to protect their hunting grounds and may have joined forces with Greenpeace.


Lee Sei Hwan, managing director of Hyundai in Moscow, calls the dispute a "test case" for foreign investment in Russia. He said that unless the Russian government reacted firmly, other investors would be scared away.


The Greenpeace activists landed at Svetlaya on Wednesday, chaining their ship, the Rainbow Warrior 2, to a logging barge and locking the gates of the shipping terminal.


A Greenpeace statement late Thursday said that the authorities at Terney, 320 kilometers south, had threatened legal action. It said that as night fell activists and about 20 locals were sitting at the terminal gates in front of banners saying, "No logging. Save the tiger".


Hyundai says that the rights of the Udege have been the subject of a long-running political dispute between the governor of Promorsk and its regional soviet.


In justifying its actions. Greenpeace said that the Svetlaya project was endangering the habitat of at least 300 Siberian tigers living in the area and damaging the fishing industry. It said that oil spills from Hyundai machinery were polluting drinking water.


Greenpeace said that Svetlaya had broken an agreement only to cut dead and dying trees and that activists aboard Rainbow Warrior had witnessed systematic clearance of all trees in the logging area.


Greenpeace also contends that Hyundai is not benefitting the local economy, employs mostly Korean workers and sells the logs in Japan for 10 times what it paid for them.


Lee Sei Hwan rejects every one of the claims. "Greenpeace came to Svetlaya the day before yesterday. They simply have not had the time to see anything there. We are operating exactly according to the agreement", he said.


He said the Leningrad Forestry Institute had carried out a feasibility study in 1990, and the project had received approval from what was then the Soviet Union ministry of the environment.


He said Svetlaya did not clear-fell forest, but sorted timber carefully and replanted every area it cut. He added that the nearest Siberian tigers lived 1, 000 kilometers from the logging area.


He said Greenpeace's claim that Svetlaya did not pay for the timber it logged was nonsense and that the taxes imposed on the project have made it almost inviable.


Timber logs sell for anything from $20 to $70 per cubic meter depending on the quality. Lee Sei Hwan said Svet-laya paid a $3 entry fee per cubic meter. It also paid export duties, which range from 21 to 72 percent of the world price, and was forced to sell half of its dollar profits back into rubles.


Hyundai set up Svetlaya as a joint venture with the Soviet Ministry of Timber in August 1990.