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Gail R. Schubert, President and CEO, Bering Straits Native Corporation

Gail R. Schubert, Laura Edmondson, and Matt Ganley

President & CEO, Chief Financial Officer, and Vice President of Media and External Affairs, Bering Straits Native Corporation

The Bering Straits Native Corporation was formed in 1971 as the regional Alaska Native corporation for the Bering Strait and Norton Sound region.  Its mission is to pursue the responsible development of its resources and other business opportunities in the state and beyond. Here, its president and CEO and other executives explain the organization’s recent economic boom and the partnership opportunities available for Chinese investors in the westernmost region of continental America

You have been with the corporation since 1992 and became president and CEO in 2010. What have been the biggest challenges and achievements during this time?

 I’ve been on the Bering Straits board of directors since 1992 when I moved back to Alaska. We went through a period of financial hardship in the early 1990s, in part because of the local economy. We didn’t have much going from a growth or economic perspective, and a lot of that was because of our financial situation. Our revenues at the time were mainly derived from our rock quarry and the hotel we have in Nome, Alaska. When I came on as president and CEO, a lot of Alaska Native Corporations were involved very successfully in the US Government’s Section 8(a) program, created under the Small Business Act, and I recognized that we could use that program to bootstrap ourselves out of the financial challenges that we were experiencing. I successfully recruited a former client of mine from when I was in private practice to join Bering Straits as our vice president of business development.

The change didn’t happen overnight. We had an 8(a) contract in Nome that we didn’t do a very good job on that created some performance and ratings issues for us. Fortunately, the person that I hired was experienced and had a lot of contacts, which are essential in securing work. We started to grow, slowly at first, and with increasing success in government contracting, we were able to hire more business development employees and people with the expertise and qualifications that Laura Edmondson, our chief financial officer, has, for example. It’s been steady growth since. We grew from a company with revenues of $10 million annually to more than $400 million in revenues this past fiscal year. This helps because Alaska is currently experiencing a recession. The last recession happened in the 1980s and it was pretty severe. People left the state, they walked away from their homes, and walked away from everything.  The difference now is that that there are a lot of Alaska companies like BSNC that are involved in performing government contract work. We all employ many people and instead of money flowing out of Alaska, we bring revenues back to the state. That has helped to moderate the negative impacts of the recession that we are in.

The corporation’s subsidiaries cover a vast range of economic sectors. What sectors have been strongest and where do you foresee the greatest potential for growth?

Tourism has been strong not only for us, but for Alaska as a whole. That has helped to cushion the recession that Alaska is in, as it did in during the recession of the 1980s. For a long time, tourism has been one of the three pillars of Alaska’s economy.  The others are oil and gas (when prices dropped, that caused the current recession), and government spending.  Historically, base operations and support were BSNC’s bread and butter, and comprised about 30 percent of our business.  We are much more diversified. And our work is not just based in Alaska.  Around 25 percent of our revenues come from the state, and we are operating internationally as well. Professional services such as information technology, environmental, security, procurement and administrative support, as well as base operations and retail and wholesale sales and distribution, are sectors where we have seen growth and will continue to do so in the short term. We are fairly well diversified in terms of our revenue sources.

“When I took over the company, we were a $10 million company; we just exceeded $400 million in revenues last fiscal year”

The corporation was selected for the Opportunity Alaska trade mission to China. What were the key outcomes of the visit and where do you envisage opportunities to expand cooperation with China?

In attending this trade mission, our goal was to get a sense of Chinese interest in Alaska and in Bering Straits. By having a broad-based collaboration of industries across the state, we sent a message to China that Alaska is open for business and looking for those opportunities.  In the mid- to long-term, we see an opportunity to partner with the Chinese for the development of key infrastructure projects like Port Clarence. We worked for over seven years to win the land rights for Port Clarence. Port Clarence was a piece of land originally selected in 1976 by our first board of directors under the Alaska Native Claims Settlements Act. At the time, it wasn’t eligible for withdrawal because of the presence of a Coast Guard Loran station that was strategically important in the Cold War due to its location — a short distance from Russia. However, the station was decommissioned in 2010 as communication and navigation technology improved.  It was then that BSNC began to work towards receiving the property, including the 7,500-foot paved airstrip that had been constructed to support the Coast Guard’s Arctic mission. The United States Congress passed legislation in early 2016 mandating transfer of the property to BSNC.

We would like to see development at Port Clarence both from a commercial and a national security perspective. It is up to the Department of Defense to decide what might be appropriate, but I do think it would be vital for the US military to have a permanent strategic presence and base in northern Alaska and the Arctic. Port Clarence is the perfect location for that, in part because of its natural deep-water harbor and close proximity to the Bering Strait, where traffic is expected to increase as the Arctic becomes more accessible to marine traffic.

Why are you seeking Chinese partners for the development of Port Clarence?

There is a really good opportunity here for Chinese investors. We don’t have the finances ourselves to develop Port Clarence, and the Chinese not only have the expertise at developing these ports, but they also have the capacity to finance it. We have not yet sat down to do a design of the port, but we are considering taking inspiration from the port of Singapore. During the trade mission, Laura Edmondson, our CFO, had the opportunity to tour the port of Shanghai, which she states was an incredible experience. They rely heavily on renewable energy like wind generation. The port is almost entirely automated, so you will rarely see any dock workers. We were inspired by this example of a safe, environmentally-friendly mega-port. We have also considered the opportunities for vessel support services in our region, including for the mining sector or in road construction, connecting Port Clarence to the existing road system.

“In the mid- to long-term, we see an opportunity to partner with the Chinese for the development of key infrastructure projects like Port Clarence”

How does Bering Straits Native Corporation balance economic growth with its commitment to preserving the values that have sustained the way of life of Alaskan people for thousands of years?

 I am Alaska Native, and I grew up in a very small village not far from Nome. I lived a subsistence lifestyle until I left for high school in Anchorage. I travel back to my village as often as I can to pick berries and see my 91-year-old mother.  In her life, and in the lives of most who still live there, subsistence plays an important role. We recognize the importance of safeguarding our culture, but also the importance of nurturing economic development. This was one of the key purposes of the Alaskan Native Claims Settlement Act, providing the tools to engage in economic growth to make our communities more self-sustaining, while ensuring that we don’t destroy the wildlife and environment. We need to ensure that our growth is managed and sustainable.

What would be your message about the Bering Straits Native Corporation?

We are open for business. There are incredible investment opportunities, not only in Alaska but also in our region specifically. We live in a global world, and investment opportunities have no borders. Port Clarence represents an important business opportunity in Alaska, and we are very interested in working with investors from China and elsewhere for this and other projects in our region.

“We live in a global world and investment opportunities have no borders”

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