By Michael Ganley -- The rise of aboriginal corp.: What can Alaska teach us?

Aboriginal corporations are on the rise. From Baffin Island to the Delta to Whitehorse, aboriginal groups are running the drill rigs, driving the trucks and paving the roads of the territories in ever greater proportions.

It has happened most readily where land claims are settled, as aboriginal leaders make the most of the deals they’ve signed. They are able to parlay their rights over land and water into partnerships with southern companies. The second generation of entrepreneurs is dispensing with the partnering and setting out their own.

This is good news for the North, and should be celebrated and supported. There’s nothing like an ownership interest to give somebody motivation to make things better in their job, their business and their life.

With this backdrop, Denendeh Development Corp. has, for four years, been running a conference in Yellowknife for aboriginal businesses. It’s much like any other conference confab, which I guess is sort of the point. You get nametags on a lanyard and there’s ice water on the tables. The agenda includes “nutrition” breaks, where most people still choose coffee and muffins. Some of the speakers have interesting things to say, and some not so much.

This year, one of the home runs of the conference was Margaret Brown, president and CEO of Cook Inlet Region, Inc. CIRI is one of 12 regionally-based native corporations that were created in 1971 under the Alaska Native Claims Settlement Act.

Until the U.S. Congress passed ANCSA, native rights had hardly been discussed in Alaska, let alone settled. When Russia “sold” Alaska to the U.S. in 1867 for $7.2-million (U.S.), it sold whatever rights it had to Alaska, but they weren’t defined. Even when Alaska achieved statehood in 1958, the issue of native rights went unaddressed.

Alaskan land claims did not come to a head until the giant oil find at Prudhoe Bay in 1968. Visions of dollar signs began dancing in the heads of developers, politicians and the public, but a permit to construct the Alaska pipeline would not be issued until native claims were settled.

It was just the leverage Alaskan natives needed. They didn’t want oversight by the Bureau of Indian Affairs, they didn’t want reserves, and they didn’t want assimilation. They decided the best option to protect their interests was to hold land and capital in a corporate structure.

Under ANCSA, the regional corporations accepted the extinguishment of native claims in exchange for 44 million of Alaska’s 385 million acres, and $1-billion of seed money. CIRI’s portion of that, to benefit the 6,278 natives with ties to Cook Inlet, was 1.25 million acres and $78-million. Even after a bad 2008 – just like everybody else – CIRI is worth $632-million, has distributed $840-million to shareholders, and has created social service and education agencies.

CIRI companies are involved in all aspects of Alaska’s economy. They provide oilfield and heavy construction services, real estate development, tourism, telecommunications and venture capital. CIRI even has a piece of the aerospace defence market. “The corporations are economic powerhouses,” says Brown.
Brown says the key to the success comes from the corporate form, which allows for a degree of integration with the southern world. “A corporation is the way corporations talk to each other,” she says. “It’s the form that allows cooperation to happen.”

Brown urged aboriginal leaders in the North to recognize their common interests and pull together: “Collectively you can have a much stronger voice politically than you can have on your own,” she says.

She also stressed that corporations can’t do everything for a community. Non-profit and health organizations are needed to look after needs that can’t be handled by the corporate structure. She also pointed out the crucial importance that the University of Alaska has played, providing homegrown professional training.

ANCSA has had its share of criticism and has been amended many times. But it is hard to argue that the corporations have not played a huge part in improving the lot of their shareholders. As aboriginal groups here continue on their path of private enterprise, they could do worse than look to our neighbours to the west.