Native leaders dig into issues at meeting on resources

Posted: Thursday, July 05, 2007

ANCHORAGE Alaska Native corporations have become a powerful stimulus to the states economy and have also spread their wealth widely among the 12 Native regional corporations and 200-odd village corporations.

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Some $870.2 million in natural resource earnings mostly from oil and minerals production, and timber harvesting has been shared among Alaska Native corporations since the passage of the Alaska Native Claims Settlement Act in 1971, Roberta Bobbi Quintavell, president and chief executive officer of Arctic Slope Regional Corp., told members of the Resource Development Councils annual meeting.

RDC had its largest turnout ever, almost 700, at the 2007 annual meeting held in Anchorage June 19.

ASRC earns royalties from oil production in the Alpine oil field on the North Slope, most of which must be shared with other Native corporations under requirements of the Native claims act. Quintavell said the Barrow-based regional corporation is responsible for $282 million of the $870 million of total resource extraction revenues shared among the corporations over 35 years.

Quintavell shared a podium at the RDC meeting with the chief officers of two other regional corporations engaged in natural resource development. Also presenting were Marie Greene of NANA Regional Corp., in Northwest Alaska, which is a partner with Teck Cominco in the Red Dog lead-zinc mine; and Matthew Nicolai, president of Calista Corp., covering Southwest Alaska. Calista is working with Barrick Gold in developing the Donlin Creek gold project, a potential large mine in its region.

Resource projects such as Donlin Creek will bring major benefits to urban as well as rural communities, Nicolai said.

Through their business subsidiaries, Native corporations now employ about 13,000 Alaskans, including non-Native as well as Native workers, Nicolai said.

Alaskas home-grown Native corporations are an important part of our economy and will be even more important in the future. Some of the states largest firms are now Native-owned corporations, said John Shively, who was re-elected as the RDCs president at the annual meeting.

Greene said her corporation is placing a major emphasis on education and training so its shareholders can assume more of the high-skill and highly paid jobs at the Red Dog Mine, as well as with businesses NANA owns or in which it is a joint-venture partner. These businesses include engineering companies like ASCG Inc., Dowl LLC, NANA/Colt Engineering LLC and other enterprises.

NANA shareholders already constitute about half of Teck Comincos employees at the Red Dog Mine. In addition, many local residents are employed in NANA-owned trucking, camp services and other companies that support mine operations. Red Dog, the worlds largest zinc mine, brought $18.6 million in wage income to the region in 2006 and paid $8.6 million to the Northwest Arctic Borough through in-lieu-of-tax payments, Greene told RDC members.

Sixty-two percent of the royalties NANA received from Red Dog in 2006 were also paid out to the other Native corporations under the revenue-distribution requirement.

Quintavell said that its important for development companies to understand how revenue sharing works when negotiating with an Alaska Native corporation. The fundamental result of (the revenue-sharing requirement) is that the (Alaska Native corporation) in the region where the resources are developed is in essence the managing partner on resource development for the other regions, she said.

This is an important point to understand, because you need to realize that when you are negotiating with an Alaska Native corporation for an exploration or development option on their lands, that ANC is not receiving 100 percent of the benefit of the final agreement, Quintavell said.

Still, she believes that most Native corporation partnerships with major resource companies have worked well. The habitat (in rural Alaska) has been respected by industry as well as people living there. There have been mistakes, but lessons have been learned, she told the RDC. We are optimists, but we are also realists.

ASRCs primary goal is to protect the subsistence way of life for its shareholders and to blend the values of a modern business corporation with traditional values of its Inupiat owners.

One of the major reasons for ASRCs involvement in business advocacy organizations like the RDC is to create an understanding of the concerns of rural people among businesses based in urban Alaska. Rural people are supportive of development, but they realize that benefits do not come without some costs, Quintavell said.

Nicolai said that hiring in the Yukon-Kuskokwim region by Barrick and its predecessor, Placer Dome, have done a lot to change concerns over mining held by people in the region. However, it took some persuasion and education of top executives of the mining companies before they were convinced that a local-hire policy could work, Nicolai told the RDC.

In the mid-1990s he took Jay Taylor, president of Placer Dome, to visit six villages in the region. Following that, the company agreed on the local-hire policy. Today 92 percent of the workers on the Donlin project are residents of the region and annual turnover, very high in the mid-1980s when work started, dropped to 4 percent last year, Nicolai said.

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