The Alaska Native Claims Settlement Act (ANCSA)
In December 1971, Congress passed the Alaska Native Claims Settlement Act, a historic measure intended to resolve the long-standing issue of aboriginal land claims in Alaska. ANCSA had another purpose, to create a mechanism for economic development in Alaska, particularly in rural areas. It was Congress’s intent that Alaska Native people, the shareholders of private corporations created by the Act, would guide this development.
Twelve Native-owned regional corporations were created in Alaska by ANCSA. NANA Regional Corporation is based in Kotzebue in the northwest part of Alaska. NANA’s predecessor, the Northwest Alaska Native Association, played a key part in the effort to secure passage of the Claims Act. A thirteenth regional corporation, based in Seattle, Washington, also was formed for Alaska Natives who were no longer residing in Alaska.
Both land and cash were involved in the settlement. The corporations were formed to receive approximately 45 million acres of land transferred from federal to private ownership and to manage investment of $962 million appropriated by Congress as the cash part of the settlement. In exchange, Native Alaskans ceded 88% of their aboriginal lands. An exception to this is that the thirteenth corporation received no land.
A Bold Experiment
Many consider ANCSA to be the boldest experiment in social and economic public policy ever undertaken. Besides settling a long-standing legal issue, Congress was attempting to empower a minority aboriginal people, and “privatize” on a grand scale with the transfer of substantial lands, and some cash, into private hands.
In settling the Alaska Native claims Congress sought to avoid the 19th century Indian reservation model of the lower 48 states, with its paternalistic control of the reservations and tribes by the Bureau of Indian Affairs. To foster greater self-determination, the new Alaska Native corporations were created as private corporations, free to make decisions without government oversight and subject only to federal and state laws that govern all private corporations.
The only exception to this was a ban on sale of shares of stock until 1991, to ensure that the corporations remained under the control of Native shareholders. (This was later amended to provide procedures where corporations could sell shares, but no corporation to date has opted to do so.)
ANCSA Had Another Purpose
The primary purpose of the Claims Act was to resolve the aboriginal land claims in Alaska. An important motivation of this was to clear title for a land corridor for the trans-Alaska oil pipeline. Secondarily, its purpose was to create vehicles for economic development (the Native corporations.)
There was another purpose, however. ANCSA became a vehicle for far-ranging changes in federal land management in Alaska. The Act set the stage for, and led directly to, the Alaska National Interest Lands Act of 1980 (ANILCA,) under which new national parks, wildlife refuges, national forests, and wild and scenic rivers were created out of what was formerly federal public domain land.
While approximately 45 million acres of federal land went into private ownership, over 80 million acres of land went into newly-created parks, refuges, and other conservation units. Of this, 55 million acres were given a Wilderness classification, the most restricted possible under federal law.
The Importance of ANCSA to Alaska
The 1971 Native claims act is important to Alaska for three major reasons:
- A legal cloud on title to federal and state-owned lands in Alaska was resolved.
- A significant private land base was created in an undeveloped state where, previously, the majority of lands were controlled by the federal government. The availability of opportunities to explore for and develop natural resources on these private lands, as well as state lands, is a significant inducement for new investment in Alaska. If these lands were still controlled by the federal government today there would be much less resource exploration. To cite a specific example, if the federal government were the landowner at the Red Dog Mine, the mineral prospect would have been included in the wilderness designation and not developed. Under private ownership by NANA Regional Corporation, Red Dog is now the largest lead-zinc mine in the world. In addition, the infrastructure created for Red Dog will eventually lead to development of other mines in Northwest Alaska.
- A pool of Alaskan-owned and controlled investment capital was created. While prudent management requires some of this to be in diversified investments outside Alaska, a large percentage has been invested in business and industrial support enterprises within the state. A recent study of the economic impact of business activities by the 12 regional corporations in Alaska, as well as 11 of the larger village corporations, indicated that in 2000 over 10,000 jobs were created in the state and $88 million in annual payroll was created.
Today Alaska’s Native Corporation (ANCs) are widely diversified through most sectors of the state’s economy. They are in mining, oil and gas services and production, real estate, construction, engineering and technical services, finance, and government contracting. Unlike corporations controlled from outside Alaska, ANCs have an incentive to invest within Alaska to create jobs and training opportunities for shareholders. While these investments have created jobs for shareholders, far more jobs have been created for other Alaskans.
How ANCSA Works
The twelve Alaska-based regional corporations and the village corporations formed under ANC own lands in different ways. The Claims Act allowed both regional and village corporations to select federal lands within their ethnic boundaries (in NANA’s case, for example, northwest Alaska).
Village corporations selected lands near their villages, in most cases. Subsurface mineral rights to all ANCSA lands went to the regional corporations. Village corporations owned surface lands. In the NANA region, all of the villages, except Kotzebue, merged their assets with the regional corporation to simplify land ownership and reduce administrative burdens.
An important ANCSA provision requires the sharing of 70 percent of natural resource revenues among the regional and village corporations. Thus all Native corporations benefit when a mine is developed on one regional corporation’s lands, another region owns part of an oil or gas field, or a third region harvests timber on its lands.
There are a few exceptions to the structure of regional and village corporations, however. The ANCSA allowed communities located on established reservations the option of owning their reservation lands, both surface and mineral title, and not participating in the cash settlement. All villages on reservations chose this option. Examples include Venetie in the northern Interior and St. Lawrence Island in the Bering Sea.
NANA Regional Corporation, Inc.
Today NANA has more than 13,000 shareholders and owns about 2.2 million acres of surface lands and subsurface mineral rights. Like other Native corporations, NANA maintains an investment portfolio of financial assets and also earns royalties from zinc and lead production at the Red Dog Mine, most of which is shared with other Native corporations.
Through NANA Development Corporation, its business arm, NANA is engaged in business enterprises including engineering & construction, resource development, information technology & telecommunications, facilities management & logistics and real estate & hotel development