(Published in Natural Resources Journal  38(1): 85-108, 1998)
  

  NATURAL RESOURCE POLICY, UNFORGIVING GEOGRAPHIES,
AND PERSISTENT POVERTY IN ALASKA NATIVE VILLAGES

INTRODUCTION

 

      Despite decades of programs and policies designed to alleviate rural poverty in the United States, poverty persists. In the past, policymakers have focused on failures in the labor market as a cause of rural poverty yet have failed to answer a fundamental question: Why are the same groups of people living in poverty decade after decade, generation after generation?

      As a member of the Rural Sociological Society (RSS) Task Force on Persistent Rural Poverty,  the author examined the relationship between extractive natural resources, local communities, and poverty. [1]   This present paper discusses policy impacts specific to the case of Alaska in more detail.  In so doing, it augments the findings of the RSS Task Force regarding the obstacles to economic development that resource-dependent communities in rural America face, and the need to consider spatial location as a critical factor in explaining rural poverty.

      This paper presents an analysis regarding the causes of persistent rural poverty in Alaska villages. It discusses the background, structure, and function of PL 94-204, the Alaska Native Claims Settlement Act (ANCSA), how the Act undermines Native polities and natural resource utilization, and the Act’s consequent contribution to persistent rural village poverty.  The principal problem is seen to be difficulties and conflicts in achieving sustainable and equitable economic development under the corporate structure imposed by ANCSA, due to constraints of physical geography, biological resource characteristics, and traditions of governance and resource use. Approaches to resolving continuing issues also are discussed.

     

UNDERSTANDING PERSISTENT POVERTY IN VILLAGE ALASKA

     

      Previous studies have identified a number of critical concepts in explaining persistent poverty in isolated communities in Alaska.[2]  These include economic factors as well as restriction on natural resource use.

      Few Options for Economic Development.  Populations at risk often are situated in economically nonviable areas, which reduces their opportunities to escape poverty.[3]  This is particularly true of “Village Alaska,” the more than 50 percent of Alaskan villages that are home to over 50 percent of the poverty population in Alaska and have no significant marketable natural resources. [4]  Income transfers and related economic assistance have heavily supported these villages and been important in maintaining village residents in these economically nonviable locations.[5]   This public sector support was particularly influential in the late 1970s and the 1980s, a period of large infusions of public monies for fixed capital improvements and income assistance.[6]

      High Costs of Living.  Even though income in villages may be above nominal poverty levels,[7] living costs often are extreme and resulting health and safety problems may preempt people from living comfortably and securely. A case in point is the village of Gambell on St. Lawrence Island where families often do not have enough money to buy fuel oil although the median family income was about 16,000 dollars in 1989.[8] Transportation costs alone double the price of goods and services, since virtually all materials must be flown in.  Many other villages are located on major rivers or the sea coast and receive their year’s supply of bulk fuel and other heavy goods in one barge shipment each summer.  If this delivery fails (due, for example, to low river levels or shipping equipment breakdown), or if an accident such as a fire destroys stockpiles, then even more costly emergency air transport is necessary.

      Single-Resource Dependent Economy. Poverty is especially persistent in states dependent on a single natural resource industry.[9] No other state shows such a dramatic dependence on a single resource as Alaska. [10]  Eighty-five percent of Alaska state revenues are derived from one resource -- oil, and about one of every three jobs in Alaska is supported by state spending. [11]  Economic development in Alaska, including the availability of public sector funding for transfers, is closely tied to oil production and markets. Increased oil prices from 1973 to 1982 led to a widespread expectation that Alaska always would receive large revenues from oil, and public sector programs and the overall economy expanded greatly.   When oil revenues dropped in the mid-1980s, cut-backs in public programs inevitably followed and economic activity declined markedly.[12]

      Restricted Resource Use.  The management of natural resources by regulatory agencies restricts resource use by the most vulnerable groups[13] and localities,[14] contributing to their poverty.  In Alaska this is manifested particularly by the establishment of harvest rules and quotas for fish or wildlife that can restrict subsistence harvests for village populations.[15]

      The understanding of rural poverty in Alaska is generally based on these concepts: isolated locations and high costs of living in much of Village Alaska, the nature of sustainable income in natural resource-dependent economies, and the effects on these communities of the way in which regulatory agencies manage those resources.  The important role that policy plays in maintaining populations in economically nonviable areas is not as well examined. This role is exemplified by the Alaska Native Claims Settlement Act of 1971 (ANCSA), a major land claims settlement and natural resources policy that has had significant impacts on Alaska Native livelihood, polities, and poverty.

     

ANCSA AS ECONOMIC AND SOCIAL POLICY

     

      ANCSA provided a federal land settlement extinguishing aboriginal claims to the state’s 152 million hectares of land and territorial waters by providing Alaska Natives with 17.8 million hectares of land and nearly one billion dollars.  One of the most significant feature of the bill was the establishment of village and regional corporations as owners of the land and recipients of the money.  The consequences of this corporate structure have reverberated through Alaska Native communities and the entire Alaskan economy and society in the years since. 

     

      Background to ANCSA

 

      Alaska was occupied by the United States without, for the most part, the wars and subsequent treaties that settled Native American land claims in the Lower 48 states.  Although Alaska Native land claims were asserted as early as 1867 when the Tlingit Indians of southeast Alaska challenged the sale of Alaska by Russia to the United States, decades passed with little attention to and no resolution of these claims.  Native groups intermittently pressed the issue. In 1912, leaders of the Tanana chiefs in interior Alaska asserted Native title to traditional hunting and fishing lands that were being used by settlers.  In 1935, the Tlingit, joined by the Haida, challenged the withdrawal of lands for the Tongass National Forest.[16]

      With statehood in 1958 and the provision that the state could select 41.7 million hectares from the public domain, tension mounted over the effects of these selections on traditional use by Natives and on their aboriginal land title.[17]  Native leaders and supporters, and the new Alaska Federation of Natives (AFN), pushed for a land settlement.[18]  The issue continued unresolved and in 1966 Interior Secretary Stewart Udall froze the conveyance of state-selected lands pending a Native land claims settlement.

      Shortly thereafter the key incentive for concluding a land settlement was provided by the discovery of oil at Prudhoe Bay on Alaska’s North Slope in 1967.  All sides realized a pipeline across Alaska to get the oil to market might be delayed for years by aboriginal land claim challenges.  In addition, the state urgently wanted to continue to build its own land base.[19]  The oil was seen as enormously important to state development and national interests, and the political will coalesced to settle Native land claims and remove this obstacle.[20]

     

      Objectives of ANCSA

     

      Although the immediate impetus for ANCSA was to allow North Slope oil fields to be developed, framers of the Act set out to accomplish much more.  For many proponents, a fundamental purpose of ANCSA was to achieve far-reaching social policy objectives.[21]  ANCSA was explicitly designed to change the structure of the body politic in Native communities, and thereby the economic situation.[22] Previously, a largely traditional, consensus-based polity typically existed, particularly at the village level.[23] ANCSA mandated a for-profit corporate structure foreign to most Native communities as the mechanism for economic transformation. 

      The intent of the corporate structure was to assist Alaska Natives in their social and economic development[24]  by giving them control -- as corporate shareholders -- over their land and other natural resources and the profit motive for economic development, while avoiding the paternalism (and attendant continuing federal obligations) of the reservation system in the contiguous 48 states. [25]  The corporation model was seen by most framers of the Act, both non-Native and Native, as the key instrument to help -- and perhaps induce -- Native groups to make the transition to a modern economic society. 

      However widespread the desire for a settlement, many Natives either had doubts about or were not aware of particular provisions of the Act or their implications. At minimum, the full impacts of choosing corporations as the implementing mechanism for ANCSA policy could not have been widely understood. [26]

     

      Provisions of ANCSA

     

      Key provisions of ANCSA concerned land, money, and control of those resources.  Most fundamentally, Alaska Natives received 17.8 million of the state’s 152 million hectares and nearly one billion dollars for their aboriginal land claims.  These assets were divided among nearly 200 village corporations and 12 regional corporations, with each village becoming part of one of the regions. [27]  Village corporations received surface title to 11.3 million hectares, and the regional corporations received the subsurface title to village lands and full title to an additional  6.5 million hectares.[28]

      The for-profit corporation was superimposed on pre-existing village governmental structures.  Federally-recognized IRA (Indian Reorganization Act of 1934) governments and traditional Native council governments in Alaska continued in a trust relationship with the federal government; ANCSA did not extinguish these structures.  In addition to land and resource ownership claims, ANCSA extinguished Native’s claims to any other traditional land-related rights, including aboriginal hunting and fishing rights.  A variety of provisions addressed other aspects of resource ownership and utilization. [29]

     

      Changes to ANCSA

     

      Although more than 50 amendments have made numerous changes to provisions of the Act,[30] up to the present the structure of ANCSA, including the corporation model, has remained largely intact.[31]

      The change with arguably the most importance for Native resource use resulted from the passage in December 1980 of the Alaska National Interest Lands Conservation Act (ANILCA), PL 96-487.  ANILCA mandated a hunting and fishing preference for rural residents in Alaska, thereby adding protection for Native subsistence uses. [32]  ANILCA’s main function was to add 42 million hectares to Federal conservation systems in Alaska and to establish almost 23 million hectares of Federal wilderness. 

     

      Perspectives on ANCSA

     

      How well ANCSA satisfied its basic objective  -- to justly settle native land claims -- varied among observers. To most framers of ANCSA, and probably much of the general public, the monetary and land entitlement terms of the settlement seemed at least fair.[33] It is not difficult to see why the settlement was considered generous, particularly in comparison with treatment of Native Americans in the contiguous 48 states.  Alaska Natives were to obtain fee simple title to more land than was held in trust for all other Native Americans. Compensation for relinquished lands was nearly four times the amount all Indian tribes had won in the 25-year lifetime of the Indian Claims Commission.[34]

      Viewed in other ways, the settlement terms appear less bountiful.  For one, the 962.5 million dollars cash settlement was an arbitrary amount, a blend of what the House and Senate in compromise with each other felt the country could afford to pay and what would be sufficient for the viability of Native corporations. It was not based on any lengthy review of the value of the land.[35]

      From the Alaska Native perspective, much was given up.  In 1971, Alaska Natives held aboriginal title to most of the land in Alaska -- about eight and one-half times the amount of land they received in the settlement.  The cash settlement was equivalent to a little less than three dollars per acre (or seven dollars per hectare) relinquished.[36]  The settlement also appears more modest when compared with recent forms of state assistance financed by oil revenues from state lands.  For example, electricity consumers served by the Four Dam Pool hydroelectricity projects in Alaska have benefited from 485 million dollars in state grants and loans, equivalent to about 16,000 dollars per beneficiary.[37]

      In addition, although ANCSA policy was directed at Native peoples, its economic impacts were far broader. It can be argued that major beneficiaries of ANCSA included the rest of Alaska’s population and its commercial and political sectors: organized sportspeople, state government, the oil industry, and others.[38]

 

CORPORATE STRATEGIES, VILLAGE ENVIRONMENTS, AND TRADITIONAL VALUES

 

The consequences of ANCSA policy -- particularly its creation of village corporations -- are far-reaching in Village Alaska.  Achievement of policy objectives has been severely constrained by both physical and cultural geographies.  Separation of land ownership from communal governance has altered management motivation and produced conflicts with traditional subsistence uses.  Despite efforts to adapt ANCSA policies to Alaska Native goals, significant difficulties continue.

 

      Alaska’s Unforgiving Geographies

     

      Overlooked in much of the enthusiasm for the corporate model introduced by ANCSA were the realities of Alaska’s geographies. Both the physical and cultural geographies of Village Alaska severely restrict the sustainable economic development intended to result from vesting profit-driven corporations with village land resources and bankrolling their startup.

     

     

     

     

      Physical Geography

     

      The physical geography of much of Village Alaska does not easily accommodate entrepreneurial ventures that require external markets. Villages generally lack arable land as well as the fuel and nonfuel resources needed for capital-intensive extractive industries. Labor is unskilled; the costs of energy, transportation, and communication are high. Ironically, little investment opportunity exists for the substantial sums of money provided by ANCSA. The policy objective of economic development through corporate activity stood little chance of succeeding in many villages.

      Probably the greatest lesson learned from ANCSA is that there is scant hope for a self-sustaining mixed economy in much of Village Alaska. Many villages represent sites formerly used part of the year in a mobile subsistence economy.[39] In short, locations ideally suited for subsistence activities are ill-suited to the non-Native cash economy.[40]

      Yet village residents need the "omnipresent, nonnegotiable elements of contemporary village life" such as "heating oil, electricity, cotton, wool and fiber-filled clothing, coffee, sugar, televisions and other accoutrements of the American mass culture" that are difficult to obtain in Village Alaska.[41]  It is the public sector that supports the purchase of many of these items and the delivery of these services. Moreover, the per capita cost to the public sector of providing a minimum level of service is high in remote regions.  For example, one school principal may be needed whether or not the school has 20 or 200 students.[42] Extreme physical conditions such as harsh climates also add to the cost of service delivery and transportation.

      Further, the transfer economy is already proving to be unsustainable. As state oil revenues decline, state and local government expenditures are cut back, direct transfer programs are reduced, and capital projects providing needed cash income for families are eliminated.[43] The transfer economy also encourages return migration, increasing the level of population in a region beyond its economic viability.[44] Transfers then may provide the main financial base for people to live in a region without sufficient viable economic activity.

     

     

     

      Cultural Geography

     

      The cultural geography of much of Village Alaska does not well accommodate business ventures for private gain. Subsistence activities remain an integral part of Alaska Native culture.[45] In general, there is no well-developed market system (there are few middlepersons). Typically, labor is given as an obligation of life; it is not a commodity that is bought and sold in a village marketplace.      

      Further, most resources are used almost exclusively for local consumption in much of Village Alaska, and usually every effort is made to manage renewable resources for continued future use. In villages, the organization of distribution, patterns of consumption, ideology of kinship, and friendship obligations have changed little: Native subsistence is neither nuclearized nor private.[46]  The corporate obligation to provide financial return to shareholders can be counter to these important subsistence uses of resources, particularly fish, game, and their habitats, as discussed below.  Moreover, the values and processes of prevailing systems of governance and decision-making in villages were quite different from the corporations that now managed the communities’ land and other resources, particularly forests.

     

      Impacts on Subsistence

 

      Subsistence is an important element of family economies and a central part of personal and cultural identity for Village Alaska Native residents.  Alaska Natives rely on subsistence activities (often understood as managing and harvesting food or other natural resource products necessary for survival from the environment) for a significant part of their livelihood in rural areas.[47]  Data collected through the 1980s for more than 100 Alaska communities show that the median harvest of subsistence foods was 250 pounds, ranging from a low of 10 pounds per person in Anchorage to a high of 1498 pounds in the rural village of Hughes.[48]  In half of the sampled communities, wild food harvests were greater than the United States yearly average of 222 pounds per person of store-bought meat, fish, and poultry. Harvests in northwest and arctic Alaska were the highest, averaging 610 pounds per capita.[49]

      Subsistence has important cultural as well as nutritional values due to spiritual linkages to some subsistence activities, the narrow distinction between work and leisure (subsistence harvest work is often pleasurable[50]), and the scarcity of steady wage employment. For much of Village Alaska, subsistence is more than survival, it is a way of life.[51]   Physical and cultural geographies intermingle in the subsistence economy.  For example, the availability of subsistence resources explains in part the size and location of villages. [52]  Small, isolated communities reduce the competition for subsistence resources.

      In some ways, ANCSA has helped to financially support subsistence activities.  Individual Alaska Natives often have used the funds from settlement and income transfer programs for subsistence equipment, travel, and so on. Estimates show that over one-third of household income may be devoted to subsistence food harvesting.[53] These sources of funds also support the adaptation of technology in subsistence. In recent decades, motorized vehicles and modern mechanized tools for hunting and fishing have become widespread in Village Alaska. Thus, Natives retain subsistence life styles yet mechanize harvest activities, in part with ANCSA disbursements and state and federal subsidies. [54] To the extent that such income helps achieve the goal of greater harvests, villagers will continue to be dependent on them.[55]

      While supporting subsistence, this use of transfer funds indicates another weakness in the corporate model for developing Village Alaska. Individuals often use increased income to support subsistence rather than enable their entry into the market economy as independent entrepreneurs.

      The principal impact of ANCSA on subsistence is to transfer control over many subsistence resources from communal governance to new owners mandated to be motivated by succeeding in a market economy.  Non-market subsistence values -- both economic and cultural -- cannot compete on corporate balance sheets[56] with the market value of timber, oil, gravel, waterfront recreational property, and other assets.

      At the time ANCSA was formulated, some foresaw that it could lead to conflicts between Native corporate land development and subsistence uses by corporation shareholders.[57]  In fact, significant conflicts have occurred in several areas, most notably over timber cutting by village or regional corporations (which is seen by some shareholders as damaging wildlife and fish habitat and cultural values).[58]  The corporate role in promoting oil development, particularly on lands such as the Arctic National Wildlife Refuge that are not owned by Native corporations but provide habitat for wildlife resources, also has been controversial with some groups. [59]

 

      Changing Native Polities

 

      At the time ANCSA was formulated, it was believed that the corporate structure being offered was an improvement on the trust relationship maintained between the Bureau of Indian Affairs and the Native American Tribes of the contiguous 48 states. Certainly, it seemed, social as well as financial goals could be accommodated within the structure, as discussed earlier.

      The local governing bodies allowed by the Indian Reorganization Act of 1934 were structured more along the lines of a traditional consensus-based polity. In establishing Native corporate structures, ANCSA effectively separated Native political rights from the ownership and control of land. The federally recognized and supported political organization no longer administered the land. 

      The significant departure  of ANCSA from other Native American policy was that no federally protected land reservation system was set up, nor lengthy wardship or trusteeship. Instead, modern corporations with essentially fee-title (traditional western title or fee simple absolute title) student readings, 31to the land were quickly established. ANCSA abruptly moved Alaska Natives into the mainstream of American capitalism as corporate owners focused on financial performance rather than land stewardship, and with little regard to existing organizational structures or behaviors and lifestyles foreign to capital accumulation.[60]

      This sudden change did, however, parallel other more evolutionary changes originating within Native societies themselves, including the emergence of a statewide organization (AFN) with increasingly centralized decision-making (in contrast to traditional local or regional consensus), and the emergence of statewide Native leaders with more experience in institutions of the dominant “Anglo” culture and advanced formal education. These developments were in response to state and national pressures, often centered on the land claims issue, and may be seen as continuing attempts by Alaska Natives to cope with the conflicts and contradictions of a changing world in responsible and effective ways. The tension inherent in changing from traditional social and political processes is demonstrated by unease by some about the centralized decision-making of the AFN while ANCSA was being prepared, and disquiet expressed in recent years by Natives who feel those decisions did not reflect their own views.[61]  These tensions were part of what has led to the efforts to change ANCSA, particularly concerning sovereignty and subsistence.[62]

 

      Employment as a Cultural Goal

     

      One economic development impact of many ANCSA corporations is through shareholder employment.[63] Typically, jobs are scarce in Village Alaska. Federal or state government positions -- teachers, postal workers, law enforcement -- often are filled by non-Natives. Usually a few service sector businesses such as restaurants, general stores, or transportation providers operate in a village. Otherwise, very little employment exists other than the jobs the corporations can generate.  Understandably, job creation is a primary goal of many corporations.[64]

      Apart from economic development goals, many corporations view employing their shareholders as a way to promote cultural survival. For example, three of the regional corporations -- NANA, Ahtna, and Sealaska -- stress the ability of their shareholders to keep their cultural identity and subsistence lifestyle while participating in the wage economy on their own terms as Native corporation employees.

      At least one ANCSA provision indirectly promotes employment within some regions, albeit at the expense of other regions. The ANCSA Section 9 requirement that 70 percent of net revenues from the sale of natural resources conveyed as part of the settlement be shared among all regional corporations acts as an incentive to increase local employment or pay supranormal wages as a way of keeping revenues within the region. By such practices, some ANCSA corporations have been able to help finance the maintenance of cultural values in their own regions despite structures foreign to traditional Native social and political organizations.

 

UNRESOLVED ISSUES

 

      Two main, interconnected issues related to ANCSA remain unresolved in the view of many Alaska Native leaders: protection of subsistence opportunities, and sovereignty.[65]  Both are aspects of the general issue of who has control of land and resources.  The present shape of these issues and their persistence is due in large part to the mechanism ANCSA employed -- creating corporations and vesting them with ownership of Native lands -- to implement its economic development and social transformation policies.

     

     

     

     

      Subsistence

     

      In making no provisions for Native subsistence rights,[66] ANCSA set the stage for continuing legal challenges over the last two and one-half decades for Alaska Natives to regain some control over subsistence resources. Current legal struggles over subsistence rights derive partly from incompatible policy directives at the federal and the state levels subsequent to ANCSA.  ANILCA reserves subsistence hunting and fishing rights on federal lands for rural residents, while state law giving a rural preference has been found to be impermissible under the Alaska Constitution. [67] This discrepancy between federal and state law has forced the federal government to reassert management authority over fish and wildlife on federal lands. The only resolution appears to be “...refinements to state or federal statutes.”[68]  However, it remains uncertain whether adherence to a rural preference consistent with ANILCA would be seen by Alaska Natives as resolving the fundamental issue of protecting subsistence.  To many, neither federal nor state management of their subsistence resources is the solution.

     

      Sovereignty

     

      Instead, actions are underway in a number of Alaska Native villages to assert, and obtain federal recognition for, tribal sovereignty as a way to, among other purposes, regain local management of resources, particularly fish and wildlife.[69]  Recognition of tribes as sovereign governments, with natural resource management authorities, is considered by some the only way to ensure that tribal interests in subsistence resources are protected from the potentially conflicting interests both of ANCSA corporations and of other entities: state government, local governments, sports fishing or hunting groups, other resource development businesses, and so on. 

      Tribal leaders hoped that the ANCSA amendments passed in 1987 would result in Congress recognizing the IRA and traditional Native councils, thereby honoring claims of inherent, self-governing power based on the existence of independent "nations" or organized tribes before the "discovery" of the New World by Europeans.[70] The councils would then assume ownership and control of ANCSA lands and resources from the corporations. Despite the efforts of groups such as the Alaska Native Coalition fighting for political sovereignty, the corporate structures as established by ANCSA are still intact.[71]  Nevertheless, there continue to exist federally-recognized IRA governments and at least 90 traditional Native council governments in Alaska in a trust relationship with the federal government.[72]

      Berger identifies land retention as the key issue to many Alaska Natives.[73]  Commonly suggested alternatives to resolve it are restructuring  the ANCSA settlement to transfer corporations lands to other institutions, either non-profit corporations, cooperatives, or tribal governments -- all of which are membership organizations that derive income from their assets and provide members with benefits.  Berger identifies and endorses tribal government ownership as the favored solution among the three options, based on his hearings in the villages.

      Apart from land, the sovereignty issue also includes concern about the potential loss of tribal or Native identity with all its cultural and pragmatic implications.  This concern arises from ANCSA’s departure from other settlements that treated Native Americans as wards of the federal government. Although this difference is commonly seen as a major strength of ANCSA relative to other settlements, some Alaska Natives voiced another perspective as early as 1973: "If [Congress] had a magic wand, they would probably do away with treaties, reservations, wardship, trusteeship, and maybe even Indian tribes in general...this process used to be called termination, but now they sometimes call it self-determination."[74]

      The issue was partly that social service programs might be phased out "now that Natives are such wealthy citizens."[75] More basic, however, was the concern over the ending of the historic relationship between Alaska Natives and the federal government.[76] Taken to an extreme, such a settlement could terminate the federal-Native trust relationship, governmental social services, and further the assimilation of Natives into the dominant society.[77]

      Sovereignty is seen by many as the best corrective measure to the social engineering of ANCSA.  The Act extinguishes tribal title and rights to land and resources and opens the way to resource development and extraction, thereby encouraging the movement of Natives into a social and economic mainstream. [78]  In contrast, recognition of aboriginal title to the land, Natives' rights to natural resources, and community governance would return control of the direction and pace of development to the communities.

     

CONCLUSIONS: ANCSA POLICY AND POVERTY

 

      ANCSA demonstrates the risks in formulating policy that does not reflect the cultural values of target populations and their natural resource utilization strategies. Framers of ANCSA, including many Native leaders, assumed -- or at least hoped -- that villages would prosper with the creation of the corporations.  For the most part, however, the for-profit corporations have not been financially successful.[79],[80] Local employment has been only token in some communities, and many villages have continued to grow, with people remaining or returning to participate in the ANCSA disbursements and public income transfers.[81] The villages are now more dependent than ever on state and federal income transfers.[82]

      For scores of small and remote Village Alaska communities, almost any economic activity other than subsistence can be done less expensively elsewhere. Goods and services can be imported more cheaply than they can be produced locally. ANCSA's objective that corporations would be formed, capital accumulated, and profits made has proven untenable for most villages. In many cases, corporate spending has resulted without concomitant sustainable economic development.

      Moreover, subsistence -- the principal foundation of the economy and a core part of cultures in much of Village Alaska -- is compromised by the ANCSA corporate development and social transformation model. The separation of land resource control from village government produces resource utilization decisions that are not necessarily representative of village interests.  Subsistence resources -- fish and wildlife, and their essential habitats -- often suffer most.  Their economic and cultural value to a village can be much greater than their market value to the land-owning ANCSA corporation.  When corporations capitalize and exploit other resources, the integrity or quality of subsistence resources is sometimes threatened.

      Finally, corporations operate under different rules than governments and cannot be their equivalents.  Without governmental control over their land and subsistence resources, Alaska Native tribal members cannot determine for themselves the course of their economic and cultural lives.

      It is now clear that in designing ANCSA and its corporate business structures more consideration should have been given to the natural resource base, rural business opportunities and the market for commodities produced, how traditional values and practices would affect the intended changes resulting from the policy, and similar issues.  If, culturally, Natives use low-risk strategies as a modus operandi, why superimpose high-risk strategies on them as evident in the for-profit business ventures ANCSA promoted? As Chambers notes,[83] "It is safer and more humane to proceed by short steps into what can be foreseen than by long leaps into the unknown."

      In many ways, ANCSA can be viewed as regressive for Alaska Native political development. It institutionalized and reinforced divisions between regions and villages, jeopardized Native lands by exposing them to alienation, corporate failure, and taxation, and did not recognize Native or tribal government institutions.[84]

      The public sector has provided the policy basis and the economic transfers to attempt to integrate precapitalist (subsistence) modes within a larger political economy in rural Village Alaska.  However, ANCSA policy, with its key implementation mechanism of Native corporations, has not succeeded in fostering widespread private sector village development to replace public transfers.

      Since this economy remains dependent on currently declining public sector transfers and has restricted access to resources, it is unlikely to provide a stable and healthy foundation for many of rural Alaska's communities. These rural populations maintained in economically nonviable areas inevitably constitute persistent rural poverty.  However, moves to increase Alaska Natives’ sovereignty over resources (to modify or replace ANCSA’s corporate ownership structures) hold promise for strengthening subsistence economies and helping to alleviate village poverty.

     

     


NATURAL RESOURCE POLICY, UNFORGIVING GEOGRAPHIES,

AND PERSISTENT POVERTY IN ALASKA NATIVE VILLAGES

 

INTRODUCTION                                                                                                                       

UNDERSTANDING PERSISTENT POVERTY IN VILLAGE ALASKA

ANCSA AS ECONOMIC AND SOCIAL POLICY

      Background to ANCSA

      Objectives of ANCSA

      Provisions of ANCSA

      Changes to ANCSA

      Perspectives on ANCSA

CORPORATE STRATEGIES, VILLAGE ENVIRONMENTS, AND TRADITIONAL VALUES

      Alaska’s Unforgiving Geographies

            Physical Geography

            Cultural Geography

      Impacts on Subsistence

      Changing Native Polities

      Employment as a Cultural Goal

UNRESOLVED ISSUES

      Subsistence

      Sovereignty

CONCLUSIONS: ANCSA POLICY AND POVERTY

 


GIGI BERARDI*

 

NATURAL RESOURCE POLICY, UNFORGIVING GEOGRAPHIES, AND PERSISTENT POVERTY IN ALASKA NATIVE VILLAGES

 

ABSTRACT

 

      This paper presents an analysis regarding the causes of persistent rural poverty in Alaska villages. It discusses the background, structure, and function of PL 94-204, the Alaska Native Claims Settlement Act (ANCSA), how the Act undermines Native polities and natural resource utilization, and the Act’s consequent contribution to persistent rural village poverty.  The principal problem is seen to be difficulties and conflicts in achieving sustainable and equitable economic development under the corporate structure imposed by ANCSA, due to constraints of physical geography, biological resource characteristics, and traditions of governance and resource use. The paper augments earlier findings of the Rural Sociological Society’s Task Force on Persistent Rural Poverty regarding the obstacles to economic development that resource-dependent communities in rural America face, and the need to consider spatial location as a critical factor in explaining rural poverty.

 

 

 

­___________________________________

      *    Gigi Berardi is a member of the faculty of the Center for Geography and Environmental Social Sciences, Huxley College of Environmental Studies, Western Washington University. Research support was provided by the Western Rural Development Center (Corvallis, Oregon), Loyola Marymount University, the W.K. Kellogg Foundation, the Association of American Geographers, and the Bureau of Faculty Research at Western Washington University. The author thanks the following experts for their helpful suggestions during the research and manuscript preparation phases of this work, for providing valuable information, and for their critical comments: Steve Colt, Institute of Social and Economic Research, University of Alaska Anchorage, Steven McNabb, Social Research Institute, Carol Lewis, School of Agriculture and Land Resources Management, University of Alaska Fairbanks, Jean Melious and Lynn Robbins, Western Washington University, and James Allaway, Resources International. Any errors or omissions are the author's responsibility.


      LITERATURE CITED AND BIBLIOGRAPHY

     

      *Alaska Department of Fish & Game. 1989. Alaskans' per capita harvests of wild food. Alaska Fish & Game 21(6): 14-15.

     

      Alaska Department of Fish & Game, Division of Subsistence. 1990. How Alaska's subsistence law affected hunting regulations. Juneau: Alaska Department of Fish & Game.

     

      Alaska Department of Fish & Game, Division of Subsistence. 1991. Subsistence management in Alaska: 1991 update. Juneau: Alaska Department of Fish & Game.

     

      Badger, T.A. 1991. Judge orders Interior to reissue ANWR report. Juneau Empire (July 25): 1,8.

     

      Berman, Matthew and Karen Pyle Foster. 1986. Poverty and public assistance among Alaska Natives: Implications for 1991. ISER (Institute of Social and Economic Research) Staff Paper. Anchorage: University of Alaska Anchorage, ISER.

     

      *Braund, Stephen R. & Associates. 1986. Effects of renewable resource harvest disruptions on community socioeconomic and sociocultural systems: King Cove, Technical Report No. 123 submitted to the U.S. Department of the Interior, Minerals Management Service, Alaska OCS Region, Anchorage, Alaska.

     

      *Braund, Stephen R. & Associates with the Institute of Social and Economic Research. 1989a. North Slope subsistence study, Barrow, 1988, Technical Report No. 135 submitted to the U.S. Department of the Interior, Minerals Management Service, Alaska OCS Region, Anchorage, Alaska.

     

      *Braund, Stephen R. & Associates with the Institute of Social and Economic Research. 1989b. North Slope subsistence study, Wainwright, 1988, Technical Report No. 136 submitted to the U.S. Department of the Interior, Minerals Management Service, Alaska OCS Region, Anchorage, Alaska.

     

      *Chambers, Robert. 1983. Rural development: Putting the last first. New York: John Wiley & Sons, Inc.

     

      *Colt, Steve. 1990. "Comparative Economic Performance of the Alaska Native Regional Corporations," ISER (Institute of Social and Economic Research) Preliminary Paper, October, 1990. Anchorage: University of Alaska Anchorage, ISER.

      *Craig, Peter G. (LGL Ecological Research Associates). 1987. Subsistence fisheries at coastal villages in the Alaskan arctic, Technical Report No. 129 submitted to the U.S. Department of the Interior, Minerals Management Service, Alaska OCS Region, Anchorage, Alaska.

     

      ESG (prepared for U.S. Department of the Interior). 1984.    Alaska Native Claims Settlement Act (ANCSA) 1985 study. Falls Church, VA: ESG.

     

      *Freudenburg, William R. 1991. "Addictive Economies: Extractive Industries and Vulnerable Localities in a Changing World Economy," paper presented at the Rural Sociological Meetings, Columbus, Ohio, August 1991.

     

      Gorsuch, Lee. 1979. Impact of ANCSA on federal, state, and local governmental functions and services. ISER (Institute of Social and Economic Research) Staff Paper. Anchorage: University of Alaska Anchorage, ISER.

     

      Harrison, Gordon S. 1989. The years of big spending in Alaska: How good is the record? ISER (Institute of Social and Economic Research) Occasional Papers No. 20, March 1989. Anchorage: University of Alaska Anchorage, ISER.

     

      Haynes, Terry and Sverre Pedersen. 1989. Development and      subsistence: Life after oil. Alaska Fish & Game 21(6): 24-27.

     

      *Huskey, Lee. 1984. "Import Substitution in Frontier Regions," June 25, 1984. Anchorage: University of Alaska Anchorage.

     

      *Huskey, Lee. 1990. "Regional Poverty, National Transfers: Transfer Programs and Poverty in Rural Alaska," paper presented at the WEA International Conference, San Diego, California, July 1990.

     

      Impact Assessment, Inc. 1990. Northern institutional profile analysis: Beaufort Sea, Technical Report No. 142 submitted to the U.S. Department of the Interior, Minerals Management Service, Alaska OCS Region, Anchorage, Alaska.

     

     

      *Institute of Social and Economic Research (ISER). 1984a. Import substitution in Alaska. ISER (Institute of Social and Economic Research) R.S. No. 19, June 1984. Anchorage: University of Alaska Anchorage, ISER.

     

      Institute of Social and Economic Research (ISER). 1984b. Changes in the well-being of Alaska Natives since ANCSA. ISER (Institute of Social and Economic Research) 21 (3, November 1984). Anchorage: University of Alaska Anchorage, ISER.

     

      Institute of Social and Economic Research (ISER). 1986. Poverty among Alaska Natives. ISER (Institute of Social and Economic Research) R.S. No. 31, May 1986. Anchorage: University of Alaska Anchorage, ISER.

     

      Institute of Social and Economic Research (ISER). 1987a. Where have all the billions gone? ISER (Institute of Social and Economic Research) 24 (1, February 1987). Anchorage: University of Alaska Anchorage, ISER.

     

      Institute of Social and Economic Research (ISER). 1987b. Alaska's economy: What's ahead? ISER (Institute of Social and Economic Research) 24 (2, December 1987). Anchorage: University of Alaska Anchorage, ISER.

     

      Institute of Social and Economic Research (ISER). 1989a. Spending and earning in the recession. ISER (Institute of Social and Economic Research) 26 (2, June 1989). Anchorage: University of Alaska Anchorage, ISER.

     

      Institute of Social and Economic Research (ISER). 1989b. Rebuilding Native political economies. ISER (Institute of Social and Economic Research) R.S. No. 43, August 1989. Anchorage: University of Alaska Anchorage, ISER.

     

      Institute of Social and Economic Research (ISER). 1989c. Petroleum in Alaska. ISER (Institute of Social and Economic Research) R.S. No. 45, December 1989. Anchorage: University of Alaska Anchorage, ISER.

     

      Institute of Social and Economic Research (ISER). 1990a. Better times in Alaska. ISER (Institute of Social and Economic Research) 27 (1, June 1990). Anchorage: University of Alaska Anchorage, ISER.

     

      Institute of Social and Economic Research (ISER). 1990b. Oil price surprises and the budget. ISER (Institute of Social and Economic Research) Fiscal Policy Note No. 3, August 1990. Anchorage: University of Alaska Anchorage, ISER.

     

      Institute of Social and Economic Research (ISER). 1990c. Alaska's dependence on state spending. ISER (Institute of Social and Economic Research) Fiscal Policy Papers No. 5, October 1990. Anchorage: University of Alaska Anchorage, ISER.

     

      Jorgensen, Joseph G. 1972. The sun dance religion: Power for the powerless. Chicago: University of Chicago Press.

     

      Jorgensen, Joseph G. 1981. Anthropologists as participants in the policy process: Social impact assessments and energy developments. Policy Studies Review 1 (1): 66-86.

     

      Jorgensen, Joseph G. 1983. The political economy of the Native American energy business. In Native American and Energy Developments II (1984). Boston: Anthropology Resource Center.

     

      Jorgensen, Joseph G. 1984a. Effects of renewable resource harvest disruptions on socioeconomic and sociocultural systems impact analysis: Unalakleet, Norton Sound, Technical Report No. 90 submitted to the U.S. Department of the Interior, Minerals Management Service, Alaska OCS Region, Anchorage, Alaska.

     

      *Jorgensen, Joseph G. 1984b. Commentary: Native Americans and rural Anglos: Conflicts and cultural responses to energy developments. Human Organization 43 (2): 178-185.

     

      *Jorgensen, Joseph G. 1990. Oil age Eskimos. Berkeley: University of California Press.

     

      *Knapp, Gunnar and Lee Huskey. 1988. Effects of transfers on remote regional economies: The transfer economy in rural Alaska. Growth and Change (Spring): 25-39.

     

      Knapp, Gunnar and Thomas A. Morehouse. 1991. Alaska's North Slope Borough revisited. ISER (Institute of Social and Economic Research) Staff Paper. Anchorage: University of Alaska Anchorage, ISER.

     

      Kruse, John A. Undated. "Alaska Inupiat Subsistence and Wage Employment Patterns: Understanding Individual Choice." ISER (Institute of Social and Economic Research) Staff Paper. Anchorage: University of Alaska Anchorage, ISER.

     

      Little, Ronald L. and Lynn A. Robbins. 1984. Effects of renewable resource harvest disruptions on community socioeconomic and sociocultural systems: St. Lawrence Island, Technical Report No. 89 submitted to the U.S. Department of the Interior, Minerals Management Service, Alaska OCS Region, Anchorage, Alaska.

     

      Luton, Harry H. 1985. Effects of renewable resource harvest disruptions on socioeconomic and sociocultural systems: Wainwright, Alaska, Technical Report No. 91 submitted to the U.S. Department of the Interior, Minerals Management Service, Alaska OCS Region, Anchorage, Alaska.

     

      McNabb, Steven. 1991. "Elders, Inupiat Ilitqusiat, and Culture: Goals in Northwest Alaska," paper presented at the Annual Conference of the Alaska Anthropological Association, Anchorage, Alaska, March 1991.

     

      Morehouse, Thomas A. 1988. The Alaska Native Claims Settlement Act, 1991, and tribal government. ISER (Institute of Social and Economic Research) Occasional Papers No. 19, May 1988. Anchorage: University of Alaska Anchorage, ISER.

     

      Morehouse, Thomas A. 1989. Rebuilding the political economies of Alaska Native villages. ISER (Institute of Social and Economic Research) Occasional Papers No. 21, August 1989. Anchorage: University of Alaska Anchorage, ISER.

     

      Thomas, Monica E. 1988. Conflict and controversy: Land ownership in Alaska. Land Use Policy 5(1): 121-129.

     

      Tussing, Arlon R. 1982. Alaska: Precarious riches and stubborn poverty. ISER (Institute of Social and Economic Research) Staff Paper. Anchorage: University of Alaska Anchorage, ISER.

     

      *U.S. Bureau of the Census. 1990. Statistical Abstract of the United States: 1990, 110th edition. Washington, DC: U.S. Government Printing Office.

     

      Wolfe, Robert J. 1990. Subsistence in the 1990s: What lies ahead?  Marine Resource Quarterly. Dillingham, Alaska: University of Alaska.

     

      Wolfe, Robert J. and Robert J. Walker. 1986. "Subsistence and Income in Rural Alaska." Juneau: Alaska Department of Fish & Game, Division of Subsistence.

     

      Wolfe, Robert J. and Robert J. Walker. 1987. Subsistence economies in Alaska: Productivity, geography, and development impacts. Arctic Anthropology 24(2): 56-81.

      (360) 650-3285



          [1]See RURAL SOCIOLOGICAL SOCIETY TASK FORCE ON PERSISTENT RURAL POVERTY, PERSISTENT POVERTY IN RURAL AMERICA (1993). The task force was organized to outline new directions in theory that would provide complementary and cumulative explanations of persistent rural poverty.  Its intent was to move beyond major existing theories such as the culture of poverty and embrace more robust theories such as rational underinvestment, dependency, moral exclusion, and global economic restructuring. The task force focused on rural rather than urban poverty since previous research had centered mostly on urban areas. Key terms -- "persistent," "rural," and "poverty" -- are defined and discussed on pp. 4-7 and 20-22 of the report.  Briefly, "persistent" refers to the permanence of a substantial segment of the population with incomes below the poverty threshold despite ameliorative efforts, "rural" refers to nonmetropolitan or more sparsely populated areas, and families living in "poverty" are those whose cash income is below the official poverty threshold. In the 1990 U.S. Bureau of the Census data, 48 thresholds are used to determine poverty status; these are adjusted annually to reflect inflation.

     [2]Gigi Berardi, Native Alaskan Populations at Risk: Putting the Last First (1991) (paper presented to the Rural Sociological Society Meeting, Columbus).

     [3]See Lee Huskey, Regional Poverty, National Transfers: Transfer Programs and Poverty in Rural Alaska (1990) (paper presented to the WEA International Conference, San Diego); Alaska Natives Commission/Joint Federal-State Commission on Policies and Programs Affecting Alaska Natives, Alaska Natives Commission Final Report, Volumes I-III (1994); Matthew Berman and Karen Pyle Foster, Poverty Among Alaska Natives, Research Summary 31, Institute of Social and Economic Research [hereafter ISER], Anchorage (1986).

     [4]"Village Alaska" as discussed in this paper refers to remote villages, many of which are characterized by their small size, with populations of less than 500, and at least one-quarter of the households living below the poverty level; see Lee Huskey, The Economy of Village Alaska, ISER, 2 (1992). These villages are found principally in the Yukon-Kuskokwim Delta, southwest, and interior regions, as well as, to a lesser extent, the northwest, arctic, and Alaska Peninsula regions. More prosperous villages are found in areas where they receive direct income from oil or taxes on oil (as on the North Slope), fish (as in some coastal regions), timber (as in southeast and southcentral Alaska), or minerals (areas of the northwest region). For more detailed information, see RURAL SOCIOLOGICAL SOCIETY TASK FORCE ON PERSISTENT RURAL POVERTY, supra note 1, at 21; State of Alaska Department of Community and Regional Affairs [hereafter DCRA], Community Information Summaries, Anchorage (1995).

     [5]Income transfers and related support include money and services the federal and state governments provide such as: welfare, pension, and other payment programs; jobs in post offices and other public agencies; and schools and other services which also are subsidized. In 1989, transfers accounted for nearly 60 percent of per capita personal income in western coastal Alaska. See Huskey, supra note 4, at 9.

     [6]See Huskey, supra note 4, at 9-12; Gordon S. Harrison, The Years of Big Spending in Alaska: How Good is the Record? Occasional Papers No. 20, ISER (1989).

     [7]See DCRA, supra note 4.

     [8]Id.

     [9]See Oliver Scott Goldsmith and Teresa Hull, Tracking the Structure of the Alaska Economy: The 1994 ISER Map Economic Database, ISER, Anchorage (1994); Matthew Berman, Eric Larson, and Bradford Tuck, Natural Resource Depletion and Social Income Accounting: Sustainable Income in Petroleum-Dependent Economies, ISER, Anchorage (1992).

     [10]U.S. Bureau of the Census, Statistical Abstract of the United States: 1990, 110th edition, U.S. Government Printing Office, Washington, D.C. (1990).

     [11]Before the Prudhoe Bay oil fields were discovered, Alaska was a state of modest means. Military and other federal government spending and extractive industries (fishing, mining, logging, and some oil production in Cook Inlet) provided most of state income. The economic impact of the discovery of oil in Alaska was dramatically different than elsewhere, primarily because the state government owned the field and thus could collect royalties as well as taxes, large amounts of oil could be produced (close to two million barrels a day), and, soon after oil began flowing, the world price tripled.

     [12]See Berman, Larson, and Tuck, supra note 9; Thomas A. Morehouse, Alaska's Political Economy: Myths and Realities (1993) (paper presented to the Western Regional Science Association Annual Meetings, Wailea, Maui, Hawaii).

     [13]See ROBERT CHAMBERS, RURAL DEVELOPMENT: PUTTING THE LAST FIRST (1983); JOSEPH JORGENSEN, OIL AGE ESKIMOS (1990).

     [14]See William Freudenburg, Addictive Economies: Extractive Industries and Vulnerable Localities in a Changing World Economy (1991) (paper presented to the Rural Sociological Society Annual Meeting, Columbus).

     [15]See JORGENSEN, supra note 13; for a related discussion on rural vs. urban subsistence harvest preference, see Alaska Natives Commission/Joint Federal-State Commission on Policies and Programs Affecting Alaska Natives, supra note 3, Volume III, and, in particular, 42.

     [16]It was not until 1959 that the Tlingit and Haida received a judgment in the 1935 action. As reported by Berger, "The U.S. Court of Claims explicitly declared that the Treaty of Cession, 1867, did not extinguish aboriginal title." Seven years later they were awarded a cash settlement of 7.5 million dollars in compensation, with no return of Native lands. See THOMAS R. BERGER, VILLAGE JOURNEY: THE REPORT OF THE ALASKA NATIVE REVIEW COMMISSION 22 (1985). Berger was head of the Alaska Native Review Commission; the commission was appointed by the Inuit Circumpolar Conference -- an organization of Eskimos from Alaska, Canada, and Greenland -- to review ANCSA.

     [17]See, for example, Alaska Department of Education, The Alaska Native Claims Settlement Act: Selected Student Readings, Anchorage, 6 (1986).

     [18]Id., at 7.

     [19]There was tremendous pressure on Native groups as well to settle land claims, given the expected economic importance of Prudhoe Bay oil. In subsequent years, Prudhoe Bay oil has accounted for nearly 20 percent of United States oil production.

     [20]See the following for identification and discussion of issues, events, and participants in the formulating of ANCSA:  Morehouse, supra note 12; Victor Fisher, Alaska Native Land Claims Bibliography (1979) (paper presented to the Seventh Libraries Colloquy, Centre d'Etude Arctiques, Paris);  BERGER, supra note 16; Thomas A. Morehouse, The Alaska Native Claims Settlement Act, 1991, and Tribal Government, Occasional Papers No. 19, ISER, Anchorage (1988); MARY C. BERRY, THE ALASKA PIPELINE, THE POLITICS OF OIL AND NATIVE LAND CLAIMS (1975); FREDERICK S. BIGJIM AND JAMES ITO-ADLER, LETTERS TO HOWARD: AN INTERPRETATION OF THE ALASKA NATIVE LAND CLAIMS (1974). See also DAN O’NEILL, THE FIRECRACKER BOYS (1994), for a description of a Cold War-era attempt to use nuclear bombs to excavate a harbor in northwest Alaska, which contributed to the growth of Alaska Native leadership and activism on land rights.

     [21]Some saw the Act as social engineering.  See Stewart French, Alaska Native Claims Settlement Act, Arctic Development and Environment Program, Arctic Institute of North America, 3, 16 (1972): "... while admittedly a compromise and far from perfect, [ANCSA] nevertheless marks a great moral and ethical advance over the white man's dealings with the native inhabitants of the Lower 48...the Act will provide an unparalleled case study on a large scale of the adaptability to a radically changed economic, social, and political environment of several markedly different ethnic groups, which have dealt effectively for centuries with a harsh physical environment and a totally different level of social and economic problems.  The mechanism for the use, development, and control over the lands, resources, and money by the Native people of Alaska -- only a few generations removed from aboriginal existence -- is that relatively modern business creation, the corporation...As shareholders, the Native people are entitled to a voice in management and a share in the lands, assets, and income...”  Economic benefits anticipated included development of natural resources, capital improvements (for example, housing, transportation, and services), employment opportunities, and establishment of small business enterprises.  Broader social benefits included raised educational levels and greater Native political influence.

     [22]As discussed by BERGER (supra note 16, at 45), the framing of ANCSA resulted from a report by the Federal Field Committee for Development Planning in Alaska, which considered Alaska Natives to be part of a culture of poverty. To change the economic situation, one needed to change the culture. A modernizing sector of the economy means new economic gains and disappearance of the traditional sector. As BERGER said (supra note 16, at 46), "ANCSA is an attempt to re-create Main Street on the tundra." ANCSA does this by promoting capital expenditures. Rather than strengthen the existing subsistence economy, it encourages extraction of natural resources and the economic development anticipated to follow.

     [23]See Morehouse, supra note 20, at 1-2.

     [24]This is clear in some of the provisions of ANCSA.  For example, the 70 percent revenue sharing among corporations underscores the role that Congress saw for the corporations, not merely to make profits but to provide a degree of equity among Alaska Natives. 

     [25]Before 1968 there was no mention of corporations; the first bills introduced in 1967 resolved claims through "tribes, bands, villages, communities, associations or other identifiable groups of Eskimos, Indians, and Aleuts," see ROBERT D. ARNOLD, ALASKA NATIVE LAND CLAIMS, 153 (1978).  In 1968, in U.S. Senate Interior Committee meetings, business corporations were proposed as the means of carrying out the settlement -- in large part due to opposition to the power of the federal government, as shown through the BIA’s bureaucratic and inept handling of its responsibilities on reservations.

      Senator Henry Jackson, one of the main architects of ANCSA, and other major figures in Congress rejected tribal governments as the "vehicle" for implementing ANCSA. ANCSA, in terms of policy, specifically avoided the creation of "permanently racially defined institutions," namely, tribal institutions. This was a departure from the prior practice of creating reservations and the special obligation of the federal government to provide health and social services to other Native Americans. Opposition to extending the Indian reservation system to Alaska was widespread.  Even AFN attorney, Barry Johnson, urged the corporation structure as the main vehicle (the theme of the 1971 AFN convention, the last held before the passage of ANCSA, was, "In the white man's society, we need white man's tools;"  see ARNOLD, at 153).

     [26]There is no doubt that the passing of ANCSA, although celebrated as a holiday in certain Native organizations such as the AFN, was a bittersweet victory. An editorial in the Tundra Times at the time stated, “962 million [dollars]-- a payment for lands lost. These are almost astronomical figures, but at the end of the voting, they were met with almost a dead silence by some 600 native delegates to the AFN convention...The delegates must have sensed that as they voted, they were also voting to relinquish some 300 million acres of land forever -- lands they and their ancestors were accustomed to using...`For several times today, I didn't know whether to laugh or cry,' said a woman delegate...The atmosphere at the convention hall seemed to be prefaced with a special kind of sadness -- a strange ending to a great fight for justice." See Howard Rock, Congress Passes Alaska Native Land Claims Bill: ‘I Didn’t Know Whether To Laugh Or Cry,’ in Tundra Times, Alaska Native Claims Settlement Act: A Scrapbook History  (1991).

      In particular, most Natives were not familiar with corporations as a form of organization nor with the kinds of laws usually governing it. Compounding problems, many villagers, particularly older persons in northern and western Alaska, could not understand the language or meaning of provisions of the Act.  Also see BERGER, supra note 16.

     [27]An authorized Thirteenth Regional Corporation, for Natives residing outside of Alaska, formed in 1976 after contested elections and lawsuits.

     [28]The twelve regional corporations, set up in 1972, actually began to function in 1975. A total of about 75,000 shareholders eventually enrolled in groups ranging from 1,100 (Ahtna Corporation) to about 16,000 (Sealaska Corporation). Regional corporations received 459 million dollars out of the 962 million dollar cash settlement; village corporations and individuals received the rest.

     [29]Some of the more salient parts of ANCSA for the present analysis include the following (from Alaska Department of Education, supra note 17; U.S. Department of the Interior, ANCSA 1985 Study (1984); Fisher, supra note 20; Ely, Guess & Rudd, Summary and Analysis of the Alaska Native Claims Settlement Act, Rural Alaska Community Action Program, Anchorage (1972)):

      Section 2 specifies the goals and intents of Congress: to settle land claims without litigation, with maximum participation by Natives in decisions, without establishing permanent racially defined institutions and at the same time without diminishing obligations of the United States or Alaska to protect and promote the rights and welfare of Natives.

      Section 3 defines terms, including who qualifies as an Alaska Native (a U.S. citizen of one-quarter Native blood including Natives who had been adopted by one or more non-Native parents), and what is a qualifying Native village (a community having 25 or more Natives on the 1970 census enumeration date).

      Section 4 extinguishes Natives' claims to any traditional land rights beyond that given in the settlement.

      Section 5 contains provisions for enrollment of Natives, including the controversial provision that "New Natives," born after December 18, 1971, are not included.  Only Natives born on or before that date were eligible to receive corporation stock; as early as 1991 over half of Alaska Natives were not shareholders.

      Section 7 provides for the creation of regional corporations and  Section 8 for the creation of village corporations, with eligible Natives each holding 100 shares. No stock could be sold, pledged, seized for debt, or otherwise alienated (except, for example, to pay child support). At the end of 20 years all this stock was to be canceled and unrestricted stock issued in exchange.

      Section 9 provides that 70 percent of net revenues from the sale by regional corporations of natural resources conveyed as part of the settlement must be shared among all regional corporations in proportion to the enrolled population of each.

      Section 17 provides for a Joint Federal-State Land Use Planning Commission that would, among other duties, identify public access easements to be reserved on Native lands.

       Section 21 exempts corporations from real property and various other taxes for 20 years.

     [30]Perceived legal, political, and economic problems with ANCSA resulted in strong demands, led by the AFN and Native leaders, for changes to the law, especially before the 1991 deadline when protection of stock from alienation and lands from taxation was to expire. See Thomas A. Morehouse, Native Claims and Political Development, 21-22 (1987) (paper presented to the Western Regional Science Association Annual Meetings, Kona, Hawaii).

     [31]For example, in 1976 PL 94-204 extended the deadline for enrollment of Natives and contained provisions for the mergers of Native corporations, timelines for the submission of reports of the Joint Federal-State Land Use Planning Commission, and land exchanges.

      In 1987, PL 100-241 made significant amendments to provisions of the original law that were to go into effect in 1991 (causing it to be referred to as the "1991 law or 1991 amendments"). See Alaska Federation of Natives (AFN), 1991: Making It Work, Anchorage, 3, 14, 37 (1988).

      The amendments passed in 1987 extend indefinitely the restrictions on stock alienation, unless corporate shareholders remove the restrictions by majority vote.  Besides inheritance, stock can change hands in a few ways only, including to pay child support or alimony.

       The amendments also extend the tax exemptions and other protection on all ANCSA lands that remain undeveloped, unleased, and unsold. In general terms, land cannot be: taxed; taken by trespassers who otherwise might acquire rights to the land (through trespassers’ or squatters' rights); taken by creditors to pay a debt owed by the corporation; or, lost if the corporation files bankruptcy or is involuntarily dissolved.

      In addition, the amendments call for the issuance of additional stock to "new Natives" (those born after the enactment of ANCSA in 1971), elders, and others who missed the previous official enrollments of eligible shareholders in the ANCSA corporations.

      Protection of subsistence hunting and fishing opportunities was one of the most important motivations for these amendments. The amendments help keep Native corporations and lands under Native control, but they also arguably diminish the value of corporate stock by restricting its sale and providing for the issuing of additional shares.

     [32]Monica E. Thomas, Conflict and Controversy: Land Ownership In Alaska, 5 LAND USE POL. 121-129 (1988).

     [33]As a former Chief Counsel of the U.S. Senate Committee on Interior and Insular Affairs observed, "The Act is the most generous settlement ever granted by a government to a relatively powerless minority." See French, supra note 21, at 16.

     [34]See ARNOLD, supra note 25, at 147-148.  This perception in turn affected attitudes toward Alaska Natives in following years. As Berger noted, "There can be no doubt that the amount of ANCSA's cash compensation caught the public’s eye. Millie Buck, speaking at Gulkana, remarked that constant reiteration of the generosity of the settlement had left White people with the idea that an Indian who was driving a new car had not worked for it but had simply bought it from a share of the settlement...’You have a lot of the White community against anything that's Native because of the land claims, because they thought we got so much.’" See BERGER, supra note 16, at 27-28.  A change in public opinion about the generosity of the Act likely would require the public becoming better informed about the settlement terms and the overall consequences and beneficiaries. 

     [35]See Alaska Department of Education, supra note 17, at 32.

     [36]BERGER, supra note 16, at 24, 27.

     [37]See Steve Colt, ANCSA and Rural Alaska: An Economic Reality Check (1993) (paper presented to Commonwealth North, Anchorage).

     [38]Morehouse, supra note 30, at 20-21.

     [39]See Gigi Berardi, Rural Sanitation and Participatory Research in Alaska (1997) (paper presented to the Association of American Geographers Annual Meeting, Fort Worth).

     [40]BERGER, supra note 16, at 34. In fact, lands selected by the village corporations were chosen basically for subsistence rather than for their opportunities for economic development. Most of the land selected had no commercial possibilities.

     [41]See Alaska Federation of Natives (AFN), The AFN Report on the Status of Alaska Natives: A Call for Action, Anchorage, 36 (1989).

     [42]See Gunnar Knapp and Lee Huskey, Effects of Transfers on Remote Regional Economies: The Transfer Economy in Rural Alaska, (Spring) GROWTH AND CHANGE 25-39 (1988). Huskey estimates that in 1989 village residents in the Norton Sound, Interior River, and Lower Kuskokwim areas would have had to pay more than 20 percent of their average per capita income for the same level of school, local government services, and electric power if these costs had not been subsidized; see Huskey, supra note 4, at 11.

     [43]For more discussion of fiscal problems at the state level and their effects on the village transfer economy, see Berman, Larson, and Tuck, supra note 9.

     [44]See supra note 5.

     [45]See Alaska Natives Commission/Joint Federal-State Commission on Policies and Programs Affecting Alaska Natives, supra note 3, Volume III.

     [46]For example, studies in the village of Yakutat on the Gulf of Alaska coast illustrate the importance of sharing subsistence resources in Native and rural communities.  In 1984, moose were harvested by 22 percent but used by 70 percent of households, dungeness crab was harvested by 40 percent but used by 98 percent of households, and shrimp were harvested by 18 percent but used by 86 percent of households. David D. Mills and Anne S. Firman, Fish and Wildlife Use In Yakutat Alaska: Contemporary Patterns and Changes, Technical Paper 131, Division of Subsistence, Alaska Department of Fish and Game, Douglas, 89 (1986).

     [47]See BERGER, supra note 16; Joseph Jorgensen, principal investigator, Social Indicators Study of Alaskan Coastal Villages, Part IV, Minerals Management Service, Anchorage (1993); Kevin Waring Associates, Hope Basin Socioeconomic Baseline Study, Volumes 1-3, Minerals Management Service, Anchorage (1992); Stephen Braund & Associates, North Slope Subsistence Study: Barrow 1988, Minerals Management Service, Anchorage (1989); Stephen Braund & Associates, North Slope Subsistence Study: Wainwright 1988, Minerals Management Service, Anchorage, (1989); Peter G. Craig, Subsistence Fisheries at Coastal Villages in the Alaskan Arctic, Minerals Management Service, Anchorage (1987).

     [48]Alaska Department of Fish & Game, Alaskans' Per Capita Harvests of Wild Food, 21 ALASKA FISH & GAME 14-15 (1989).

     [49]Id.

     [50]JORGENSEN, supra note 13, at 78.

     [51]See BERGER, supra note 16, 48-55, 67-68.

     [52]Huskey, supra note 4, at 13-14.

     [53]See JORGENSEN, supra note 13, and in particular, 110, 179.

     [54]As one village leader explained, "We take whatever technology works and shape it to our own purposes and uses...Apparently that bothers people who want us to remain pristine, or to admit our contradictions of wanting technology and controlling and preserving the natural resources for our own use...Why not? We've always accepted and reshaped technology that works for our own purposes.”  JORGENSEN, supra note 13, at 69.

     [55]Government restrictions on the uses of many subsistence resources since 1971 have led to conflicts over the harvesting of resources. One of the most disputed issues is the regulation of hunting and fishing, in many cases pitting Natives against urban residents who sport hunt and fish, and against management bodies, in particular, the Alaska Department of Fish and Game and the policy-making Alaska Boards of Fisheries and Game.

     [56]ARNOLD, supra note 13, at 293.

     [57]ARNOLD, supra note 13,  at 263-264. For example, Arnold reports that there was awareness of the potential for conflict with essential subsistence uses from developments such as timber cutting, oil drilling and production, or building tourist facilities.

     [58]Tim Bristol, Gaining Influence, (Fall) NATIVE AMERICAS 14-21 (1996). Bristol gives an overview of Native corporation economic development and resulting tensions.  See also Dirk Miller, Disappearing Forest: Hoonah and Chichagof Island Logged for Quick Cash, The Juneau Empire, July 9, 1995, at A1.

     [59]BERGER, supra note 16, at 40-41.  See also Bristol, supra note 58, at 21.

     [60]As stated by a prominent Native corporate leader, "The irony strikes me that in the `Lower 48,' Indian reservations exist with the land largely protected, but in many instances with little economic enterprise. For Alaska Natives, the land is totally at risk and economic enterprises now account for most Native organization and activity." See Alaska Department of Education, supra note 17, at 23.

     [61]See BERGER, supra note 16.

     [62]Id., at 155-172.

  

     [63]See Steven Colt, Comparative Economic Performance of the Alaska Native Regional Corporations, ISER, Anchorage (1990).

     [64]See ARNOLD, supra note 13, at 282, for the goals of the regional Calista corporation, for example.

     [65]For example, in interviews with Nelson N. Angapak, Sr., the AFN’s Special Assistant for Land, in Anchorage (August, 1996), he states, “The two major changes needed to ANCSA are to delete the section on repealing aboriginal hunting and fishing rights and rewrite a section on Native self-governance.”

     [66]See Alaska Department of Education, supra note 17, at 37.

     [67]See the discussion on federal and state subsistence policies, and in particular, subsistence statutes and The Alaska National Interest Lands Conservation Act, in Alaska Natives Commission/Joint Federal-State Commission on Policies and Programs Affecting Alaska Natives, supra note 3, Volume III, at 12-39. For an overview discussion of issues concerning state management, see Alaska Department of Fish and Game Division of Subsistence, Subsistence Management in Alaska: 1991 Update (1991); Alaska Department of Fish and Game, A Brief History: Why Alaska Has a Subsistence Law, 21 ALASKA FISH & GAME 11 (1989).

     [68]Id.  Alaska Department of Fish and Game, at 11.

     [69]See Alaska Natives Commission/Joint Federal-State Commission on Policies and Programs Affecting Alaska Natives, supra note 3, Volume III, at 45-91.

      See also David Hulen, Court Ruling Upholds Authority of Tribes, Anchorage Daily News, Nov. 21, 1996, at A1, col. 1.  The most significant recent action was the 9th U.S. Circuit Court of Appeals decision in November 1996 affirming that ANCSA did not undermine at least some tribal government powers to tax and govern land, including Native corporation lands. The court also affirmed for the first time the existence in Alaska of “Indian Country,” a legal classification that applies to reservations of self-governing tribes in the Lower 48 states.  Sovereignty advocates see the decision as opening the way toward tribal government land and resource management authority.  The State of Alaska  intends to appeal the decision to the U.S. Supreme Court.

     [70]See Morehouse, supra note 20, at 4.

     [71]Id., at 2. Morehouse discusses the unsuccessful attempt by leaders of the Native tribal government movement in Alaska to use the 1991 amendments to establish governments representing the values and interests of the minority Native culture. Congress chose not to act on the political claims of Alaska Natives, declaring that no provision of the 1991 ANCSA amendments would confer any sovereign governmental authority over lands (including management of fish and wildlife resources) or persons in Alaska to Native organizations.

     [72]Also see supra note 29.

     [73]See BERGER, supra note 16, at 113-116.

     [74]See BIGJIM and ITO-ADLER, supra note 20, at 91.

     [75]Id.

     [76]See ARNOLD, supra note 25, at 275.

     [77]See Morehouse, supra note 30.

     [78]Id.

     [79]For example, since 1976, with an initial cash capitalization of 458 million dollars, the regional corporations have produced aggregate shareholder wealth of 874 million dollars (compounded to 1988 dollars), equaling 85 percent of the 1,033 million dollars which could have been generated by a financial trust invested at a nominal average risk-free rate of seven percent. If the figures are adjusted down for the high performance of one corporation and for the effects of a series of questionable federal tax subsidies, wealth measured in 1988 is about 24 percent of the trust fund alternative. See Colt, supra note 63, at 1. Also see Alaska Department of Education, supra note 17, at 21. Although Colt argues that basically the corporations would have been better off financially if they had taken the cash settlement and invested in mutual funds, others see the benefits that the corporations have brought. The NANA regional corporation, for example, employs more than a fifth of its 5,000 shareholders in mining, the oil industry, and tourism.  See Colt, supra note 63, and Alaska: From Fur-trading to Portfolios, (May 25) THE ECONOMIST 31 (1996).

     [80]The corporations have engaged in a variety of business activities, mostly direct investments in Alaska. Some were novel. The CIRI Corporation secured the right to acquire surplus federal property in lieu of some of its land entitlement -- 500 dollars in property for every acre of entitlement relinquished, putting 120 million dollars into CIRI's capital endowment; this is about three times the amount of cash originally conveyed to the corporation. Also, for several years the regional corporations had the right to sell net operating losses to other entities with positive tax liabilities, amounting to a major recapitalization of the corporate capital base.  See Colt, supra note 63, at 4.

     [81]For example, some types of transfers (such as Aid to Families with Dependent Children) link the amount of the transfer to the participant's other income. If villagers move to take jobs elsewhere, their transfers are reduced. The negative effect of transfer income on mobility is also exacerbated by the low cost of public goods in the villages which provides an incentive for residents to remain in the villages. See Huskey, supra note 4, at 12. It has been estimated that transfers in western Alaska have increased population by as much as three times that which the area could otherwise support. See Knapp and Huskey, supra note 42.

      From a Native perspective, the growth of the villages may be vital to the preservation of Alaska Native culture; see Alaska Natives Commission/Joint Federal-State Commission on Policies and Programs Affecting Alaska Natives, supra note 3, Volume I.

     [82]The transfer economy also increases dependency on decision-making bodies outside the villages that are responsible for state and federal laws, regulations, and programs directly affecting village welfare. See Huskey, supra note 4, at 12.

     [83]CHAMBERS, supra note 13, at 145.

     [84]See Morehouse, supra note 30, at 21. See also BIGJIM and ITO-ADLER, supra note 20, at 82-83: "We don't want to become better white men or beat them at their own game. We just want a chance to develop our traditional values into a satisfying way of life that we can understand. AN ACT is forcing us into new ways of organizing ourselves...AN ACT could split the Native peoples even more, set region against region, village against village... AN ACT is based on competition; the Native way is based on cooperation."

 

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