ANCSA creates sustainable business opportunities for Alaska

ANCSA creates sustainable business opportunities for Alaska

by: Margie Brown, CIRI president and CEO

We are fast approaching the 50th anniversary of Alaska statehood that happened on Jan. 3, 1959. Alaskans are readying themselves for that celebration and the media are starting to publish stories and retrospectives that commemorate and reflect upon key moments in the last half-century of Alaska history.

I have had the pleasure of discussing Alaska history with several journalists and television and movie producers who are composing various Alaskan retrospectives. Our conversations invariably turn to the Alaska Native Claims Settlement Act (ANCSA) and its impact on Alaska.

I believe the implementation of ANCSA is the most important episode in Alaska history since statehood. In fact, I believe it to be an even more important development than the discovery of North America’s largest oil field at Prudhoe Bay in 1967.

Discovery of oil at Prudhoe Bay no doubt was a watershed moment in the history of this state. Untold economic and social developments in Alaska can be traced directly to production of oil. The oil discovery even acted as a catalyst to ANCSA’s passage by Congress in 1971 because oil interests feared that Alaska Native land claims would delay the granting of Trans- Alaska Pipeline System right-of-way and other oil development.

ANCSA, at its passage, may have not seemed as huge an event as the discovery of oil at Prudhoe Bay, except to those early Alaska Native leaders who worked so hard to achieve the settlement. The Act is the largest land claim settlement in U.S. history, but it is much more than a simple payout to settle aboriginal land claims. It was the framework for a great social experiment that will, when fully implemented, help sustain Alaska Native culture and promote economic development that will benefit all Alaskans for generations.

At its heart, ANCSA is about creating opportunities, not entitlements. Aboriginal land claims revolve around culture, lifestyles and what people can do when they have access to land and resources. Consequently, ANCSA compensates Alaska Natives for the opportunities they lost after the United States purchased Alaska from the Russian Empire in 1867. It is not an agreement to compensate a particular group of Alaska Native “land owners” for property that they gave up. It is not a guarantee that every Alaska Native person will get to live a traditional lifestyle. It is not an entitlement program.

Instead, ANCSA is government’s best attempt to give Alaska Native people, both original shareholders and their descendants, opportunities to thrive by using their hard work, intelligence and good luck to succeed in life. ANCSA created Alaska Native corporations (ANCs) so that these corporations could stand on their own to empower their shareholders with the ultimate goal to create opportunities for Alaska Native people and their descendants by doing business, generating jobs, earning profits and distributing an appropriate level of dividends that balance the current needs of shareholders with the need to conserve capital for future growth and dividends.

What is perhaps an even more compelling result of ANCSA is that the ANCs have flourished so dramatically in the Alaska and U.S. business markets, that they have also provided tremendous benefit to the state. ANCs have grown and become the largest Alaska-owned businesses. Seven of the top 10 Alaska-owned businesses in 2007 were ANCs. Alaska Native-owned companies have expanded into virtually every line of business in the state. They also do significant business outside of Alaska, both in the other 49 states and around the world.

ANCs are changing the traditional Alaska business model whereby Outside entities, from trappers to miners, fishers, loggers and oil companies, come to Alaska to extract resources, then take their profits home. ANCs have reversed the flow of wealth out of Alaska by going Outside to do business and then bringing revenues and profits into the state to pay salaries and dividends to workers and shareholders who live in Alaska. This is a sustainable business model that should benefit Alaska Native people and all Alaskans long after our state’s oil and gas reserves are gone.

There is little doubt that when Alaska approaches its centennial 50 years from now, historians will talk about oil’s huge impact on the state. But, just like the discovery of gold 100 years ago, oil’s importance to the state will fade as our Alaska oil reserves decline. By sharp contrast, ANCSA and the ANCs have the potential to influence Alaska’s economic and social development for generations.