Editor's Note: CIRI (Cook Inlet Region, Inc.) is an Alaska Native corporation. It is one of 12 Alaska-based regional corporations established by the Alaska Native Claims Settlement Act of 1971 that benefits Alaska Natives who had ties to the Cook Inlet region. The Company is owned by more than 7,300 Alaska Native shareholders of Athabascan and Southeast Indian, Inupiat, Yup'ik, Alutiiq and Aleut descent. It is based in Anchorage and has interests across Alaska, the United States and abroad. CIRI also created a family of nonprofit service organizations that provide needed health care, housing, employment, education and other social and cultural enrichment services for Alaska Natives and others.
The Alaska Native Claims Settlement Act of 1971 (ANCSA or Act) has been a guiding light in my life since its passage. As a young adult I made the decision to become a CIRI (Cook Inlet Region, Inc.) shareholder. Not long after, I accepted employment at the company. Over the course of my career I have worked on and directed many large, even momentous, land ownership and development issues. Today I am honored to serve as president and chief executive officer of CIRI, a corporation that for years has generously provided significant dividends to its shareholders and has played a key role in the history of the young state of Alaska.
It is no exaggeration to use the word "momentous" to describe the Alaska land debates and transactions that took place in the 1960s and 1970s. We were literally carving up the state's 375 million acres, making decisions that would affect all Alaskans for decades to come. Had we been more experienced in the ways of national policies at the time, I am sure we never would have undertaken such a daunting task. And had we waited even a decade to take up the venture, I am sure it would have been impossible.
ANCSA started as land struggle between the competing agendas and viewpoints of members of Congress, misaligned state, federal and private interests, and the rights and needs of Alaska Native people. Alaska Native interests were championed by a brilliant and brash group of young Alaska Native leaders who put the hearts and souls of their people first. The effort started after Alaska Native people began to realize the devastating impact the state's land selection of more than 100 million acres under the Statehood Act would have on their land rights. Settling the land claims issue grew into a national priority after oil was discovered at Prudhoe Bay and developers needed to build the 800-mile-long Trans Alaska Pipeline System through the rugged heart of Alaska. These historic events and others provided the unique convergence of circumstances that enabled ANCSA's passage. As a result, the indigenous people of Alaska retained 44 million acres of land and were granted a cash payment of $1 billion.
To understand ANCSA and its aspirations it is important to understand Alaska Natives' social and economic situation before ANCSA.
- In 1966, the life expectancy at birth of Alaska Natives was 34.5 years, less than half the national average of 70.5 and shorter than that of the residents of such underdeveloped countries as India and Turkey. Native infant mortality was 52.5 per 1,000, more than twice the national average. Alaska Natives had the highest rate of new active tuberculosis cases in the United States, almost 20 times more than the national average. The median Alaska Native family income was below $2,000, less than half that of African-Americans and about one-quarter that of whites. This statistic understates the extent of Alaska Native poverty because rural Alaska prices were the highest in the country. (Cliff Groh thesis, 1976, page 16.)
- "We have about 55,000 Natives in Alaska who live in scattered villages through Alaska's 586,400 square miles. About 70 percent of the Native population lives in about 178 villages. We have a subsistence economy of hunting and fishing supplemented by cash incomes earned on various jobs during the short summer season. Seven out of 10 adult Natives have only an elementary education. We have a rapid rate of increase, 29 per 1,000, which is twice that of the United States. The median Native age is 16.3 and 80 percent are less than 35 years of age. The median family size is 5.3. One-half the Native work force of 16,000 to 17,000 is jobless most of the year. The death rate is twice that of white Alaskans; 9.6 deaths per 1,000. The cost of goods in remote parts of Alaska is 74 percent above Seattle costs. Most Alaskan Native families earn less than $2,000 annually, cash." (Willie Hensley, testimony. Hearings before the Committee on Interior and Insular Affairs, U.S. Senate, on S. 2906, S. 1964, S. 2690, S. 2020 and S. 3586, July 12, 1968, Washington, D.C., Part 2, page 561.)
In other words, Alaska Natives were generally disenfranchised, disrespected, sidelined and often poverty stricken before ANCSA passed. During hearings on the Act in 1968, then-Alaska Attorney General John Rader testified that witnesses who compared living conditions in many Alaska villages to conditions in Appalachia did not take the analogy far enough.
"I noticed that they said in the Appalachia testimony -- they said that the lack of adequate sewage treatment facilities turned some of the great assets of Appalachia into liabilities. The streams were polluted and so on and so forth. I was talking to a VISTA worker the other day and he said they did not have toilets, sewers or even outhouses. The only trouble with the Appalachia comparison is that it is so mild," Rader said.
ANCSA has been called a national experiment on a truly grand scale. It is an experiment that uses capitalism and business models to mold the federal government's relationship with Alaska's indigenous peoples. It emerged because Alaska Native and Congressional leaders were united in their rejection of ideas that required the creation of reservations or sustained government oversight, intervention and resource allocation in satisfying Alaska Native claims.
ANCSA drafters settled on a capitalist solution because they thought it provided the most pragmatic solution for meeting all of ANCSA stakeholders' needs. There was some early discussion using a cooperative model, but capitalism ultimately made more sense because it was thought to be sustainable. Government grants, allocations and handouts are not sustainable because they generally fail to incentivize permanent solutions and they depend upon political will that can change with each election cycle. The capitalist business model, on the other hand, offers opportunities for development and increasing value for all stakeholders in the form of jobs, dividends and economic growth.
The ANCSA drafters are not alone in their view that capitalism is the best way to ensure social and economic justice. The distinguished and talented economist, Hernando de Soto, president of the Institute for Liberty and Democracy in Peru and author of The Mystery of Capital, wrote of capitalism: "I am not a die-hard capitalist. I do not view capitalism as credo." But, he continued, to achieve the goals of respect for the social contract and equal opportunity, ". . . capitalism is the only game in town. It is the only system we know that provides us with the tools required to create massive surplus value."
Capitalism as it is imbedded in ANCSA through the establishment of for-profit Alaska Native corporations offers self-determination to Alaska Native people who wanted -- and got -- a model of sustainability. And those who would suggest that ANCSA was wrong-headed or somehow not in tune with traditional indigenous values are making generalized statements without evidence.
We are fast approaching the 40th anniversary of the passage of the Act. This milestone surely will mean more opinions on the effects of ANCSA will be forthcoming, including some who suggest that the corporate model somehow precludes or prevents corporate emphasis on Alaska Native traditions and spiritual values. It is certainly a decision at the regional and village level how much emphasis Alaska Native corporations place on values beyond the bottom line, but I submit that no Alaska Native corporation focuses solely on the amount of profit. In fact, some corporations focus a huge portion of their attention on Alaska Native values.
CIRI, for example, has given millions of dollars to create, initially fund and support a family of nonprofit service providers that serve CIRI shareholders', descendants' and other Alaska Natives' social, educational, healthcare and cultural needs. These nonprofits provide needed services and education programs that reflect traditional Alaska Native values. They also help strengthen families and communities and provide direct or indirect benefits to virtually every Alaskan. And that is just the tip of the iceberg. NANA Regional Corp. uses 17 Inupiaq values identified by elders from the NANA region into its daily corporate business decisions. The values of whaling are part of the corporate conscience of Arctic Slope Regional Corp. And the indigenous value of sharing is enshrined in ANCSA's resource-revenue sharing requirement through which hundreds of millions of dollars have been shared among the corporations over the history of the Act.
What is really noteworthy about ANCSA, however, is that it has turned the traditional Alaska business model on its head. Ever since Alaska was first colonized by Russians, the model has been for outsiders to exploit Alaska's resources and export their profits out of the state. This has been the case with the fur trade, gold mining and most recently the oil industry. This model is not sustainable, and when the profits play out the outsiders generally leave and take their revenue with them. With Alaska Native corporations, however, the model is reversed. Alaska Native corporations are doing business in Alaska, throughout the United States and, in some cases, around the world. And they bring the profits from Outside back to their Alaska headquarters and use them to create Alaska jobs and pay dividends to Alaska Native shareholders, most of whom live in Alaska.
Consequently, ANCSA has had the effect of creating wealth that stays in Alaska, benefiting virtually every Alaskan. It has also enabled a diversification of Alaska's economy that would have otherwise been impossible. Michael J. Burns, executive director of the Alaska Permanent Fund, said Alaska Native corporations, "absolutely control the economic destiny of this state."
There are legitimate points of view of ANCSA that differ from mine that are often voiced when discussing potential resource development. I am not talking about sometimes impassioned debates over whether a particular plan is reasonable and safe for people and the environment. Those sorts of arguments and discussions are appropriate and necessary to ensure that development truly is undertaken in a responsible manner.
ANCSA ensured that Alaska Natives, collectively through their respective Alaska Native corporations, own valuable and significant properties throughout Alaska. Some of these lands are sacred, and some are important for subsistence plants and animals. Truly, some of our lands will never be used for economic development. But decisions as to which lands will be preserved and which will be considered for development is our decision, to be made in a collective manner through the boards of directors of each corporation that are elected by Alaska Native shareholders.
Alaska Native people are not only wise to develop some of our lands, we are the best suited to make decisions about how and when any development should take place. Alaska Natives have traditionally made major decisions based upon what is best for the entire group, not for particular individuals. Collective decision-making has existed for the thousands of years that indigenous people have thrived in Alaska. Our corporations today follow similar multi-generational tenets to make decisions, including decisions about developing land in Alaska and their home regions.
I have been involved in the Alaska Native Claims Settlement Act for more than 35 years. During this time my ideas about the Act and its importance to Alaska have matured as I have matured. I believe more than ever that Alaska Native corporations play an indispensable role in building a sustainable state economy. I am comfortable with the idea that other types of organizations outside of ANCSA are important to improving Alaska's Native peoples' lives. But I fundamentally disagree with any notion that ANCSA and the corporate model it entails are a mismatch for Alaska's indigenous people.
Earlier in my career at CIRI and while I was in the position of heading up CIRI's land and resources department, I was visited by two representatives from the Navajo Nation. As our meeting progressed, I came to learn that the visit to CIRI offices was for the express purpose of learning how the corporate model was working for CIRI. The Navajo representatives wanted to explore how the Navajo Nation could set up its own for-profit corporation for the purpose of more actively participating in oil and gas development that was occurring on the Navajo Reservation.
I frequently think about this meeting and its purpose. Here were representatives of the great Navajo Nation, a nation with so many attributes that Alaska Native people envy: sovereignty, a tribal constitution and tribal judicial system, to name three. Yet what the Navaho Nation was seeking was to establish a for-profit corporation to enhance its peoples' ability to exercise self-determination. It took many years, but that corporation is now operating as the Navajo Nation Oil and Gas Co.
At its heart, ANCSA is about creating opportunities, not entitlements. ANCSA is government's best attempt to provide Alaska Native people, both original shareholders and their descendents, with opportunities to thrive and succeed in life by using their hard work, intelligence and good luck. ANCSA created Alaska Native corporations so they could stand on their own and empower their shareholders with participation in the state and national economy by doing business, generating jobs, earning profits and distributing appropriate dividends, all the while taking into account Alaska Native values and balancing the needs of current and future shareholders. It is a complex task. But if we succeed, Alaska Native corporations will have a positive influence on Alaska's economic and social development for generations.