Stephen Coates, Jakarta – The Indonesian military's links to human rights abuses while helping foreign mining firms are being exposed in a lawsuit by local villagers against US energy giant ExxonMobil, analysts said Thursday.

A US federal court judge ruled Wednesday that ExxonMobil had a case to answer in the suit over alleged killings and torture by Indonesian troops protecting the company's gas project in resource-rich Aceh province.

The ruling means the suit filed by 11 anonymous villagers in 2001 should go to trial, turning an unprecedented legal spotlight on arrangements between foreign miners and the army, which has long been linked to rights abuses.

"This decision is acknowledging what is common sense to many – if you are paying government militia to do your dirty work then you are responsible for their conduct," said Australia-based Mineral Policy Institute director Techa Beaumont.

The case had major implications for Australian and US companies working in sensitive Indonesian areas, such as American firm Freeport's mine in Papua, Beaumont said.

Such operations "would be advised to reconsider their positions that payment to sections of the Indonesian military linked to extrajudicial killings, murder and torture of Papuan citizens is an acceptable business practice," Beaumont said.

The suit accuses Exxon Mobil Corporation, two of its US affiliates and its Indonesian subsidiary, ExxonMobil Oil Indonesia (EMOI), of "killings and torture committed by military security forces protecting and paid for by EMOI," according to a court document.

The villagers say that Exxon's Indonesian subsidiary was complicit in torture, rape and at least two murders by soldiers.

Judge Louis Oberdorfer ruled that the plaintiffs had provided "sufficient evidence, at this stage, for their allegations of serious abuse."

He rejected a request by Exxon Mobil Corp. and EMOI to throw out the case, but dismissed a suit against the group's two US affiliates, Mobil Corp. and ExxonMobil Oil Corp.

Indonesian armed forces chief General Djoko Santoso said Thursday he was not aware that the case was before the courts.

"It's impossible. The TNI (military) has never received funds from Exxon," he told reporters. "Just go ahead (and sue). The one who will be sued is Exxon, right?"

Defence Minister Juwono Sudarsono said government policy was for foreign companies to repay military protection of "vital assets" by channelling funds through civilian government bodies.

"In the case of Exxon, the money must go through (oil regulator) BP Migas or (state oil monopoly) Pertamina," he said.

Aceh, on the northern tip of Sumatra island, suffered nearly three decades of conflict before the government signed a peace pact with separatist rebels in 2005.

Australian political scientist Damien Kingsbury, who helped negotiate the Aceh peace deal, described the US court's ruling as "very significant."

"It's obviously a significant step toward addressing the human rights agenda in Indonesia and the culpability of the Indonesian military over a long period of time, and its immunity from prosecution," he told AFP.

"The second thing is that it may have a deterrent effect on investors because a lot of large investors have had a very cosy relationship with the TNI (military) and police in ways that have implicated them in significant crimes."

ExxonMobil representatives in Indonesia were not available for comment but the company has argued that the lawsuit sets a dangerous precedent for US firms overseas.

A spokeswoman said in 2006 that the villagers' suit "created the potential for any US company operating overseas to be held vicariously liable for host government actions."

Analysts said the court's ruling would also have implications for US-based Freeport McMoRan, which has a massive gold and copper concession in restive Papua province, where separatist tensions are simmering.

Freeport, which was unavailable for comment on Thursday, said in its latest annual report that it had paid nine million dollars in "support costs" to the Indonesian military and police in 2007 to protect its operations.