Updated

With Hawaii undergoing a building boom, big corporations such as Wal-Mart and Whole Foods Market are running into an obstacle almost as formidable as the environmentalists and the protectors of the islands' laid-back charm: the dead.

Construction projects keep unearthing graves 100 years old or more, leading to legal battles, costly delays and redesigns, reburials, and hurt feelings among some Native Hawaiians, who say the dead should be allowed to rest in peace.

"What if they built a Wal-Mart at Arlington? How would people feel?" Native Hawaiian activist William Aila asked. "Those individuals were buried there with the thought that they would be undisturbed for the rest of the eternity."

From remote sand dunes on Maui to bustling Waikiki, hundreds of sets of Hawaiian remains, or "iwi," are discovered every year. The graves — unmarked and undocumented — are considered sacred to the native people.

Companies say they are being culturally sensitive and abiding by state law while exercising their right to build on land they own.

Hawaii has a stringent state law protecting graves. The 1990 law prohibits removing, destroying or altering any burial sites except as permitted by the state and local burial councils. If a construction project encounters bones, the work must stop in the immediate area and authorities must be notified.

The latest dispute involves Texas-based Whole Foods, the nation's largest natural-foods grocer. Whole Foods has marketed itself as a socially responsible company that uses "sustainable and ethical business practices." Among other things, it refuses for humane reasons to sell live lobsters and crabs.

At least 50 sets of bones have been unearthed in urban Honolulu where Hawaii's first Whole Foods is being built along with an apartment house and small shops.

Construction on a small section of the Whole Foods venture has been prohibited since last summer, and mall developer General Growth Properties Inc. faces additional costs because of lawsuits and could be forced to redesign the $150 million project.

Dwight Yoshimura, General Growth's senior vice president, said "every letter of the law" has been followed. The Chicago-based company said many of the remains were discovered during an archaeological survey that it voluntarily commissioned at its own expense, even though it had already obtained all necessary building permits.

"We went ahead and tried to do the right thing," Yoshimura said.

The company wants the remains moved to three locations at the site. Some Native Hawaiians want the bones put back where they were.

The Oahu Island Burial Council decided last year that the first 11 sets of remains should be reburied elsewhere on the property. The fate of the 40 or so other sets of bones, which were discovered separately in recent months, will be determined by the State Historical Preservation Division.

Melanie Chinen, administrator of the division, said that when a dispute involves large concentrations of bones, the agency's preference is to leave them in place and require the project to be redesigned. The division has been involved in the reburial of about 3,000 sets of remains since 1991.

A Whole Foods spokeswoman did not return calls for comment.

The dispute follows an emotional confrontation on Wal-Mart's 10-acre property less than a half-mile away, where 64 sets of remains were found. After three years, they sit locked up in a trailer under a parking ramp, awaiting reburial.

The remains, some believed to belong to victims of an 1853 smallpox epidemic, were unearthed during construction of a Sam's Club and Wal-Mart superstore. The superstore opened in 2004, with protesters waving signs accusing the world's largest retailer of destroying graves.

Paulette Kaleikini, a descendant of the deceased at both the Wal-Mart and Whole Foods sites, said: "Why should they be removed to accommodate development? They were there first. If these burials were of Western people, would they move them?"

Aila, a member of an organization whose Hawaiian name translates to Group Caring for the Ancestors of Hawaii, said Wal-Mart could have redesigned the store and chose not to, which was a "demonstration of disrespect."

Wal-Mart spokeswoman Tiffany Moffatt said the company "took the necessary steps and incurred the necessary costs" to "ensure the remains were treated in accordance with state law in a culturally sensitive and appropriate manner."

Among other things, construction was suspended briefly in some spots, and Wal-Mart hired a consultant to work with the descendants. The company also faced legal battles, including a lawsuit to prevent the remains from being moved. A judge rejected the request.

After the bones were discovered during construction, Wal-Mart stopped work and brought in archaeologists, as required under law. The remains are in storage because they are evidence in the state's case against the archaeologists, who are challenging a $210,000 fine over allegations of desecration and failure to immediately notify authorities.

A hearing in the case against the archaeologists is set for next month. Wal-Mart said it is not involved in the case and is awaiting state approval to rebury the remains.

Hawaii's building boom is transforming Honolulu's skyline and turning barren, ink-black lava fields on the Big Island into luxury neighborhoods. Construction spending is projected to reach nearly $7 billion this year, the eighth straight year of growth.

Some developers have redesigned their projects to preserve native graves.

The Ritz-Carlton Hotel on Maui, where 1,000 graves dating to the year 850 were unearthed during excavation in the late 1980s, was completely redesigned at a cost of millions and moved inland. The remains were preserved in a spot now registered as a state historic place, with signs informing visitors about its cultural significance.

More recently, Fifield Cos. agreed to relocate the parking garage and make other changes in a $300 million Waikiki condo project now under construction.