Human Rights Watch (HRW) condemned US government attempts to scupper a human rights lawsuit brought by a group of Indonesian villagers against oil giant Exxon Mobil.

"Corporate responsibility shouldn't stop at the water's edge," HRW executive director Kenneth Roth said in a statement. "If the administration is serious about promoting ethical business practices, it shouldn't be trying to stop this court case from going forward."

Villagers from the violence-torn Aceh region claim Indonesian security forces bankrolled by Exxon Mobil to protect their gasfields had committed human rights violations against local people.

The US State Department told the federal court hearing the case that the lawsuit risked a "potentially serious adverse impact" on US interests, including "the on-going struggle against international terrorism" and "US firms bidding on contracts in extractives and other industries."

The lawsuit was filed under the Alien Tort Statute, under which alleged victims of human rights abuses, perpetrated in other countries, can file in US courts. Former US Deputy Assistant Secretary of State for Democracy, Human Rights and Labor Bennett Freeman called the State Department intervention "a shot across the bow" for those that want to use the statute "as a battering ram" against companies on human rights issues.

"Its hard to deny that this isn't another set back for corporate social responsibility and human rights in the extractive sector, and a big win for Exxon Mobil," said Freeman.