Legal, Financial & Reputational Risks in a Post-Compliance Era
Recent federal policy changes have allowed certain projects to bypass Section 106 cultural reviews, creating the illusion that cultural resource due diligence is no longer necessary. However, this regulatory loophole does not protect developers from serious risks — risks that extend far beyond compliance and into the realms of lawsuits, financing obstacles, and reputational damage.
At Chronicle Heritage, we know that responsible development is about balance — protecting tribal heritage and historic resources, while also ensuring projects come online on time and within budget. As a collaborative cultural resource management (CRM) firm, we partner with developers, agencies, and tribal nations to navigate this delicate balance — helping projects move forward smoothly and sustainably, without unnecessary legal, financial, or reputational risk.
Waiving Section 106 Does Not Eliminate Legal Exposure
Section 106 of the National Historic Preservation Act (NHPA) requires federal agencies to assess cultural impacts before approving projects. When emergencies or certain policies waive this requirement, developers may feel they’ve cleared a bureaucratic hurdle — but the reality is much more complex.
Even if compliance with federal law is waived, tribal nations, cultural preservation organizations, and environmental advocacy groups still have legal standing to challenge projects through:
- The National Environmental Policy Act (NEPA)
- Tribal religious freedom and cultural protection laws
- State and local cultural heritage regulations
- State burial laws
- Civil litigation for failure to consult or mitigate impacts
Legal Case Study: Dakota Access Pipeline (DAPL) – A Costly Lesson
The Dakota Access Pipeline serves as a cautionary tale for developers who sidestep cultural consultation and due diligence. Inadequate engagement with the Standing Rock Sioux Tribe led to:
- Court-ordered environmental and cultural reviews after construction was already underway
- Multi-year legal entanglements and costly litigation
- Widespread protests that attracted global attention
- Reputational damage that triggered divestment from major financial institutions
The DAPL case is a reminder that skipping cultural resource management doesn’t save time or money — it multiplies risk. You can read more about the legal battle here:
👉 Learn more about the DAPL case
The Risk of Eroding Hard-Earned Goodwill with Tribal and Local Communities
For decades, responsible developers and agencies have worked to build trust and goodwill with tribal nations, local communities, and preservation advocates. This trust — earned through meaningful consultation, transparency, and a demonstrated respect for cultural resources — has allowed many projects to move forward more efficiently, with fewer permitting delays and stronger community support.
However, when developers choose to exploit policy waivers to bypass cultural reviews, they risk undoing years of progress. It sends a clear signal to these communities: their voices no longer matter. The result?
- Increased opposition to current and future projects.
- Longer permitting timelines due to heightened scrutiny.
- Strained relationships that complicate voluntary agreements, land access, and future collaboration.
- A reputation for cutting corners — damaging future credibility with both communities and regulators.
Skipping Cultural Reviews Damages Public Trust
Even if a project clears regulatory hurdles, public and stakeholder trust is fragile. Communities, advocacy groups, and tribal governments expect transparency and respect, especially when projects impact culturally sensitive lands.
By skipping cultural reviews, developers create a public perception of disrespect and secrecy — fueling protests, boycotts, negative media coverage, and delays. Public relations teams cannot undo this type of reputational damage once it takes root.
The Financial Risk: What Developers & Investors Overlook
The risk calculus doesn’t stop at legal and reputational fallout. Many developers underestimate the direct financial consequences of ignoring cultural due diligence — particularly when it comes to securing project financing.
Enter the Equator Principles — The Global Financing Standard You Can’t Afford to Ignore
The Equator Principles (EPs) are a global risk management framework adopted by over 130 financial institutions across 38 countries, representing the majority of large-scale project financing worldwide.
Under Principle 8, projects must assess and mitigate cultural heritage risks, regardless of local or national regulatory requirements. In other words, even if Section 106 is waived in the U.S., projects seeking financing from EP-compliant institutions still need to conduct cultural assessments — or risk:
- Financing delays or outright denials
- Higher risk ratings and increased borrowing costs
- Mandatory third-party cultural reviews (often on compressed timelines and at higher cost)
- ESG downgrades that make projects less attractive to sustainability-focused investors
Investors Are Watching — Cultural Preservation is Part of ESG
Beyond the Equator Principles, cultural due diligence has become a core pillar of the “S” in ESG (Environmental, Social, and Governance) performance. Investors, corporate partners and institutional lenders often expect developers to show how they are safeguarding cultural heritage as part of responsible project development.
Ignoring cultural resource management can increase project risk by:
- Reducing access to sustainability-linked financing
- Triggering activist investor scrutiny
- Imperiling future project bids and partnerships — especially with ESG-conscious corporations and agencies
Chronicle Heritage: Your Partner in Balancing Protection and Progress
At Chronicle Heritage, we take a collaborative approach that is built on the belief that project success and cultural protection can and should align — and that responsible development strengthens rather than weakens relationships with tribal nations, communities, and investors.
We partner with developers to:
- Conduct preemptive cultural assessments — identifying risks early, when mitigation is most effective.
- Lead tribal and community engagement — fostering transparency and long-term goodwill.
- Deliver financing-ready due diligence — ensuring cultural reviews meet the standards of Equator Principles and ESG requirements.
- Build legally defensible records — creating thorough documentation to protect against future litigation.
- Develop balanced compliance strategies — helping clients meet cultural, regulatory, financial, and community expectations simultaneously.
Moving Forward — Together
Chronicle Heritage, as the premier cultural resources consulting firm is a bridge between progress and preservation, helping projects move forward on time, within budget, and with lasting trust intact. By working with us, developers don’t just reduce risk — they build a reputation for responsible leadership that pays dividends long after a project breaks ground.
Reach out to us today to learn how we can help your project succeed — with both cultural respect and business success in mind: https://www.chronicleheritage.com/contact/.
If you prefer, you can also email us at info@chronicleheritage.com or call us at 866.563.2536.
Photo courtesy of Fibonacci Blue