INFO: Private lands logging in Alaska
6/18/97
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RELAYED TEXT STARTS HERE:
Headline: INFO: Private lands logging in Alaska
Source: Alaska Rainforest Campaign
Date: 6/18/97
FROM:
Alaska Rainforest Campaign Home Page
www.akrain.org
Logging on Private Lands: Too Much, Too Fast
The best remaining forest stands in the Alaska rainforest
are mostly privately owned: about 1.7 million acres, or
less than 10 percent of the forest. Almost all these lands
are in the hands of Alaska Native corporations, established
by Congress in 1971 and unique to Alaska. The
Native lands were selected from the Tongass and Chucagh
National Forests, but any operations on these now private
lands are exempt from many laws that protect public
resources. Though selected only 20 years ago, most of these
lands have already been or will soon be clearcut.
Without Controls, Alaska Native Corporations Log
Unsustainably
In 1971, Congress passed the Alaska Native Claims
Settlement Act (ANCSA) in order to settle Native aboriginal
claims with the federal government to clear the way for
construction of the trans-Alaska oil pipeline. The act
provided about a billion dollars in cash and allowed
selection of 44 million acres of federal land. However,
instead of creating reservations and tribal governments to
manage the lands, this law created 13 "regional
corporations" and several hundred "village corporations" in
which Natives were "shareholders." These corporations are
required to turn profits by developing lands. In the Alaska
rainforest region, the corporations selected high-value
timberlands which they could convert to cash through
logging.
Logging on Native lands only began in 1979, but in
Southeast Alaska, Native corporations have already logged
well over half their timber. In Southeast Alaska, Native
corporations were entitled to select approximately 550,000
acres. Approximately 88 percent of lands selected
by the corporations held commercial grade timber, mostly
old growth. As of 1994, more than 261,000 acres (well over
half the commercial timber on Native corporate lands) had
already been logged. These lands are widely expected to be
depleted within the next decade, leaving a period
of at least 60-80 years without potential logging revenue
from the land.
In the Prince William Sound and Western Gulf Islands area,
there are approximately 1.2 million acres of Native
corporation land, including almost all the high value
forest and wildlife habitat. In 1989, logging
started on these lands, with tens of thousands of acres
already cut and the same unsustainable logging rate
expected to continue.
Public Welfare and Resources Suffer From
Uncontrolled Logging on Private Lands
Sustained-yield management is the most rudimentary of
protections for the public welfare. It seeks to assure a
steady supply of timber over time, rather than allowing a
boom-and-bust cycle of management. However, because the
Alaska Native corporation lands are privately owned,
sustained-yield laws do not apply. The clearcutting boom is
nearing an end and a bust in timber jobs is expected, with
substantial impacts to the regional economy.
As private landowners, the corporations are also not
limited in the size of their clearcuts, with the result
that entire islands have been shorn of forest in 10-mile
long swaths. Native corporation landowners are also
only required to leave 66-foot "no-cut" buffers along
salmon streams whereas loggers on public lands must leave
100-foot strips. No protection whatsoever is required for
wildlife habitat.
Logs from private lands are not subject to requirements for
local processing. The vast majority of trees cut on Native
corporate lands have been exported "in the round," mostly
to Japan, where they have received higher prices than those
offered by local mills. Half the timber cut in Alaska every
year comes from these lands and is almost all exported
without any processing. If Alaska processed as much of its
timber as states in the Pacific Northwest, this would at
least triple the number of timber jobs. But nothing can be
done to stop exports.
Past Cutting of Alaska's Rainforest on Private Lands
Underwritten By Special Multimillion Dollar Tax Break
Native corporate logging in the 1980s was heavily
subsidized by a unique tax break which cost U.S. taxpayers
hundreds of millions of dollars in lost federal revenue.
Net operating losses (NOLs) are a loss of taxable
income as recognized by the Internal Revenue Service.
During the early 1980s, all corporations that lost money on
business ventures were allowed to sell their NOLs to other
corporations looking for tax write-offs.
After 1986, Alaska Native corporations were the only ones
in America allowed to sell NOLs, leading to a huge premium
on the value of NOL "sales." Some Native corporations in
the rainforest region responded to the opportunity by
selling their timber to a partially-owned subsidiary
at a loss, selling the tax loss to other corporate buyers,
and then reaping windfall profits when the susidiary cut
the undervalued timber.
The IRS initially challenged all these sales, but settled
most of the challenges for a tiny fraction of their value.
According to reports by the University of Alaska's
Institute for Social and Economic Research, documented
timber-based NOL sales by Alaska Native corporations cost
the U.S. treasury over $716 million. This double-dipping
deal also fueled the unsustainable logging operations.
Stunned by the huge revenue cost to the government,
Congress closed the NOL sales loophole in 1990, but the
damage had already been done to the taxpayers and to the
forest.
Murkowski Moves to Take More Public Lands for New Native
Corporations
A bill introduced in 1994 by Alaska Senator Frank Murkowski
would more than double the amount of lands held by Native
corporations. The so-called "landless Natives" bill
provides for the formation of five new Native corporations
in Southeast Alaska. It directs them to select lands
from areas Congress or the Forest Service protected from
logging because of their exceptional wildlife and fish
habitat.
Although presented as a lands claim bill for five groups of
Natives that did not qualify for village corporate status
in the 1971 settlement, lobbyists for the bill have made
clear that logging is an essential part of this new deal.
Memos from the Southeast Alaska ANCSA Lands Acquisition
Committee (SAALAC) supporting the bill indicate that the
new corporations would be allowed to select up to seven
times as much land as existing corporations, in return for
agreeing to sell their timber locally. In addition, the new
corporations would be guaranteed road access to their lands
without environmental review even if these roads cross
through Congressionally protected areas.
Proposed Raid on Protected Lands Prompts Backlash
Senator Murkowski's bill specifically directs the proposed
new corporations to select from federal lands that have
been closed to logging. These are the areas most used by
local communities for hunting, fishing and recreation.
Murkowski's proposal has sparked an outpouring of
opposition and concern from Native groups, local
communities, commercial fishing groups and sportsmen
organizations.
Interestingly, many Alaska Native organizations, including
members of the "landless" group, are concerned that their
ability to gather subsistence food would be destroyed by
logging in the areas targeted by the bill. These concerns
are backed by scientific findings that predict dramatic
declines in wildlife based on loss of habitat due to
currently scheduled logging. Additional logging,
particularly on the scale envisioned in this bill, would
utterly devastate the region's remaining wildlife
populations.