In many ways the ANCSA settlement was quite straightforward. However, three special features of ANCSA were highly unconventional, with potentially serious implications for the success of the regional corporations. First, shareholders could not sell their stock for at least 20 years. This prohibition removed the threat of takeover as a powerful discipline mechanism and eliminated the actual takeover as a corrective mechanism. With no takeover threat and no information feedback from a market in shares, there was little monitoring of corporate activities and little information about their performance made available to the general public. This provision was partially ameliorated and partially strengthened by a 1988 Congressional amendment to ANCSA, which allowed corporations to restrict their sale of stock and also granted them the ability to enroll Native Alaskans born after the settlement date. Second, the requirement that regional corporations share 70% of the "net revenue" from subsurface and timber resource sales with all other corporations, both regional and village, created incentives to shelter resource revenues. The provision was also poorly drafted and invited costly litigation during implementation. Third, corporate management, as opposed to individual shareholders, was given complete control over the land. This tied the security of the land base to the control of the Board of Directors and ultimately to the voting power of the stock. Under this structure, allowing stock sales would increase the incentives for individual Native Alaskans to sell out. Fearing this outcome, few would vote to allow stock sales.
ANCSA specified that the settlement was to address the "real social and economic needs" of Native Alaskans. Yet several factors militated against corporate success and the alleviation of these needs. First, most Native Alaskans were poor and had few liquid assets, creating pressure for early dividends. Second, the lack of human capital meant that internal management talent was scarce and the corporate boards' monitoring ability was low. Third, most Native Alaskans lived on the economic periphery of a peripheral state and there were few apparent opportunities for business development in the regions. And fourth, corporations were caught between the obligation to be financially profitable and the need to create jobs and other social benefits for their shareholders. Often a particular investment or business enterprise could not do both.
Countering these pessimistic conditions was Alaska's new-found oil wealth. The Trans-Alaska Pipeline System (TAPS) was finally approved in 1973 after the first OPEC oil shock. The resulting increase in oil prices fueled a speculative resource exploration boom throughout the state just as the Native corporations began to select their lands. Also of great importance was the continuing flow of federal money from the rest of the United States. Alaska Natives retained their specific eligibility for federal Indian programs, and their status as US citizens gave them access to all the social programs and infrastructure subsidies of the nation. This favorable economic climate allowed the ANCSA corporations substantial freedom to concentrate on profitable investments without facing overwhelming pressure for immediate distribution of wealth.
Economic performance of the regional corporations has been mixed. The first two decades of the settlement were financially hard on most, but not all, of the regional corporations, especially those in more remote and rural parts of the state. During this period, many corporations were losing money rapidly and some came close to bankruptcy. Part of the difficulty was that corporations were obliged to meet both the social and economic needs of their shareholders. Some corporations claimed to provide employment for their shareholders in lieu of corporate profits, while some corporations only survived financially in the mid-1980s by selling their net operating losses to other, non-Alaskan corporations, under a special federal provision. In the past decade, ANSCA corporations have performed more successfully, with total corporate assets (all corporations as a whole) exceeding $2.5 billion. Total corporate profits have fluctuated widely, ranging between $50 million and $450 million in recent years, though much of this income is accounted for by just one corporation, CIRI, in the Anchorage area. Return on equity for corporations overall averaged 11% in the past decade.
Two issues related to ANCSA remain unresolved. The first is subsistence, as Native Alaskans must decide on whether they prefer federal or state management of subsistence lands beyond their own settlement lands. The second is sovereignty, a potentially more complex issue as tribal council governments seek control over ANCSA corporation lands. Overall, ANCSA substantially changed the lives of Native Alaskans. The Act extinguished existing indigenous title to land, transferred 44 million acres of fee simple lands to Native Alaskans (about 12% of Alaska lands), and provided initial investment capital for 12 regional corporations. The Act also helped to bring Native Alaskans into the American mainstream and provided a model and inspiration for other indigenous land claim settlements.
See also Alaska; Alaska Federation of Natives (AFN); Alaska National Interest Lands Conservation Act (ANILCA); Alaska Treaty (Convention for the Cession of the Russian Possessions in North America to the United States); Land Claims; Prud-hoe Bay; Trans-Alaska Pipeline
Alaska Native Claims Settlement Act Resource Center website: http://www.lbblawyers.com/ancsa.htm
ANCSA at 30 website: http://litsite.alaska.edu/uaa/aktradi-tions/ancsa/
Berardi, Gigi, "Natural resource policy, unforgiving geographies, and persistent poverty in Alaska Native villages." Natural Resources Journal, 38(4) (1998): 85-108
Flanders, Nicholas E., "The ANCSA amendments of 1987 and land management in Alaska." Polar Record, 25(155) (1989): 315-322
McNabb, Steven, "Native claims in Alaska: a twenty-year review." Etudes/Inuit/Studies, 16(1-2) (1992): 85-95 Morehouse, Thomas A., The Alaska Native Claims Settlement Act, 1991, and Tribal Government, ISER Occasional Papers No. 19, Institute of Social and Economic Research, University of Alaska Anchorage, Anchorage, AK, 1988 Robinson, Michael, Michael Pretes & Wanda Wuttunee, "Investment strategies for Northern cash windfalls: learning from the Alaskan experience." Arctic, 42(3) (1989): 265-276
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