THE ALASKA NATIVE CLAIMS SETTLEMENT ACT: CONFLICT AND CONTROVERSY
Published by Polar Record, 23(142): 27-36 (1986). Cambridge University Press
Monica E. Thomas
University of Alaska, Fairbanks, Alaska 99775, USA
Received April 1985
| The Alaska Native Claims Settlement Act: Conflict and Controversy, Monica E. Thomas, Polar Record, 23(142): 27-36 (1986). Used with permission of the author, for educational purposes only. |
ABSTRACT. Pending land claims by Alaska Natives were extinguished by the Alaska Native Claims Settlement Act of 1971. This act marked the culmination of more than 100 years of expressed Federal concern for protection of land rights of aboriginal peoples within the region, starting with the 1867 Treaty of Cession. The Federal legislation provided both a cash and a land settlement, and mandated creation of corporations to manage the resulting assets. Two amendments, in 1976 and 1980, attempted to alleviate certain problems arising from the original act. Nonetheless, many difficulties with the act itself are becoming more apparent as the 1990s approach, and certain sections of the act such as taxation and stock alienation become activated. This paper discusses the major events leading to passage of the act, key provisions of the act, and the major controversies and conflicts facing Alaska Natives through the next two decades as a result of the legislation.
Some major concerns and controversies
Declaration of Policy
Sec.2. Congress finds and declares that — (a) there is an immediate need for a fair and just settlement of all claims by Natives and Native groups of Alaska, based on aboriginal land claims;
Declaration of Settlement
Sec.4. . . . (c) All claims against the United States, the State, and all other persons that are based on claims of aboriginal right, title, use or occupancy of land or water areas in Alaska, or that are based on any statute or treaty of the United States relating to Native use and occupancy, or that are based on the laws of any other nation, including any such claims that are pending before any Federal or state court or the Indian Claims Commission, are hereby extinguished.
The Alaska Native Claims Settlement Act (US Public Law 92-203), passed 18 December 1971, was the largest settlement of Native aboriginal land claims in the history of the United States. Far from perfect, fraught with controversy and moulded by compromise, the act has inexorably influenced the future direction of economic development in Alaska and the role of Native citizens in that development.
This article examines some major components of the Alaska Native Claims Act (ANCSA), with emphasis on potential future impact, particularly during the next two decades. To provide background for this analysis, the paper reviews the historical basis of ANCSA, and discusses the major provisions of the settlement. Conforming to current accepted usage in the US, 'Native' (with capital letter) here distinguishes indigenous peoples of Alaska from those of other races who may have been born there.
At the time of initial Russian contact with Alaska in 1741, Natives of the region already had a long history of self-sufficient subsistence economies based upon the harvesting of abundant natural resources (Rogers 1962). Russian exploration and exploitation devastated these economies. Destruction of resources and often of human life, particularly Aleut, was high. By the early 1800s other nations, particularly the US and Great Britain, joined Russia in extracting resources, particularly exploiting marine mammals.
When the land area of Alaska was ceded to the United States by Russia in 1867, the treaty (15 Stat.539; Treaty Series 301) contained a clause in Article III that stated:
. . . The uncivilized tribes will be subject to such laws and regulations as the United States may, from time to time, adopt in regard to aboriginal tribes of that country.
The treaty specifically excluded Natives from rights, advantages, and immunities enjoyed by citizens of the United States: Native Alaskans did not become citizens of the US as a group until 1924. There was no mention of title to lands occupied and used by Natives at the time of purchase (Case 1978).
The Organic Act of 1884 (US Public Law, 48th Congress, Chapter 53), which attempted to provide Alaska with the basis for civil government, contained a clause in Section 8 that spoke directly to aboriginal land rights:
. . . Indians or other persons in said district shall not be disturbed in the possession of any lands actually in their use or occupation or now claimed by them but the terms under which such persons may acquire title to such lands is reserved for future legislation by Congress. . .
Recognition of aboriginal land rights in Alaska was a sharp departure from American Indian policy in other parts of the US. Observers believe this was more a result of slow economic development within Alaska than rejection of Indian policy (Cooley 1983).
By the early 1900s, Natives in southeast Alaska became concerned with non-Native land encroachment in traditional hunting and fishing areas. In 1912, they formed the Alaska Native Brotherhood to fight for land rights. In the early 1950s, Natives in northern Alaska became concerned with two Federal proposals, the first to build a dam on the Yukon River near Rampart, the second to create a deep-water harbour at Cape Thompson using a nuclear blast. Culmination of those concerns was the establishment of a statewide native organization in 1966 that became the Alaska Federation of Natives a year later (Arnold 1978).
When Alaska became a state in 1959 (US Public Law 85-508), the issue of aboriginal land claims was still unsettled (Hensley 1969). Congress continued a wait-and-see attitude by stating in Section 4 of the act:
As a compact with the United States said State and its people do agree and declare that they forever disclaim all right and title to any lands or other property not granted or confirmed to the State or its political subdivisions by or under the authority of this Act, the right or title to which is held by the United States or is subject to disposition by the United States, and to any lands or other property (including fishing rights) the right or title to which may be held by any Indians, Eskimos, or Aleuts (hereinafter called natives) or is held by the United States in trust for said natives; that all such lands or other property, belonging to the United States or which may belong to said natives, shall be and remain under the absolute jurisdiction and control of the United States until disposed of under its authority, except to such extent as the Congress has prescribed or may hereafter prescribe, and except when held by individual natives in fee without restrictions on alienation. . .
By the mid 1960s, the US Department of the Interior had received Native land claims exceeding the 152 million-hectare land area of Alaska. Many claims overlapped, and some extended into Canadian territory. Millions of hectares claimed by Native Alaskans were also claimed by the state under its almost 42 million-hectare statehood allotment. In 1966 US Secretary of the Interior Stewart Udall froze all land conveyances within Alaska. He explained:
In the face of Federal guarantee that the Alaska Natives shall not be disturbed in the use and occupation of lands, I could not in good conscience allow title to pass into others' hands. . . Moreover, to permit others to acquire title to the lands the Natives are using and occupying would create an adversary against whom the Natives would not have the means of protecting themselves. . . (Arnold 1978).
In 1967 commercial quantities of oil were discovered by the Richfield Company (now ARCO) at Prudhoe Bay on the North Slope of Alaska. The field became the largest ever discovered in North America, with over nine billion barrels of proven reserves. By the end of 1969 a group of eight petroleum companies had proposed a 1,270-kilometer pipeline from Prudhoe Bay to the ice-free port of Valdez, and the State of Alaska had received more than $900 million in bonuses from the leasing of 174,000 hectares of state land at Prudhoe Bay. The new US Secretary of the Interior, former Alaska Governor Walter Hickel, won confirmation only by promising to extend the land freeze through December of 1970.
With an unlikely coalition of oil companies, labour unions, Natives, and the State of Alaska, a powerful consensus for settlement of land claims developed. Without a settlement, uncertainties over land ownership prevented oil development by stalling construction of a pipeline over disputed Federal lands. Without a pipeline, neither the oil companies nor the state could reap the benefits of Prudhoe Bay. In addition, conveyance of statehood land remained frozen at a time when the state was eager to push ahead with a multitude of land-based development programs.
Numerous land-claims bills were introduced in Congress. The legislative rather than the judicial route was chosen because of the statement in the 1884 Organic Act that land-claims settlement was the responsibility of Congress. The final version was a large settlement of both land and money. In the process it established a framework for future land ownership in Alaska and placed Natives within the state on an economic path from which there was no retreat. It is important to note that not all Native organizations accepted the terms of settlement. On 18 December 1971, the Alaska Federation of Natives voted to accept settlement, with 56 dissenting votes. The dissent came from the Arctic Slope Natives who, despite their location, had not received any known oil land (Berry 1975).
ANCSA extinguished all aboriginal land claims in Alaska, providing in return a cash settlement of $962.5 million and a land settlement of 17,800,000 hectares (Burch 1979). The State of Alaska was responsible for $500 million, to be generated from certain mineral-resource revenues on Federal and state lands. The state paid off the debt early with a lump-sum contribution of almost $300 million during 1980. The Federal government appropriated the remaining $462.5 million over a ten-year period with the final payment in June of 1981. No adjustment for inflation was built into the payment schedule, resulting in a much-reduced settlement in real terms.
The land settlement of almost 18 million hectares was approximately 12 per cent of the area of Alaska. Conveyance of this land has been slow and complex. Only half of the selected land was conveyed in the first ten years after settlement. Difficulties include lack of land surveys, inadequate federal manpower for title searches and transfers, and a general ignorance regarding potential land value and use. Conveyance is currently continuing.
The legal vehicle established for managing settlement claims was the Native corporation (Branson 1979; Price 1979). The act designated twelve Native regions within Alaska, each region reflecting common culture wherever possible. Each region was to be managed by a corporation, with a thirteenth region and corporation later established for Alaska Natives living out of state. The regional corporation was to be a profit-making mechanism, comprised of resident Native shareholders, each with 100 shares. In addition, individual village corporations could be established within regions, provided a community had twenty-five residents in 1971. The village corporation could be profit-making or non-profit-making. Over 200 village corporations were established. There was a long and arduous enrollment procedure for Alaska Natives, but ultimately almost 79,000 qualified, excluding those on revoked reserves (1,500 additional) and in Metlakatla. To qualify, a person had to be one-quarter Native, a US citizen, and alive on 18 December 1971.
Money settlement went to the Native regional corporations through the Alaska Native Fund established in the US Treasury. Allocation of money was based upon enrollments, a sort of one-person, one-dollar approach. The regional corporations retained some of the money and distributed the rest to both individual Natives and village corporations. During the first five years, for the twelve regional corporations in Alaska, at least 10 per cent of the money was to be distributed to regional stockholders, and at least 45 per cent of the money was to be distributed to village corporations within regional corporation boundaries and region-at-large stockholders. After five years, at least 50 per cent of the money was to be distributed to village corporations and at-large stockholders. The 13th Regional Corporation was required to distribute 50 per cent of its money to stockholders in the regional corporation. A great deal of early settlement money went to corporate 'set-up' costs and payment of legal fees, both residual and new.
Land settlement was split between regional and village corporations. The village corporations received rights to 8,900,000 hectares. The amount of acreage to which a village was entitled was determined by village enrollment, and ranged from three townships (25-99 people) to seven townships (600 + people). Certain regional corporations received rights to 6.5 million hectares based on a land-lost formula. The twelve Alaska-based regional corporations received subsurface rights to all Native lands, village and regional, within their boundaries. Approximately 800,000 hectares went to special purposes including historical sites, cemeteries, and prior allotments.
The remaining 1,600,000 hectares went to seven villages on revoked reserves. These seven villages chose not to participate in ANCSA and instead received full title to their former reservations.
Since the original passage of ANCSA, and subsequent amendments in 1976 and 1980, conflicts have centred on land selection and use, money management, and the nature of the corporate structure itself (Olson and others 1979). Many Natives see ANCSA destroying that which it was created to protect through imposition of twentieth century private enterprise on a subsistence economy. Others see ANCSA as the last hope for cultural preservation and economic independence.
Some major concerns and controversies
ANCSA is a popular issue today, more than fourteen years after the first US Congressional action. Thomas Berger, former judge of the British Columbia Supreme Court, has just finished a two-year study of ANCSA for the Inuit Circumpolar Conference. Roy Kent, former Tanana Chiefs Conference Planning Director, has completed a one-year mandated study of ANCSA for the US Secretary of the Interior. In addition, the 1985 Alaska Federation of Natives convention endorsed eight proposed amendments to ANCSA.
The heightened interest in ANCSA is the result of concerns and controversies regarding key elements of the original act, plus subsequent amendments. These issues are the subject of the remainder of this paper (Alaska Native Foundation 1982; Anders 1983; Case 1983).
Stock alienation
Sections 7(h) and 8(c) of ANCSA restrict transfer of shareholder stock and deny voting rights to non-Natives who might acquire ANCSA stock through inheritance. On 1 January 1992, however, all corporation stock is in effect 'liquidated' and new stock will be issued without sale or voting restrictions. Subsequent 1980 amendments to ANCSA found in Section 1401 of the Alaska National Interest Lands Conservation Act (US Public Law 96-487) (ANILCA) permit corporations created by ANCSA to amend articles of incorporation until 18 December 1991 allowing majority-vote shareholders to deny voting rights to non-Native shareholders; thus the corporation will have first right of purchase on any stock. Because of the time frame, stock alienation is the most important issue facing Native corporations and Native Alaskans today.
It is the responsibility of corporations to convince their shareholders before 1992 that amending bylaws is in their individual best interests. Restricting voting rights will certainly reduce the value of stock, and shareholders will have to be convinced that continued Native control of the corporation is clearly more important than personal monetary gain. Ironically, the more economically successful the corporation, the more valuable would be the stock on the open market and the more tempting the idea of sale. On the other hand, if the corporation is economically unsuccessful, the shareholders may not wish to retain stock as a future investment. Regardless of decisions on bylaw amendments, Native control may dissipate somewhat as stock moves out of Native hands through the process of inheritance.
The after-born
Section 5(a) of ANCSA required the US Secretary of the Interior to prepare within two years a roll of all natives alive on the date of enactment of the act, although the deadline for enrollment was later extended in the 1976 ANCSA amendments (US Public Law 94-204). All Natives born later are excluded from the land and monetary benefits of ANCSA, except through the inheritance process.
As the after-born, now 14 years of age or younger and exceeding 20,000 in number, reach the age of majority, they will not be able to share in the decisions and responsibilities of their village and regional corporations. At the same time they face the reality of total extinguishment of any land-claims rights on their behalf.
It is difficult to ask Natives currently participating in the ANCSA settlement to share with additional individuals. This reduces their personal benefits and dissipates their sense of responsibility for the success of their corporations. In addition, permitting such dilutions of stock may be an unconstitutional seizure of property without compensation. On the other hand, there will soon emerge an entire generation of Natives without a link to the goals and objectives of ANCSA.
Alternative solutions abound. They include expansion of stock ownership to include the after-born despite the constitutional question, transfer of stock ownership from individuals to a Native 'community,' and taxation of some corporate wealth to be paid to a 'community' that includes the after-born. A major question involves whether any new eligibility should be open ended with respect to date of birth. No alternative is likely to be popular and the issue will not be resolved soon, if ever.
Land taxation and protection
Section 21(d) of ANCSA exempts all undeveloped and unleased lands conveyed through the act from state and local real-property taxes for a period of twenty years. Section 904(d)(1) of ANILCA amended ANCSA and extended the time period to twenty years from the vesting of title. In addition Section 907 of ANILCA created the mechanism of a land bank, which permits corporations to place undeveloped and unleased lands in a preservation status for an initial ten-year period, renewable for additional five-year periods. These lands must be managed in a manner compatible with the management plans of any adjacent Federal and state lands.
The land-bank concept clearly postpones any pressing need for land-management decisions by removing the taxation threat. It provides a mechanism for protecting subsistence use of land in rural Alaska. It may be a way of splitting off land from money with respect to stock alienation. It also reduces the likelihood that large blocks of Native lands will be used for major economic development programs, at least in the near future. A very controversial alternative is to convey the land to some kind of comprehensive, community-based organization. This would create 'tribal' land as opposed to corporate land. Both alternatives reduce the potential profitability of Native corporations and create a clear conflict between the desire of urban Natives for dividends and profits and the desire of rural Natives for protected land status. It is a prime example of money versus culture, a conflict inherent in ANCSA that lacks clearcut solutions. As more Natives move to urban areas, this conflict will intensify.
The 70/30 split
Section 7(i) of ANCSA requires that 70 per cent of all revenues from timber resources and the subsurface estate within a region be divided annually by the regional corporation among all twelve in-state regional corporations, according to the number of shareholders in each corporation. After years of controversy, the twelve regional corporations signed an agreement in 1981 defining what is meant by 'revenues.'
The 70/30 split is an attempt to share the wealth and prevent one corporation from benefiting disproportionately from an incidental resource find. On the other hand, this split clearly affects the management scenario of a corporation. Since agriculture and non-resource-based land development are exempt from sharing, these programmes may be emphasized at the expense of wiser alternatives. In addition, some resource development may never occur, particularly high-cost, high-risk ventures. If anything, the 70/30 split encourages land protection in the form of subsistence use, thereby reinforcing the 'land-is-our-culture' concept currently stressed by many Native organizations across Alaska.
Corporate mergers/consolidations
Section 7(b) of ANCSA permits the merger of twelve regions into no fewer than seven regions. Section 30(b) of the 1976 ANCSA amendments denies the normal rights of dissenting shareholders to mergers under Alaska law until 19 December 1991.
Some Native corporations are experiencing severe financial problems while several are quite profitable. Most of the corporations are somewhere in the middle, showing small to moderate profits. It may be advantageous for some corporations to merge into an existing corporation or consolidate into a new corporation. If this is to occur, it is rational to complete the reorganization before late 1991 to avoid having to 'cash out' dissenting shareholders under Alaska law.
A major stumbling block to aggregation is the differing cultural backgrounds of the various Alaska regions. Each regional corporation attempts to represent a cultural group as defined by boundaries established as part of ANCSA. Different cultural groups do not all pursue the same goals, particularly if one corporation tends to be urban based, such as Cook Inlet Region, and another tends to be rural based, such as NANA.
Another stumbling block is that some corporations like Doyon have a large land base while other corporations such as Sealaska have no appreciable land holdings but a large financial base because of the number of shareholders. The very different structures of these two corporations would make aggregation difficult.
Viability of village corporations
A corporation is usually established in order to exploit an opportunity that has arisen. The Native corporations were created by a reverse process that first established the structures, then sought out the opportunities.
In many villages there are simply no viable economic opportunities available; investments within the community have zero chance of yielding substantial monetary returns/ And yet, investments outside the village reduce direct benefits to shareholders, including the chances of obtaining that very scarce commodity, a job.
Village corporations had high 'setting-up' costs and continue to have high operating costs. Whether a corporation is large or small, profit-making or non-profit-making, there are certain legal and accounting procedures that must be followed. It is estimated that $75,000-$100,000 per year is the minimum cost of operating a village corporation in accordance with state and Federal laws, whether it has 25 or 2,500 shareholders. It is very difficult to find talented individuals willing and able to manage the organization 'in-house.' This requires the extensive use of expensive outside consultants who spend only a few days each month, or each year, within the community. Some village corporation mergers may be necessary just to reduce operating costs.
Without access to reliable telephone service, television reception, postal service, a local banking institution, or even, in some places, a retail store, it is very difficult to maintain a corporate structure and educate shareholders as to its role and the importance in their lives. Village corporations may be more at risk than regional corporations with respect to stock alienation.
Native leadership
A major consequence of ANCSA is the increasing demand for qualified administrators to manage the more than 200 village and regional corporations across Alaska. To date, most leadership positions in the corporations have been filled by non-Natives. Despite the rising expectations of Native youth, too few Native students are successfully completing education programmes which will prepare them for employment in the corporations. In 1980 25 per cent of enrolled Alaska Native youth dropped out of high school (Kruse 1984). The Molly Hootch decision, an Alaska court settlement in 1976 (Anna Tobeluk et al) requiring the construction of small village high schools, has, it appears, reduced the ability of rural Native youths to compete with urban students at the university level (Kleinfeld and others 1982). In addition, the cultural backgrounds of many Native youths do not prepare them for the highly competitive atmosphere of a university.
An additional problem emerging from ANCSA is the so called 'three-button Native' dilemma. To succeed in a profit-making corporation, executives must learn and adopt the nuances of the capitalistic system, including dress, speech, and attitudes. This system, however, is in opposition to many cultural values of Alaska Natives, which support subsistence and sharing, rather than development and competition. Yet the corporation is the designated vehicle for protecting Native culture, while providing jobs and an improved economic well-being.
Subsistence
A final issue of immediate and sustained concern is subsistence. Section 4(b) of ANCSA states that:
All aboriginal titles, if any, and claims of aboriginal title in Alaska based on use and occupancy, including submerged land underneath all water areas, both inland and offshore, and including any aboriginal hunting or fishing rights that may exist, are hereby extinguished.
In effect, the act abrogated all prior subsistence rights by Natives except on lands covered by the lands settlement. The amount of acreage in the settlement did not begin to cover the area used traditionally by Natives in their subsistence pursuits.
During the 1970s the subsistence issue was the subject of continued and often bitter debate throughout Alaska. In 1980 the issue boiled to the surface in Section 801(4) of ANILCA which states:
In order to fulfill the policies and purposes of the Alaska Native Claims Settlement Act and as a matter of equity, it is necessary for the Congress to invoke its constitutional authority over Native affairs and its constitutional authority under the property clause and the commerce clause to protect and provide the opportunity for continued subsistence uses on the public lands by Native and non-Native rural residents . . .
Section 804 goes on to state: 'nonwasteful subsistence uses shall be accorded priority . . .'
Urban sportsmen view the issue as totally discriminatory. In November 1982 a bitterly fought attempt to strike down state laws on subsistence was defeated decisively in a statewide election. State subsistence laws do not at present have a preferential usage clause for rural residents (Alaska Department of Fish and Game 1985). Tensions rose appreciably during the ballot fight, and the US Secretary of Interior James Watt threatened to take over management of all Federal lands in Alaska should the initiative pass. Since almost 60 per cent of Alaska will remain under Federal control after land disposals are completed, most of the state is potentially off-limits to non-subsistence, non-rural users, particularly when on[e] adds an additional 12% of Native lands. Since most rural subsistence users are Native, the issue also becomes a potentially racial one.
Subsistence is the hard core of land and cultural protection for Native Alaska (Price 1982). The continued right to use the land for survival is a fundamental part of the heritage. The problem is the wishes of other Alaskans also to use and enjoy the land. Except on Native lands, increasing numbers of Alaskans, mostly white, believe they should also have the right to consume the natural bounties of the state. As the population increases inexorably, pressures on land will become greater and the conflicts more pronounced. Alaska has so far seen only the beginnings of the fight for land and resource access.
ANCSA extinguished aboriginal land claims with a land and cash settlement. In the process, Natives within Alaska suddenly became large owners of land and capital assets and a substantial economic force for the future. With 99% of the remaining land in public hands, Natives are the only significant private land owners within the state. They are also a large private source of capital funds. Various public-policy constraints will continue to restrict rapid development of public lands in the state; pressure will therefore build for use of at least some Native lands in various resource-extraction activities. The corporate nature of settlement will reinforce a tendency toward development of Native lands; profit maximization requires a cash-economy approach to land use and a pro-development use of capital assets.
More than a decade of land-claims implementation has raised innumerable questions about the potential incompatibility of corporate structure, development, and maintenance of cultural heritage. Native dependence on the cash economy continues to increase, making pursuit of traditional activities more difficult. Village elders particularly are expressing concern with protecting Native lifestyle through an identity involving respect, food sharing, and quasi-commercial ownership of community land and materials. And yet, generation of year-round employment, requiring substantial economic activity within a capitalistic framework, is a high priority in almost every rural community.
The inherent conflicts within ANCSA are becoming more apparent each year. As the critical 1990s approach, early excitement has been replaced by uncertainty and concern. Most Natives believed that ANCSA would resolve basic issues of self-sufficiency, self-determination, and survival of cultural integrity. Instead ANCSA has evolved not as an answer, but rather as a victory flawed with ambiguities and questions. It is still too early to assess ANCSA fully; nonetheless, it is already apparent that the consequences of this act will be felt not only within the Native community but across the full spectrum of the Alaska economy.
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