Exxon Mobil Corp warned that a US judge's decision to allow villagers to file a lawsuit against the oil giant for alleged abuses by Indonesian troops in Aceh Province could set a precedent for all US companies operating abroad.
But the Irving, Texas-based company has not yet decided whether it will appeal the ruling, spokeswoman Susan Reeves said yesterday in a telephone interview.
The International Labor Rights Fund filed a lawsuit in 2001 on behalf of 11 Acehnese villagers who said Exxon's Indonesian subsidiary allowed its facilities to be used by soldiers to torture locals and to commit other human-rights abuses.
The hearings were postponed in 2002 after the State Department said the lawsuit could harm US interests, but US District Judge Louis Oberdorfer ruled last week the case could proceed.
"The lawsuit created the potential for any US company operating overseas to be held vicariously liable for host government actions," Reeves said. "Such action would risk interference with US foreign relations and diplomacy."
Aceh, a province of 4 million people on the northern tip of Sumatra island, has seen a series of guerrilla wars since the Dutch occupied it in the 1870s.
The latest round of fighting, which broke out in 1976 when insurgents picked up arms to carve out an independent state, claimed 15,000 lives before it ended with the signing of a peace agreement last year.
Exxon's has previously said the military deployed four infantry battalions and an armored cavalry unit during the conflict to protect a natural gas field and pipeline operated by the company on behalf of Indonesia's state-run Pertamina energy conglomerate.
Human rights groups applauded Oberdorfer's ruling yesterday, saying Exxon should be held responsible for crimes carried out by soldiers and police on its property.
"The Acehnese have every right to file a lawsuit," said Yusuf Pase, a prominent lawyer and rights activist.
Sofyan Dawood, a former spokesman for the Rebel Free Aceh Movement, said Exxon is "part of the problem" in Aceh.
"It even provided places in which torture and violence against civilians took place," he said.
Exxon's troubles are the latest example of the challenges US firms have faced in recent years when operating in Indonesia.
Freeport-McMoRan Copper & Gold Inc was forced to temporarily shut its mine in Papua province last month after protesters blockaded a road, demanding they be allowed to sift through the mine's waste ore.
And the American director of Newmont Mining Corp's local subsidiary faces a possible 10-year prison sentence for allegedly allowing the company to dump arsenic and other heavy metals into a bay on Sulawesi Island.
Separately, the Denver-based company agreed last month to pay US$30 million in an out-of-court settlement to fund environmental monitoring and community development around its massive gold mine.
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