* Court allows indigenous community to block road
* Rights groups welcome ruling but note limits
By Omar Mariluz and Mitra Taj
LIMA, Sept 26 (Reuters) - Peru's top court has affirmed the right of an Amazon indigenous community to block outsiders from entering its lands - a ruling that could foil resource extraction in tribal areas, experts said on Wednesday.
The ruling by the constitutional court in favor of the Tres Islas community sets a precedent for tribes trying to halt mining, logging or oil drilling on their lands.
"We think this will serve as an example for other indigenous groups to take their cases to the top court," said Jaime Tapullima Pashanase, president of the Kechwa peoples council. He called the ruling issued late Tuesday historic.
Tribes have long complained that existing law is contradictory, allowing private oil and mining firms to extract resources from tribal lands via government concessions. Tribes also say they have little recourse to defend their lands from informal wildcatters.
The ruling by the constitutional court takes a step toward clearing up the legal confusion by allowing tribes to assert their sovereignty in a jungle region brimming with hundreds of disputes over land and resources.
Though rights groups welcomed the ruling, they cautioned that it might not go so far as to limit activity by companies that have government concessions, nor help tribes that don't have title to their lands.
"The sentence said every right, even the right to property, has limits, and the state decides those limits. That's dangerous," said Javier La Rosa with the Legal Defense Institute in Lima. "Because of that, the state can suddenly say 'your land is part of a concession.'"
The Shipibo and Ese'Eja peoples who live in the Tres Islas community had complained that wildcatters were destroying their forests and streams. In its ruling, the court said they had the right to block a road that runs through their property to keep out informal miners and loggers.
Indigenous communities have been struggling to maintain autonomy in the Madre de Dios region. A third of indigenous territory in Madre de Dios has been destroyed by informal gold miners.
"I consider this ruling very important for indigenous communities. This is an advance in terms of the rights they have been demanding," Julio Ibanez Moreno, a lawyer for Aidesep, which represents tribes in the Amazon.
The ruling also highlighted the importance of a new law that requires the government to consult indigenous communities before making decisions that directly affect them and says that any government interference on indigenous land "must be duly justified."
The consultation law, which the administration of President Ollanta Humala is now putting into force, gives tribes more say over their lands but stops short of allowing them to veto government-approved extractive projects. It was drawn up in a bid to defuse hundreds of social conflicts that threaten to derail private investment projects worth billions.
"The consultation law was an important step towards realizing these rights, but it has been significantly weakened in its implementation," said Gregor MacLennan with the indigenous rights group Amazon Watch.