Management of Indian natural resources

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Management of Indian natural resources
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Table of Contents
    Front Cover
        Page i
        Page ii
    Memorandum
        Page 1
        Page 2
    Indian natural resources--opportunities for improved management and increased productivity part I: Forest land, rangeland, and cropland
        Page 3
        Page 4
        Page 5
        Page 6
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        Page 68
    Indian natural resources--part II: Coal, oil, and gas: Better management can improve development and increase Indian income and employment
        Page 69
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    Back Cover
        Page 118
Full Text

- ri fln,... -


94th Congress 1
2d Session j


MANAGEMENT OF INDIAN NATU


RESOURCES


PREPARED BY THE

COMPTROLLER GENERAL
OF THE UNITED STATES
AT THE REQUEST OF

HENRY M. JACKSON, Chairman

COMMITTEE ON INTERIOR AND
INSULAR AFFAIRS
UNITED STATES SENATE


NOVEMBER 1976


Printed for the use of the
Committee on Interior and Insular Affairs

U.S. GOVERNMENT PRINTING OFFICE


WASHINGTON : 1976


in


j. -;


79-3240



















* ** *.*



^*^
p















COMMITTEE ON INTERIOR AND INSULAR AFFAIRS

HENRY M. JACKSON, Washington, Chairman


FRANK CHURCH, Idaho
LEE METCALF, Montana
J. BENNETT JOHNSTON, Louisiana
JAMES ABOUREZK, South Dakota
FLOYD K. HASKELL, Colorado
JOHN GLENN, Ohio
RICHARD STONE, Florida
DALE BUMPERS, Arkansas


PAUL J. FANNIN, Arizona
CLIFFORD P. HANSEN, Wyoming
MARK 0. HATFIELD, Oregon
JAMES A. McCLURE, Idaho
DEWEY F. BARTLETT, Oklahoma


GRENVILLE GARSIDE, Special Counsel and Staff Director
DANIEL A. DREYFUS, Deputy Staff Director for Legislation
WILLIAM J. VAN NESS, Chief Counsel
D. MIICHAEL HARVEY, Deputy Chief Counsel
OWEN J. MALONE, Senior Counsel
R. D. FOLSOM. Counsel
W. 0. (FRED) CRAFT, Jr., Minority Counsel


(II)












MEMORANDUM OF THE CHAIRMAN


To Members of the Senate Committee on Interior and Insular Affairs:
On June 11, 1975, I asked the General Accounting Office to investi-
gate and report to the Committee on the Bureau of Indian Affairs'
efforts to encourage the development of Indian-owned natural re-
sources, focusing specifically on forestland, rangeland, cropland, oil,
gas and coal.
The first part of the report was submitted to the Committee on
August 18, 1975, and covered forestland, rangeland and cropland.
The minerals report was submitted on March 31, 1976. Because both
reports include information and recommendations of significant value
to the Congress, the Administration, Indian tribes and the general
public, I have asked that they be published as a Committee print.
The reports underscore the importance of Indian-owned natural
resources to the future of the affected tribes and to the Nation as a
whole. The reports highlight the Federal Government's failure to
manage those resources properly-an apparent breach of the fiduciary
duty owed to Indian tribes.
The reports make clear that we lack an accurate inventory of Indian
resources-seemingly a basic requirement for proper management and
development. It is difficult to imagine how realistic bidding, leasing
and development, whereby Indians would receive a fair market value
for their resources, could occur without such an inventory.
An estimate by the United States Geological Survey that Indians
may own upwards of 13 percent of the Nation's identified coal re-
sources-most of which is high grade, easily mined surface coal-
shows the potential value of that resource alone. Yet the Govern-
ment's record of mismanaging Indian coal leasing and development is
undeniable.
The reports show that resource management plans, simple lease
provisions which require Indian hiring preference in mineral industry,
plants, and inter-agency exchange of mineral development information
are lacking. All of this, plus the failure of the BIA and USGS to
monitor lease terms so as to assure timely payment of royalties reflects,
in some degree, the lack of knowledgeable mineral personnel in the
Government who are available to handle Indian resources.
Finally, the report illustrates the inflexibility of mineral leasing
regulations which require strict adherence to flat rates per ton rather
than percentage rates geared to reflect the fluctuating market price of
coal-an approach which results in substantial losses of profits to
Indian tribes and individuals.
The cropland, forest land, and rangeland report also reflects the
BIA's poor management of tribal resources. Again, inventory data is
shown to be deficient. Again, good management and planning practices
are absent. And again, the tribes lose revenue because of these failures.


(1)






2

Both reports indicate that opportunities do exist for increasing
production, revenue and employment for the Indian tribes which own
these valuable resources. The recommendations should be carefully
considered by all the parties to whom they are addressed. Hopefully,
the reports will help assure that Indian resources are better managed
in the future, not only in the interest of Indian tribes but also in the
national interest.
HENRY M. JACKSON, Chairman.








REPORT TO THE COMMITTEE ON
INTERIOR AND INSULAR AFFAIRS
UNITED STATES SENATE


l3BY THE COMPTROLLER GENERAL
M'OF THE UNITED STATES
1c'ou



Indian Natural Resources--

Opportunities For

Improved Management And

Increased Productivity

Part I: Forest Land,

Rangeland, And Cropland

Bureau of Indian Affairs
Department of the Interior
The management of Indian natural resources
has been hindered by
--limited long-term planning for resource
development,
--lack of personnel for technical assist-
ance and advice, and
--conflict of tribal or individual Indian
desires with accepted resource manage
ment practices.
This report makes numerous recommenda-
tions to help overcome these problems and
improve the management of natural resources
to increase the benefits to Indian people and
to assist in meeting the Nation's long-term
needs for food and fiber.
RED 76-8


(3)







4


01LIB
COMPTROLLER GENERAL OF THE UNITED STATES
WASHINGTON. D.C. 2OSB


B-114868


The Honorable Henry M. Jackson, Chairman
Committee on Interior and Insular Affairs
United States Senate

Dear Mr. Chairman:

This is our report on opportunities for the Department of the
Interior to improve management and increase the productivity of forest
land, rangeland, and cropland on Indian reservations. We made this review
pursuant to your June 11, 1974, request, as modified by subsequent discus-
sions with your office.

You asked us to review the Bureau of Indian Affairs' efforts to help
Indians in developing their natural resources, to provide much-needed em-
ployment to Indians and help reduce our Nation's shortages of food and raw
material. This report covers our review on 11 major Indian reservations
of the three major renewable resources--timber, range, and cropland. Our
review of energy-related resources--coal, oil, and gas--will be covered in
a separate report.

We obtained Department comments and considered them in preparing this
report. They are included as appendix II.

We invite your attention to the fact that this report contains recom-
mendations to the Secretary of the Interior. Section 236 of the Legisla-
tive Reorganization Act of 1970 requires the head of a Federal agency to
submit a written statement on actions taken on our recommendations to the
House and Senate Committees on Government Operations not later than 60
days after the date of-the report and to the House and Senate Committees
on Appropriations with the agency's first request for appropriations made
more than 60 days after the date of the report. We will be in touch with
your office in the near future to arrange for the release of the report
so that the requirements of section 236 can be set in motion.

The Congress recently established the American Indian Policy Review
Commission to study national Indian policy. When released, a copy of the
report will be given to the Commission.

Sife15ly yours, 4 4 '



Comptroller General
of the United States











C o n t e n t s

Page

DIGEST i

CHAPTER

1 INTRODUCTION 1
Significance of Indian natural resources 1
Basic responsibilities and objectives for
managing Indian natural resources 1

2 OPPORTUNITIES TO IMPROVE MANAGEMENT OF NATURAL
RESOURCES 4
Potential for increasing productivity of
Indian natural resources 4

3 MANAGEMENT OF INDIAN FOREST LAND 6
Size and importance of Indian timber
resources 6
Forest management objectives 7
Predicted timber shortage 8
Opportunities for increased production 9
Actual harvest below allowable
harvest level 10
Effectiveness of the precommercial
thinning and reforestation programs
could be improved 12
Commercial thinning not being performed 19
More dead and dying timber could be
harvested 22
Need for additional forestry staff 24
Conclusions 26
Recommendations to the Secretary of the
Interior 27
Agency comments and our evaluation 28

4 MANAGEMENT OF INDIAN RANGELAND 30
Size and importance of Indian rangeland
resources 30
Rangeland management objectives 31
Opportunities to increase rangeland
production 31
Overgrazing of Indian rangeland 32
Range improvements not properly
used or maintained 37
Limited use of Bureau training and
education programs 43
Lack of range management plans 44













Conclusions 46
Recommendations to the Secretary of the
Interior 46
Agency comments and our evaluation 47

5 MANAGEMENT OF INDIAN CROPLANDS 48
Indian croplands in perspective 48
Cropland management objectives 49
Need to develop an irrigation management
services program 50
Conclusion 52
Recommendations to the Secretary of
the Interior 52
Agency comments 52
Need to strengthen agricultural lease
procedures 52
Conclusion 53
Recommendations to the Secretary of
the Interior 53
Agency comments 54

6 SCOPE OF REVIEW 55

APPENDIX

I Letter dated June 11, 1974, from the Chairman,
Committee on Interior and Insular Affairs,
United States Senate 56

II Letter dated July 15, 1975, from the Department
of the Interior commenting on this report 58

ABBREVIATIONS

ASCS Agricultural Stabilization and Conservation Service

AUM animal unit month

BR Bureau of Reclamation

GAO General Accounting Office

IMS Irrigation Management Services


Soil Conservation Service


scs











COMPTROLLER GENERAL'S REPORT INDIAN NATURAL RESOURCES-
TO THE COMMITTEE ON OPPORTUNITIES FOR IMPROVED
INTERIOR AND INSULAR AFFAIRS MANAGEMENT AND INCREASED
UNITED STATES SENATE PRODUCTIVITY
PART I: FOREST LAND,
RANGELAND, AND CROPLAND
Bureau of Indian Affairs
Department of the Interior

DIGEST

Indian timber, range, and croplands are valuable resources
that provide Indian tribes and individual Indians with con-
siderable income and job opportunities.

--Timber receipts from 1969 to 1973 ranged between $22.5
million and $70 million.

--Ranching operations produced livestock products in 1973
valued at $64.3 million; rangeland grazing permits
produced $5.7 million.

--Indian cropland produced farm products in 1973 valued at
$259 million and rental income of about $20 million.

There are, however, opportunities to improve management of
these resources. To increase the productivity of forest
lands, the Bureau should work with the tribes to:

--Assess forest management opportunities, such as thinning
and reforestation, and develop plans to eliminate the
backlog of forest management work.

--Develop salvage plans and simplified sales procedures to
harvest dead and dying timber.

--Determine the additional staff needed to harvest the
allowable volume of timber and to perform needed forest
management work, and inform the appropriate committees
of the Congress of these needs.

--Periodically evaluate effectiveness of its efforts in
increasing timber production and report the results to
the Congress.

--Improve the financial controls over funds used for forest
management projects. (See pp. 27 and 28.)

To improve the rangeland and its productivity, the Bureau
and the tribes should reach agreement on long-term plans

Tear Sheet. Upon removal, the report
cover date should be noted hereon.







8


that provide for:

--Range and soil Inventories to determine current range
capacities and a schedule for adjusting herd sizes to
capacity.

--Grazing permit systems for limiting grazing to range
capacity and for generating funds to maintain range
improvements.

--Development and prudent use of improvements to increase
range capacity.

--The amount of Federal and tribal funding needed to develop
the improvements.

--Education programs to promote sound range management
practices.

To encourage the implementation of these plans, the Bureau
should request funding only for those range improvements that
agree with the long-term range management plans. (See pp. 46
and 47.)

To improve management of Indian cropland, the Bureau should:

--Work with Indian tribes and the Bureau of Reclamation to
plan and carry out irrigation management services on Indian
irrigation projects. (See p. 52.)

--Strengthen farm lease procedures and terms. (See p. 53.)

Management of Indian natural resources has been hindered by:

--Limited Bureau and tribe planning on how resources will be
developed on a long-term basis.

--Lack of personnel to provide tribes necessary technical
assistance and advice.

--Conflict of tribal or Individual Indian desires with
accepted resource management practices. (See p. 5.)

The Department of the Interior and the Bureau of Indian Affairs
agreed with GAO's findings and recommendations and outlined
numerous planned actions. (See app. II.)







9


CHAPTER 1

INTRODUCTION

At the request of the Committee Chairman, we have
reviewed the management of natural resources on selected
Indian reservations. This report presents the results of
our review of the three major renewable resources on Indian
reservations--timber, range, and croplands. Our review in-
cluded activities on 11 major reservations. (See scope,
ch. 6.) The results of our review of the management of coal,
oil, and gas resources will be covered in a separate report.

SIGNIFICANCE OF
INDIAN NATURAL RESOURCES

The Indians' natural resources are located on over 200
reservations in 26 States and encompass 52.5 million acres.
About 129 reservations have Indian populations of at least
200 and land of at least 1,000 acres.

Indian lands include:

--5.3 million acres of commercial forest land, which is
about 1 percent of the Nation's commercial forest land
and includes about 38 billion board feet of timber, or
1-1/2 percent of the Nation's total.

-44 million acres of rangeland, or about 5 percent of
the Nation's total.

--About 2.7 million acres of cropland, or less than
1 percent of the Nation's total.

According to the 1970 census, about 827,000 Indians
lived in the United States. In 1973 the Bureau of Indian Af-
fairs, Department of the Interior, estimated that 543,000 In-
dians were living on or near reservations. The reservation
resources provide considerable income and employment to tribes
and individual Indians.

BASIC RESPONSIBILITIES AND OBJECTIVES
FOR MANAGING INDIAN NATURAL RESOURCES

The Federal Government has, by congressional acts and
subsequent judicial decisions, assumed an obligation to aid
those Indians with whom it has established a special relation-
ship. The Government, through the Bureau, provides many serv-
ices to these people, primarily:











--Working with Indian people and other agencies to
develop programs that will lead to Indian economic
self-sufficiency.

--Advising Indian landowners how they can make the most
of their resources.

--Exercising trust responsibility for Indian lands.

The basic objectives for managing timber and rangelands
are specified in the Indian Reorganization Act of 1934
(25 U.S.C. 466) which states that:

"The Secretary of the Interior is directed to make
rules and regulations for the operation and manage-
ment of Indian forestry units on the principle of
sustained-yield management, to restrict the number
of livestock grazed on Indian range units to the
estimated carrying capacity of such ranges, and to
promulgate such other rules and regulations as may
be necessary to protect the range from deteriora-
tion, to prevent soil erosion, to assure full uti-
lization of the range, and like purposes."

In managing the Indian forest and rangeland, the Bureau
has the overall objectives of (1) preserving the land in a
perpetually productive state to insure continuous production
of timber and forage, (2) developing the resources to provide
income and employment for Indians, (3) regulating water run-
off and minimizing soil erosion, and (4) preserving and de-
veloping other values, such as wildlife and recreation.

The basic authority to help Indians manage their crop-
land is provided for in several conservation and irrigation
acts. The Bureau's overall objectives are to conserve, re-
store, and improve the land and help the Indians receive fair
returns from using or renting their lands. In carrying out
these objectives, the Bureau's activities include (1) pro-
viding for the construction, operation, and maintenance of
irrigation projects, (2) giving technical assistance to In-
dian farmers, and (3) assisting Indian landowners in leasing
their farmland for the highest economic return consistent with
prudent management and conservation practices.

Within the Bureau, management of timber, range, and
cropland is decentralized. Area directors and agency super-
intendents share responsibility for carrying out the Bu-
reau's programs. Most of the personnel are located in the
agency offices, which are usually on the Indian reservations.
These people have the immediate responsibility for managing
the natural resources. They receive technical support and
policy guidance from the area offices and Bureau headquar-
ters.







11


The land belongs to the Indian people. Therefore,
rather than strictly imposing its resource management prin-
ciples and requirements on the individual Indians and tribes,
the Bureau strives to get voluntary acceptance of sound re-
source management through such means as education and tech-
nical assistance.

The importance of voluntary acceptance has been re-
emphasized recently in the Bureau's self-determination policy.
The Secretary of the Interior recently established a task
force to develop a definition of Indian self-determination
for the Bureau's programs and provide for its application in
Federal agencies by May 1975. Although a definition had not
been finalized at the time of our review, the policy of self-
determination can be tentatively defined as a lessening of
the Bureau's paternalism to the tribes and the operation of
their programs. However, this new emphasis on self-
determination in the management of Indian timber, range, and
cropland must not ignore the trustee relationship that exists
between the Bureau and the tribes in the management of natural
resources. According to preliminary task force determinations,
this relationship requires that any actions taken regarding
the natural resources must have the mutual consent of the
Bureau and the tribe.







12

I
CHAPTER 2

OPPORTUNITIES TO IMPROVE MANAGEMENT

OF NATURAL RESOURCES

Indian timber, range, and croplands are valuable
resources that provide Indian tribes and individual Indians
with considerable income and job opportunities. The annual
receipts from timber harvested from 1969 to 1973 have ranged
between $22.5 million and $70 million. Indian ranchers use
about 90 percent of the rangeland. In 1973, Indian ranching
operations accounted for livestock products valued at
$64.3 million. In addition, rangeland grazing permits re-
sulted in revenue of about $5.7 million. During 1973 Indian
cropland produced farm products valued at $259 million and
about $20 million of rental income. Major opportunities
exist, however, to improve the management of these resources
to increase the benefits to Indian people and to help meet
the Nation's long-term needs for food and fiber.

POTENTIAL FOR INCREASING PRODUCTIVITY
OF INDIAN NATURAL RESOURCES

Timber production could be improved by (1) increasing
the timber harvest on Indian forest lands where the allow-
able harvest volume is not being achieved and (2) initiating
or increasing certain forest management practices, including
precommercial thinning and reforestation, commercial thinning,
and harvesting of scattered dead and dying timber.

The condition and productivity of the Indian rangeland
could be improved by (1) reducing overgrazing, (2) install-
ing and enforcing grazing permit systems, (3) maintaining
and effectively using range improvements, and (4) educating
cattle owners to good range management practices.

The Bureau's assistance to Indians in managing their
croplands could be improved by (1) planning and implementing
irrigation management services to improve efficiency of
water use on Indian irrigation projects and (2) developing
lease procedures and terms to insure that Indians do not
forego rental income for improvements made by renters and
financed by Federal grants.










The management of Indian natural resources has been
hindered by:

--Limited Bureau and tribe planning on how resources
will be developed on a long-term basis. Some timber
management planning has been done, but it has not
included important intensive forest management prac-
tices that could increase the productivity of Indian
forests. Planning for rangeland development and
irrigation management on croplands has also been
limited or nonexistent.

--Lack of personnel to give the tribes necessary tech-
nical assistance and advice. This has been a prob-
lem in both the timber and range programs.

--Conflict of tribal or individual Indian desires with
accepted resource management practices. This has
been more of a problem with rangeland than with tim-
berland. When conflicts arise, the Bureau is placed
in the rather awkward position of attempting to ful-
fill its legal trust responsibility and at the same
time support the concept of Indian self-determination.

There are no simple or easy answers to resolving the
conflict between the Bureau's trust responsibility and the
concept of self-determination. The Bureau has two study
groups working on aspects of this problem. In addition, the
Congress, in January 1975, established the American Indian
Policy Review Commission to:

--Study the legal history of the Federal Government's
relationships with the Indians to determine the
attributes of the unique relationship between the
Government and tribes and the land and other re-
sources they possess.

--Review the policies, practices, and structure of
the Federal agencies charged with protecting Indian
resources and providing services to Indians.

--Recommend to the Congress changes in existing laws,
policies, and practices.

The Commission is expected to complete its work in 1977.

Detailed discussions and recommendations on the Bureau's
management of Indian timber, range, and cropland resources
are included in chapters 3, 4, and 5.







14



CHAPTER 3

MANAGEMENT OF INDIAN FOREST LAND

On many Indian reservations, timber is the mainstay
of the economy and produces more jobs and income than any
other resource or industry. Opportunities exist for accel-
erating the growth and harvest of timber on Indian forest
lands. This increased production could make more jobs
available to Indians and could increase tribal income. It
could also help reduce projected national timber shortages.

SIZE AND IMPORTANCE OF
INDIAN TIMBER RESOURCES

Indians own about 5 million acres of commercially forested
lands on their reservations. The standing timber inventory
of 38 billion board feet on these Indian forests is about
1-1/2 percent of the U.S. total. A comparison between the
Indians' forest resource and that of Federal agencies and all
forest land in the Nation as of 1970 and the harvest for
that year is shown below.
Total 1970
Acres standing volume harvest

(million) (million board feet)

Indian reservation lands 5.2 38,425 744

Forest Service and Bureau
of Land Management lands 115.0 1,104,150 14,045

All U.S. lands 499.7 2,420,766 58,412

Most Indian commercial forest lands are located on 12
reservations. We visited three of these reservations: the
Yakima, Colville, and Fort Apache. These three reservations
have about one-third of the total Indian forest land and about
one-half of the total standing timber inventory. In 1973,
over one-third of the timber harvested on Indian lands was
from these three reservations. Most of the timber is harvested
on a selective-cut basis, with very little clear cutting.
The following table provides total 1973 forest data for all
reservations and specific data for the three reservations
visited.












Reservation


Acres


Total standing
volume


(million board feet)


Yakima


Colville


Fort Apache


Other reser-
vations

Total, all
reservations


494,882

802,532


719,686

2,017,100


3,244,392


5,261,492


7,796.9

5,686.1

4,380.6

17,863.6


20,067.9


37,931.5


The harvest of Indian-owned timber provides significant
revenue. In 1973 timber sales revenue totaled about $70 mil-
lion. For that year, timber sales revenue was $10.7 million
at the Yakima, $10.9 million at the Colville, and $1.9 million
at the Fort Apache reservations.

Timber provides more income than any other resource or
industry on the Yakima, Colville, and Fort Apache reservations
and provides considerable employment. The following table
shows the estimated staff-years of forest-related Indian em-
ployment on these three reservations during 1974.


Employer


Yaki ma


Reservation
Colville


Fort Apache


(staff-years)


Tribe

Bureau


Tribal-owned mills

Private mills and loggers

Total

FOREST MANAGEMENT OBJECTIVES


70

156


132

253


15

180

85

297


The Indian Reorganization Act of 1934 requires that
Indian forests be managed for a sustained production of


7


79-324 0- 76 2


1973
harvest


141.1

117.5

69.8

328.4


589.2


917.6







16


timber. In managing the forests, the Bureau has the following
objectives:

--Make the forest perpetually productive by providing
effective protection and by applying sound forest
management and economic principles to timber harvest-
ing.

--Regulate the cut to insure continuous timber produc-
tion.

--Develop the forests so the Indians may receive not
only the value of the timber but also other possible
benefits.

--Sell competitively the portion of the allowable harvest
exceeding that being used by the Indians for their
own purposes, such as in tribal-owned mills.

--Preserve the forests in their natural state when de-
sirable.

--Regulate water runoff and minimize soil erosion.

--Preserve and develop grazing, wildlife, and other
forest values.

To assist in meeting these forest management objectives,
the Bureau is required to prepare a timber management plan
for each major timbered reservation. The plan is to specify
the quantity of timber to be harvested annually and the
forest management techniques to be employed over the ensuing
10-year period. The plan is to be revised at 5- to 10-year
intervals, with annual reviews during the interim.
The Bureau and the tribes finance the cost of managing
Indian forest resources. Before fiscal year 1973, the Bureau
deducted an administrative fee from Indian timber sales re-
ceipts to cover its costs in managing the forestry program.
Beginning in fiscal year 1973, a policy change allowed the
tribes to use the administrative fees for certain forest man-
agement practices on their lands. In fiscal year 1973, the
Federal appropriation for the Bureau's forestry program was
$5.9 million and the tribes incurred costs or obligations
of $3.7 million under the administrative fee program.

PREDICTED TIMBER SHORTAGE

Demands for lumber and plywood are increasing more ra-
pidly than softwood sawtimber supplies can be made available.








17



An October 1973 Forest Service report entitled "The Out-
look for Timber in the United States" showed that, if the then
current management levels of the Nation's forests were main-
tained and if timber product prices relative to competing prod-
ucts remained the same, softwood sawtimber shortages would
start to occur during this decade and continue to increase
into the next century. The study showed, for example, that
U.S. demand for softwood sawtimber would exceed supplies
by about 9 billion board feet in 1980, by about 15 billion
board feet in 1990, and by about 18 billion board feet in
2000. For hardwood sawtimber, the report showed a surplus
in 1980, a deficit of 300 million board feet in 1990, and
a deficit of about 2 billion board feet in 2000.

Indian commercial forests contain predominantly soft-
wood tree species, such as ponderosa pine and Douglas fir,
and therefore could provide some of the needed softwood
sawtimber.

OPPORTUNITIES FOR INCREASED PRODUCTION

Opportunities exist for accelerating timber production
on Indian forest lands. These opportunities include:

--Increasing the volume of timber harvested to the level
permitted under sustained yield.

--Improving the effectiveness of precommercial thinning
and reforestation programs.

--Performing commercial thinning.

--Harvesting more dead and dying timber.

The Bureau is not taking advantage of these opportunities for
a variety of reasons, but mainly:

--It has not established specific goals and action plans
for identifying and accomplishing needed forest man-
agement work.

--It has not made any substantial effort to acquire the
personnel and funds needed to fully manage the Indian
forests.

--Tribes, in some cases, are hesitant to increase timber
harvesting.











Actual harvest below allowable harvest level

The Bureau, to insure a sustained yield of timber on
Indian lands, sets an allowable harvest--the volume of
timber that can be cut each year. From 1969 through 1973,
however, the annual volume of timber harvested on some re-
servations was consistently below the allowable harvest
level.

Each year about 110 million board feet of harvestable
timber is left in the forests on the 12 major timbered re-
servations alone. This represents about $5 million which
could have been earned by Indians if the full allowable
harvest were sold. Also, this uncut harvestable timber is
enough to construct 11,000 single-family homes. The follow-
ing table shows the harvest shortfall and estimated revenue
losses.

1969-73 average
Allowable Actual Harvest Revenue
Reservation harvest harvest shortfall losses

-- (million board feet)

Yakima 157 143.9 13.1 $ 701,990

Colville 120 111.5 8.5 497,335

Fort Apache 92 67.9 24.1 522,414

Total 369 323.3 45.7 $1,721,739

The 12 major
timbered re-
servations 896 785.4 110.2 $5,414,897

Since the value of timber has increased considerably since
1969 and the allowable harvest has recently been substantially
increased on one reservation, future revenue losses will prob-
ably be much greater than those shown above.

Yakima Reservation

The volume of timber harvested on the Yakima reservation
has consistently been less than the allowable harvest level.
To date, approximately 52 percent of the forest area has been
partially cut over and the balance is virgin. Much of the
virgin timber is overmature, slow growing, and needs to be
harvested to allow young, fast-growing stands to be estab-
lished.


10











The following table compares the allowable harvest level
and average annual actual harvest since timber harvesting was
started in 1943.

Allowable Average annual
Years harvest level volume harvested

(million board feet)

1943-52 42 13

1953-61 70 67

1962-65 136 106

1966-73 157 146

1974 186 127

According to the Bureau forest manager at the reserva-
tion, the principal reason for undercutting is the insufficient
number of forestry personnel. He stated that, to harvest a
greater volume of timber, additional trained forestry person-
nel with the capability to prepare and administer timber sales
are needed.

This lack of forestry staff has concerned tribal
members. Recently tribal officials went to Bureau head-
quarters to request additional staff for the Yakima agency.
The chairman of the tribal timber committee said that Bureau
officials told the tribal members that no additional forestry
personnel could be provided due to personnel ceilings and
fund restrictions.

Colville Reservation

As on the Yakima reservation, the volume of timber
harvested on the Colville reservation is less than the allow-
able harvest level. The allowable harvest level is currently
120 million board feet based on a timber management plan pre-
pared in 1961. From 1969 through 1973, the annual volume of
timber harvested averaged about 8 million board feet less than
the allowable level. The Bureau forest manager at the reserva-
tion stated that the lack of forestry personnel to prepare and
administer timber sales has been the limiting factor in
achieving the full allowable harvest.

Recent timber inventory data and a new allowable harvest
computation indicate that the allowable harvest level should
be increased 16 million board feet. If the new computed volume











s" a= .evt, te a -lwazle harvest will be about 136 million
:: r feet -a.n"ally. Trial officials told us that they are,
however, hesitant aut navir.g additional volumes harvested
zeca..se he believee it may result in the removal of too many
of : reservation's larger trees. They said that from an
aesthetic standpoint, they do not want a forest with smaller-
size: trees.

3:: Aar.:ne Reservation

:he a."...at a-owale harvest on the Fort Apache reserva-
tion is azc t 92 million board feet. The actual harvest
-.5, never, averaged only about 68 million board feet a
ear fo 1969 through 1973. According to Bureau forestry
officialss :tr.e fll allowable harvest has not been cut because
he tried decided to process the timber in its own mills and
because, 4.e to current economic conditions, the market for
.:5 prod- zs is not strong.

In 1970 the tribe stopped selling timber to private
zaw-.ils because it wanted to process the timber in its own
saw2ill. At that time, the tribe owned one sawmill that had a
:aaitj of only anout 60 million board feet--32 million board
feet less han the allowable harvest. The actual harvest
was, therefore, limited by the mill capacity.

:"- 1973 the tribe oegan operating two additional saw-
mills, raising the processing capability above the allowable
harvest level. The actual harvest has not yet, however, ap-
zr nej the allowaole harvest. This is occurring, according
to t.,e B.reau forest manager, because of current poor market
c:.jitions for wood products. He doubted that his forestry
staff would be large enough to harvest the full allowable
vol.e ...en. market demand improves.
C C C
E-c--iveness. cf the precommercial thinning
a.d reforestation programs could be improved

Reforestation and preconmmerical thinning are intensive
forest management practices which result in additional timber
ei-. available for future harvest. Reforestation is gen-
erally done zy planting seedlings to replace trees on lands
deforested b- timber harvesting, fire, insects, disease, and
otner causes. (Photograph 1 shows an area in 1975 that should
have ,een reforested in 1964.) Precommercial thinning in-
volves cutting a nixoer of trees on overstocked land to in-
crease the growth rate of the remaining trees. The trees
that are tninned are too small to be merchantable and are,
therefore, left in the woods. (See photographs 2, 3, and 4.)








21


1. Portion of a large area on the Fort Apache reservation
that was deforested by a forest fire in 1964. (GAO
Photograph)

The Bureau has not effectively reduced the backlog of
reforestation and precommercial thinning work. In 1973, for
example, thinning accomplishments for all reservations equaled
only about 3 percent of the total amount of precommercial
thinning needed (backlog) and the reforestation accomplish-
ments equaled only about 4 percent of the reforestation needs.
The following table shows the actual accomplishments in com-
parison with the backlog of needed work for the three reserva-
tions we visited and for all reservations.

Precommercial Thinning id Reforestation
Backlog and Accomplishments--1973


.. ... Thinning
1973
accomplishments


Reforestation
1973
Backlog accomplishments Backlog


(acres)


Yakima
Colville
Port Apache


Total


1,707
1,200
295

3,202


All reserva- 22,190
tions


4,735
115,098
107,000

226,833

749,681


128
100
167


395

5,543


1,815
12,755
13,220

27,790

132,651







22


2. Precomercial thinning is needed to increase the growth
rate of this group of trees on the Yakima reservation.


3. Portion of the Colville forest that has been preormmerically
thinned.

(GAO Photographs)








23

























I (j






















N--r "49 YEARS SLOW GROWTH

7 YEARS FAST GROWTH FOLLOWING
TIMBER STAND IMPROVEMENT

4. Cross section of tree showing the increase in growth that can be attained from thinning an
overstocked stand.


jPtioifc~yrjvf rtisi t (ii jh~ y IK hi: VOfe~ bte> Ci .











Three major factors limited the effectiveness of the
Bureau's intensive forest management work:

--Insufficient inventory data on the location, size,
and condition of areas needing intensive management
work.

--No plans and goals for reducing the backlog of inten-
sive management work over a reasonable time.

--Inadequate guidelines and financial controls over the
expenditure of funds available for intensive manage-
ment work.

Insufficient inventory data

The size of the Bureau's thinning and reforestation back-
logs is based not on forest land inventory data but on rough
estimates of how many acres need this type of work. The back-
log estimates are not regularly updated to include new areas
that have become overstocked or understocked.

On the Colville reservation, for example, an estimated
123,000 acres of land needed precommercial thinning in 1962.
This backlog acreage was based on the estimator's personal
observations and experience. The Bureau has deducted annual
thinning accomplishments from the backlog acreage but has
not added new acreage to include areas that have become
overstocked since the estimate was made. According to the
Colville forest manager, the precommercial thinning backlog
is probably significantly understated.

A similar situation exists on the Yakima reservation.
At the end of 1973, a precommercial thinning backlog of only
4,735 acres was reported. For that same year, 1,707 acres
of precommercial thinning were reported as being accomplished;
this indicated that the backlog would probably be eliminated
in about 3 years. According to the forest manager, the back-
log currently reported is based on an estimate made in 1964
without any inventory data and has not been updated as new
areas have become overstocked. The forest manager said that
the backlog figure was inaccurate and considerably more acre-
age should be included. He said that the magnitude of the
precommercial thinning needs was unknown but he estimated
that at least 20,000 acres need to de thinned.

Lack of plans and goals

In April 1973, during fiscal year 1974 hearings before
a subcommittee of the House Committee on Appropriations,







25


members of the subcommittee urged the Bureau to come forward
with a specific program, such as a 5- to 10-year program for
reducing the backlog of intensive management work. The Bu-
reau has not established annual and long-term goals for per-
forming intensive management work, nor have plans been pre-
pared on how to eliminate the work backlog.

Bureau headquarters officials said that a well-planned
program had not been developed because the Bureau does not have
sufficient resources to devote to such an effort and still
maintain current harvest levels. Bureau forest managers
stated that planning for intensive management work has been
minimal, primarily because of the low funding, poor inventory
to work from, and higher priority placed on harvesting timber.
They said that, because most of the forestry personnel are
needed for preparing and administering timber sales, little
effort can be directed toward planning intensive management
work.

Inadequate financial
advice and controls

Special funds have been available for intensive forest
management work since July 1972. At that time, the Assistant
Secretary of the Interior, Public Land Management, authorized
the Bureau to pay for timber management work, performed or
authorized by tribes, up to a maximum of 10 percent of the
revenue generated from the sale of tribal timber. Previously
an administrative fee of up to 10 percent of the timber sales
revenue was deducted and paid into the Treasury as miscel-
laneous receipts. Procedures were not, however, established
in 1972 for reviewing how the funds were being spent, and as
a result the funds have not always been used to improve the
management of Indian forest lands. A requirement that the
funds be obligated during the same year that timber sales
receipts are earned may have also contributed to the ineffi-
cient use of the funds.

The new policy substantially increased the amount of
funds available for thinning and reforestation, especially on
those reservations having high timber sales revenue. For
example, in the fiscal year preceding the policy change,
$1,307 and $3,890, respectively, were spent for intensive
management work on the Yakima and Colville reservations. As
a result of the policy change, over $l million in 10-percent
funds were available for intensive management work on each
of these reservations in fiscal year 1974.

At the time he approved the policy change, the Assistant
Secretary stated that the new policy was intended to provide







26


needed increases in funds for the forestry program which the
Department had been unable to obtain through the normal budg-
etary processes. In response to the policy change, the Bu-
reau established general guidelines for spending the 10-percent
funds, which recommended the funding of the following for-
estry activities:

--Intensive forest management practices, such as thin-
ning and reforestation.

--Timber sale administration

--Fire presuppression.

--Modernized forest management inventories and planning.

The guidelines were, however, open ended and allowed the funds
to be used for any other necessary expenses.

Procedures were not established for systematically re-
viewing how the funds were being used and we found that they
were not always being effectively used. On the Colville
reservation, for example, the Bureau reported that about
$2 million was spent for salaries, supplies, and equipment
for intensive forest management work in fiscal years 1973
and 1974. On the basis of an estimate by a Bureau forestry
official that precommercial thinning costs $50 an acre,
this money would have thinned 40,000 acres. During the
2-year period, only 3,000 acres were thinned and almost no
planting was done.

In contrast, the Bureau reported that about $168,000
was spent for intensive management work on the Yakima reserva-
tion during fiscal years 1973 and 1974. A Bureau official
said that 2,414 acres of thinning and 219 acres of planting
were accomplished with these funds. Most of the additional
10-percent funds at the Yakima reservation were reported as
being spent for timber sale administration and fire protec-
tion.

Examination of Bureau and tribal records and discussions
with Bureau and tribal officials at the Colville reservation
revealed that expenditures were made that have little or no
impact on improving the management of the reservation's forest
lands. Such expenditures during 15 months of fiscal years
1973 and 1974 amounted to about $386,000 and included such
items as:

--$25,926 for a loader tractor. This equipment is being
used at a tribally owned and operated plant where
fenceposts are manufactured.







27


--$33,165 for a combination truck, trailer, and crawler
tractor. The Bureau's Branch of Land Operations is
using this equipment to develop springs on range and
forest lands for watering cattle.

--$53,567 for a computer and parts. The computer is
used for tribal business and as a training tool for
teaching tribal members how to operate computers.

--$8,000 and $1,350 for a metal building and shag-
carpeting, respectively. The building is being used
for tribal offices.

--$39,270 for payment of the balance due on a road con-
struction vehicle costing $73,061. The tribe acquired
the vehicle to train Indian heavy equipment operators
under a Bureau-funded training contract project. The
vehicle was used for a short time in 1973 for training
and has not been used since.:

Another factor that has affected expenditures made from
the 10-percent funds is the Department's requirement that the
funds be obligated during the same year the timber sales
receipts are earned. Some Bureau and tribal officials have
criticized this requirement because the exact total of timber
sales receipts is not known until after the year has ended.
Consequently, some tribes have failed to obligate the full
10 percent of timber sales receipts. For example, at the
end of fiscal year 1974, $123,309 went to the Treasury be-
cause the Yakima tribe did not know that the amount of the
10-percent funds available would be as high as $1.1 million
until after the year ended. A tribal official said that,
because many obligations have to oe made in a short time near
the end of the year, the tribe does not have the time to plan
for the most effective use of the money.

Recently a Bureau task force studied the policies for
using the 10-percent funds and recommended that the Bureau
allow the tribes 2 years to obligate the funds. The Bureau
still is considering this recommendation.

Commercial thinning not being performed

In contrast to precommercial thinning of trees that are
too small to have merchantable value, some Indian forest land
is overstocked with young trees that are large enough to be
sold and processed into wood products.







28


5. A timber stand on the Yakima reservation that is
overstocked with trees large enough for commercial
thinning. (GAO Photograph)


Through commercial thinning sales, these trees can be removed
to improve the growth rates of the remaining trees. Although
large areas exist where commercial thinning could be done, the
Bureau has not performed this type of work. On the three re-
servations we visited, the Bureau had not determined the ex-
tent of commercial thinning opportunities nor had the Bureau
developed plans and goals for performing commercial thinning.

On the Yakima reservation, for example, the Bureau had
not determined how many acres of forest land needed commer-
cial thinning. The Bureau forest manager, however, stated
that a 100,000-acre area on the reservation had many acres
needing commercial thinning. An insect epidemic near the
end of the last century destroyed much of the original
timber stand, and now dense, overstocked, stagnated stands
of pole and small sawtimber-sized trees cover most of the
area. No commercial thinning has been done, however, and
none is planned because, according to the Bureau forest man-
ager, the number of forestry personnel is not adequate to
prepare and administer commercial thinning sales as well as
the regular timber sales.

Similar commercial thinning opportunities exist on the
Colville and Fort Apache reservations. On the Colville re-
servation, the Bureau forest manager said that, in addition


20







29


to a shortage of staff, some of the areas that need commercial
thinning do not have roads. He said that the value of the
trees that would be removed from commercial thinning would
not be sufficient to pay for the full cost of ouiidina t.-e
needed roads into the area. The manager said that Federal
funds would be needed to help pay the cost of building the
roads if a commercial thinning program were started in these
areas.

To evaluate the feasibility of commercial thinning, we
contacted a recre-entative of a larae private timber company
that owns about 260,000 acres of commercial forest land in
central Washington. The company representatives said tnat
about 2,000 acres of its land is commercially thinned each
year and a portable small log sawmill has been built to proc-
ess the logs. The representative said that, in addition to
the increased timber growth resulting from the commercial
thinning, the company is making a profit from operating the
small log sawmill. The representative said that the company
wants to purchase commercially thinned logs from both the
Yakima and Colville reservations. By locating a small log
sawmill close to a thinning operation, transportation costs


6. Portable, small log sawmill that is used for processing
logs removed from commercial thinning sales on private
forest lands. (GAO Photograph)







30



are reduced and commercial thinning becomes more profitable--
especially for thinning areas that are close to existing access
roads.

More dead and dying
timber could be harvested

Each year insects, fire, wind, and other elements kill
or damage considerable volumes of timber on Indian forest
lands. (See photographs 7 and 8.) On the Colville reserva-
tion, 47 million board feet of timber, an amount equal to
39 percent of the annual allowable harvest, dies each year.
On the Yakima reservation, the mortality averages 12 million
board feet annually. The Bureau has not established a pro-
gram for systematically harvesting this timber and, there-
fore, a large volume is not harvested and deteriorates to
tne point where it can no longer be used for lumber and ply-
wood.

A systematic program for salvaging dead and dying timber
on all accessible forest acres has not been established on
the Colville and Yakima reservations. Goals and plans have
not been established for the amount of dead and dying timber
to be salvaged each year.

Bureau forest managers said they do not have sufficient
staff to conduct both salvage and regular live timber sales.
They, therefore, concentrate their available staff on live
timber sales because a lower return is expected from salvage
sales. Under existing procedures, additional time is re-
quired to prepare and administer salvage sales due to the
scattering and low volume per acre of dead and dying timber.
The Bureau's forestry manual does not tell how sale prepara-
tion and administration procedures could be shortened for
salvage sales to make the return more comparable to that of
live timber sales.

At the Fort Apache reservation, the Bureau is develop-
ing a program for the entire forest area. The dead and dying
timber will be sold to the tribally owned mills. An esti-
mated 25 million board feet of scattered dead and dying tim-
ber will be harvested over the 5-year life of the contract.
The cutting of this timber is expected to start during 1975.

The forest manager at the Fort Apache reservation said
that he will be able to make this salvage sale because he
currently has personnel available to do the necessary sale
preparation and administration work. He said that the re-
servation's annual timber harvest has decreased since the
tribe decided to process the entire harvest in its own














7. Defoliated dead trees on the
Colville reservation


^r'
43 =B

4tiwi


8. Defoliated dead tree on the
Ebrt Apache reservation.


(GAO Photographs)


79-324 0 76 3


a.
'V -


31







32


sawmills. Likewise, this tribal decision has enabled the
Bureau to eliminate some sale administration procedures
normally used when selling timber to private companies or in-
dividuals. According to the forest manager, the combined
changes have made some of his forestry staff available for
salvage sales that would normally be needed for administering
the regular live timber sales.

The U.S. Forest Service is currently implementing recom-
mendations made in a prior GAO report i/ regarding the estab-
lishment of a systematic salvage program on its national
forests. This program is to include plans for salvaging the
maximum feasible volume of dead and dying timber. It also
will include simplified sale preparation and contract admin-
istration procedures for lowering the cost of and reducing
the time required for salvage timber sales.

Need for additional forestry staff

Bureau forest managers stated that the lack of forestry
staff has been the primary obstacle encountered in trying to
(1) meet the allowable harvest level, (2) conduct an intensive
forest management program, (3) perform commercial thinning,
and (4) harvest additional volumes of dead and dying timber.

The Yakima agency and Portland area forestry staffs
recently completed analyses of forestry staffing needs for the
Yakima reservation. The analyses indicated that an additional
26 Bureau and 9 tribal employees are needed to adequately
administer the forestry program on the Yakima reservation and
fully meet the trust responsibility to the tribe. According
to the analysis, the additional Bureau staff would annually
cost about $300,000 but would provide an increase in timber
income to the Indian owners of $4.2 million.

We compared the size of the Bureau forestry staff at
the Yakima reservation with that of a U.S. Forest Service
office. Although we did not evaluate the adequacy of the
Forest Service's operations, the comparison appeared to
confirm Bureau officials' statements that they do not have a
forestry staff large enough to fully manage the Indian forest
resource.

The Wenatchee National Forest is adjacent to the Yakima
reservation and has similar forest conditions. It has an



l/"More Useable Dead or Damaged Trees Should Be Salvaged to
Help Meet Timber Demand" (B-125053, Oct. 5, 1973).







33


allowable harvest volume of 177 million board feet compared
with the Yakima reservation's 186 million board feet allow-
able harvest. The Wenatchee National Forest has a staff of
104 employees actively engaged in timber harvesting or in-
tensive forest management activities. Many employees, such
as district rangers and engineers involved in the design and
construction of roads, also help accomplish these activities,
but for comparison, we did not count them.

Of the 104 employees, 55 are full time and permanent and
49 are part time. Of the part-time staff, 20 are permanent
and work about 11 months a year. The balance of the part-
time staff (29 employees) work about 3 months a year.

The Yakima reservation has a forestry staff of 43 em-
ployees harvesting timber or managing intensive forest acti-
vities. Of this total, 39 are full-time, permanent employees
and 4 are temporary.

When the size of the forestry staff is compared with the
allowable harvest volume, the Wenatchee National Forest has
a considerably larger staff. According to our analysis, for
a million board feet of allowable harvest volume, the
Wenatchee National Forest has about twice the staff available
as does the Yakima reservation.

With a larger forestry staff, the Wenatchee National
Forest has been able to harvest a larger volume of timber and
has accomplished more intensive forest management work, which
increases the volume of timber available for future harvest-
ing. From 1969 through 1973, the Wenatchee National Forest's
annual harvest averaged 180 million board feet. For the same
period, the Yakima reservation harvest averaged 144 million
board feet. During a similar 5-year period, I/ the Wenatchee
National Forest accomplished about the same number of acres
of precommercial thinning but did over 20 times as many acres
of reforestation. The Wenatchee National Forest was also
able to establish commercial thinning programs on some of its
districts, but the Yakima reservation has not established
such a program. Currently, the Wenatchee National Forest has
two commercial thinning sales in progress. The following
table compares the forest management activity on the Wenatchee
National Forest and the Yakima reservation.



I/The Wenatchee National Forest reports its precommecial thin-
ning and reforestation accomplishments on a fiscal year
basis; the Yakima reservation reports on a calendar year
basis.








34



Wenatchee Yakima"
National Forest Reservation

Average annual timber 180 million 144 million
harvest, 1969-73 board feet board feet

Precommercial thinning 1,615 acres 1,720 acres
(5-year average) per year per year

Reforestation 2,757 acres 138 acres
(5-year average) per year per year

Commercial thinning Two sales in progress None
4.2 million board
feet

CONCLUSIONS

Because of the opportunities for increasing Indian em-
ployment and income and for reducing the Nation's predicted,
long-term shortage of softwood sawtimber, the Bureau should
make strong efforts to accelerate timber production on Indian
forest land. Accelerating production will require improved
work planning, better financial controls, simplified timber
sales procedures, and additional staffing at some reserva-
tions.

To better direct its efforts toward management opportuni-
ties that will result in the best timber growth, the Bureau
needs to improve its planning of precommercial thinning and
reforestation work and to establish plans for commercial thin-
ning. Improved planning requires inventory data on the loca-
tion, size, and condition of areas needing thinning or refore-
station. This data should provide the basis for identifying
the best management opportunities. Long-range plans should
be established for eliminating the backlog of needed work
over a reasonable time, with emphasis on accomplishing the
best opportunities first.

Considering the importance of improving the management
of Indian forest lands, financial controls should be estab-
lished to insure that the use of 10-percent funds be limited
to those activities that contribute to better management.
Guidelines should not be open ended; they should limit the
use of the funds to specific forest management activities.
Review procedures are needed to insure that the funds are
being used in accordance with the guidelines.

Since the total amount of 10-percent funds is not known
until after the period for obligating the funds has ended,







35


the tribes do not have sufficient time to plan for the
effective use of all the funds. A Bureau task force has rec-
ommended that the tribes be allowed a longer period in which
to obligate 10-percent funds. We agree, and therefore are
not making a recommendation at this time, pending disposition
of the task force's recommendation.

The Bureau should provide for the salvage of additional
volume of dead and dying timber on Indian lands. To do this,
it needs to develop continuous salvage plans and use timber
sales preparation and administration procedures especially
tailored for the prompt salvage of scattered timber. Improved
planning and modified sales procedures should reduce the man-
power needed for a salvage sale. The Forest Service is estab-
lishing a systematic salvage program on its national forests
to increase its harvest of dead and dying timber. Consulta-
tion with the Forest Service should prove to be of value to
the Bureau in improving its salvage program.

Cutting less than the allowable harvest volume is not
in harmony with the Bureau's forest management objective
of sustained yield. The Bureau objective states that the
allowable cut will be both a limitation on and an objective
for the timber area to be treated. Bureau officials said
that the primary reason for undercutting is the lack of
forestry personnel to prepare and administer timber sales.
The Bureau also cited this reason for not developing pro-
grams, such as commercial thinning, that would increase
timber growth. Our staff analysis at a reservation showed
that the Bureau was understaffed in comparison with a nearby
national forest. An increase in staffing may therefore be
needed if Indian forests are to be more fully managed for in-
creased timber production.

The Bureau should obtain, evaluate, and report to the
Congress appropriate information on its success in accelerat-
ing timber production. Such information should give the
Congress an improved basis on which to review the Bureau's
forestry program accomplishments, to evaluate the effective-
ness of current forest policy, and to assess Bureau forestry
personnel and funding needs.

RECOMMENDATIONS TO THE
SECRETARY OF THE INTERIOR

To increase timber production on Indian forest land, we
recommend that the Secretary of the Interior direct the Bu-
reau of Indian Affairs to work with the tribes to:







36


--Assess the viability of such forest management
opportunities as precommercial thinning, commercial
thinning, and reforestation to identify the best
opportunities.

--Develop long-range work plans for eliminating the
backlog of needed forest management work over a rea-
sonable time, with emphasis on the best opportunities
first.

--Develop guidelines that limit the use of 10-percent
funds to specific forest management activities and
establish review procedures to insure the funds are
used in accordance with the guidelines.

--Develop salvage plans and use simplified timber sale
preparation and administration procedures tailored
especially for harvesting dead and dying timber.

--Determine the additional staff needed to harvest the
allowable volume of timber and to perform needed forest
management work and inform the appropriate committees
of the Congress of these needs.

--Periodically evaluate the effectiveness of its efforts
in increasing timber production and report the results
to the Congress.

AGENCY COMMENTS AND OUR EVALUATION

The Bureau and the Department agreed that the level of
effort needed to meet the objectives of sustained yield and
to achieve an allowable cut should be determined. They
said a study is now underway on an agency-by-agency basis
to do just that. The Congress will be notified of the
results.

With respect to our specific recommendations, the Bureau
said:

--It agrees that (1) the viability of forest management
techniques should be assessed, (2) long-range plans
for eliminating the backlog of needed forest manage-
ment work should be developed, (3) salvage plans
for harvesting dead and dying timber are needed, and
(4) these actions will be accomplished if adequate
resources can be made available.







37


--It believes that (1) existing guidelines for use of
the 10-percent funds are basically sound, (2) the
examples of questionable use of such funds were
caused by inadequately administering and applying
guidelines, and (3) area and agency offices will
be directed to adhere to the guidelines in the
future.

--A study is now in process to determine additional
staffing needs. The appropriate congressional com-
mittees will be so informed, but there is no com-
mitment to seek additional Federal appropriations.

--It agrees with periodically evaluating the effec-
tiveness of its efforts to increase timber production
and will report the results in its budget justifica-
tions.

If the actions planned are properly implemented, the
Bureau's management of Indian forest land should be improved.







38


CHAPTER 4

MANAGEMENT OF INDIAN RANGELAND

The rangeland and livestock operations on many reserva-
tions are an important part of the economy and provide con-
siderable employment and income. Opportunities exist to im-
prove the management of Indian rangelands to (1) better
maintain and renew the range resources and (2) increase the
livestock production. This increased production could make
more jobs and income available to Indians and help meet the
Nation's food needs.

SIZE AND IMPORTANCE OF
INDIAN RANGELAND RESOURCES

Approximately 44 million acres of rangeland on reserva-
tions in the United States are used for grazing domestic
livestock and big game animals. This is about 5 percent of
the 889 million acres of pasture and rangeland in the Na-
tion. Most Indian rangelands are located in the western
States, with about 60 percent in Arizona and New Mexico.

Indian ranchers use a majority of the rangeland, about
90 percent. In 1973, 17,910 Indian ranching operations ac-
counted for livestock products valued at $64.3 million. The
remainder of the rangeland was used by 779 non-Indian ranchers
who provided livestock products valued at $33.9 million.

The following Indian employment and income were pro-
vided by cattle operations on the Papago and Hualapai reser-
vations during calendar year 1973.

Papago Hualapai
Reservation Reservation

Cattle owners 840 78
Employees of tribal enter-
prises, other Indian ranchers,
or the Bureau (note a) 51 32
Gross income from cattle oper-
ations $1,353,000 $279,000
Income earned from grazing fees $ 12,281

a/Some double counting occurs in these figures because most
employees are also cattle owners.







39



RANGELAND MANAGEMENT OBJECTIVES

The Bureau has trust responsibility for the management
and protection of rangeland resources. The Indian Reorgani-
zation Act of 1934 directs the Secretary of the Interior to
restrict the number of livestock grazed on Indian range
units to the units' estimated carrying capacity and to
issue rules and regulations as may be necessary to protect
the range from deterioration and to insure its full use.

The Secretary has established the following objectives
to fulfill these responsibilities.

--Preserve, through proper grazing management, the land,
water, forest, forage, wildlife, and recreational
values on the reservations and improve and build up
these resources where they have deteriorated.

--Promote use of the range resource by Indians to en-
able them to earn a living, in whole or in part,
through the grazing of their own livestock.

--Provide for such administration of grazing privileges
as will yield the highest return consistent with
sustained-yield land management principles and the
fulfillment of the rights and objectives of tribal
governing bodies and individual land owners.

OPPORTUNITIES TO INCREASE RANGELAND PRODUCTION

An estimated 13 million acres, or 30 percent, of Indian
rangeland are not being properly managed and are in poor con-
dition because (1) the range has been overgrazed, (2) range
improvements have not been effectively used or maintained,
and (3) limited use has been made of training and education
programs. These problems have existed on some reservations
for years. Short-term, stopgap measures have been taken
to relieve the situation but the long-term problems still
remain. An important factor hindering the effective manage-
ment of Indian rangelands on some reservations is the
conflict of tribal or individual Indian desires with accepted
range management practices.

The Bureau estimates that, if prudent range management
practices were used and necessary range improvements made,
the grazing capacity of Indian rangelands would increase by
50 percent. Detailed studies were not available showing the
impact this increased capacity would have on beef produc-
tion. On the basis of discussions with range conserva-
tionists, agriculture professors, and extension service







40



officials, we were able to roughly estimate the beef
production potential for the Papago and Hualapai reserva-
tions. With optimum range development and proper range man-
agement, Papago beef production could be about 2.6 million
pounds a year, more than double its 1973 production of about
1.1 million pounds. Similarly, annual production on the
Hualapai reservation could be 1.2 million pounds, up from
0.3 million pounds in 1973.

We believe the Bureau and the tribes must develop long-
term range management plans to realize the potential benefits
of a renewed, high-producing range. These plans should pro-
vide for (1) range and soil inventories to determine current
range capacity, (2) timetables for adjusting herd size to
capacity, (3) grazing permit systems, (4) development and
prudent use of range improvements to raise the carrying
capacity, and (5) education programs to promote good range
management practices.

Overgrazing of Indian rangeland

Severe overgrazing deteriorates the quality of the land
and reduces its capacity to provide forage for livestock.
Range condition is expressed by comparing the present amount
and kind of forage with the desirable forage the range is
capable of producing.

--Excellent condition means the range is producing 76 to
100 percent of the desirable forage. The ground is
usually covered with mulch, rain soaks in rapidly,
and there is little or no erosion.

--Good condition means the range is producing 51 to
75 percent of the desirable forage. In this condi-
tion, about one-fourth to one-half of the more pro-
ductive plants have been replaced by less productive
plants.

--Fair condition means the range is producing only 26 to
50 percent of the desirable forage. Less desirable
and productive plants dominate the forage production.

--Poor condition means the range is producing only 0 to
25 percent of the desirable forage. Annual grasses
and weeds are abundant, and undesirable perennial
weeds and shrubs are common. The soil is poorly
protected, and severe water and wind erosion is
usually present.








41


About one-third of all Indian rangeland is in excellent
or good condition. The rest is in fair or poor condition.
Range conditions in 1973 for the seven reservations included
in our review and for all Indian rangeland follow.
Condition of rangeland
Reservation Excellent Good Fair Poor

-(percent)

Papago 0 1 33 66
Ute Mountain 6 26 42 26
Northern Cheyenne 85 5 8 2
Hualapai 21 48 25 6
Fort Belknap 16 64 18 2
Jicarilla 9 63 25 3
Southern Ute 13 49 34 4

All reservations 13 24 33 30

Bureau regulations require the agency superintendents
to use the best available technical data to establish
range carrying capacity. They are to make full use of soil-
range inventories and surveys when establishing or adjusting
the proper number of cattle to be grazed on a parcel of
land. A system of grazing permits issued by the Bureau, or
by the tribes with Bureau approval, then provides the mech-
anism to limit grazing to the range capacity.

When followed, these methods allow (1) the rangeland to
yield the highest return consistent with sustained-yield land
management and (2) the improvement or buildup of deteriorated
rangeland. These methods are not always followed, and over-
grazing continues on some reservations because of Indian
cultures and traditions, tribal conflicts, and lack of en-
forceable permit systems.

The following table shows the status of rangeland and
grazing permit systems for selected reservations.
Status of Rangeland and Permit Systems
on Selected Reservations

Reservation Overgrazed Permit system

Papago Yes No
Ute Mountain Yes No
Northern Cheyenne Yes Yes








42



Hualapai (note a) ND Yes
Fort Belknap No Yes
Jicarilla No Yes
Southern Ute No Yes

a/Although the Hualapai Reservation as a whole is under-
grazed, two of its six districts are overgrazed. There
is only limited enforcement of the permit system.

Papago Reservation

The Papago reservation, with 2.8 million acres of range-
land, is currently grazed at more than double its capacity.
A grazing permit system has never been adopted. As a result,
individual cattle owners are not bound by permits or any other
form of tribal or Bureau control.

The grazing capacity is expressed in terms of Animal-
unit-months (AUMs); that is, the amount of forage required
to feed a 1,000-pound cow for 1 month. In 1973 the cattle
owners on the reservation used about 271,000 AUMs, while
the authorized level was about 128,000.

The reservation is located in a region which endures
frequent droughts. This climate, coupled with the severe
overgrazing, has resulted in shortage of forage in recent
years and has led to the starvation death of numerous
cattle. To alleviate the problem, the Papagos have re-
quested the Bureau to provide emergency feed supplies. In
1974 the Bureau provided $67,000 for hay and arranged for
emergency water supplies.

During each drought, the Bureau advises livestock owners
to sell excess cattle and reduce herds to the range's carry-
ing capacity. However, the Indians view their cattle as
valued possessions and refuse to sell. The Indians also be-
lieve additional cattle are necessary to replace those that
die during a drought.

For over 40 years, the Bureau has been telling the tribe
that its rangeland is severely overgrazed and strong management
and control are needed to correct the problem. The Bureau's
1974 Range and Livestock Report again recommended that the
Papago Council seriously consider establishing livestock
control and range management programs to protect the range
resources and insure a reasonable measure of stability to
the livestock industry. The Bureau believed the Council
had two alternatives: (1) reduce and control livestock--the
best way to stabilize the livestock industry--or (2) continue







43



the present system--with heavy losses in range resources and
cattle, necessitating the purchase of expensive hay and sup-
plemental feed every year. The Papagos have taken no actions
to institute a livestock control program.

The foremost cause of overgrazing is a conflict between
good range management practices and Indian culture and tra-
ditions. For many years the Indians grazed cattle and horses
without being restricted by carrying capacities established
to preserve the resource. They believe the Bureau should
not impair their livelihood by imposing such grazing limits.

According to Bureau officials, the Papagos have tradi-
tionally placed a great value on owning horses. The reserva-
tion has approximately 3,440 horses which consume 1.5 times
the forage that the same number of cows consume, and they
have a very limited economic value. Some horses are needed
to work the cattle during roundups, but beyond that they are
economically useless. The officials added that 1 horse is
needed for ach 10 cows on the reservation. To effectively
operate under the current range carrying capacity, the
Indians would need about 920 horses to control the cattle.
As the number of horses increases, the number of cattle
must be decreased to remain within the grazing capacity.

The tribe strongly resists efforts to reduce the over-
grazing. According to Bureau estimates, less than 3 percent
of the cattle owners have large operations--more than 150
head of cattle. Bureau personnel said these cattle owners
were very independent and resented interference or assist-
ance from others. Although all land is tribally owned, these
cattlemen have traditionally controlled certain areas and
do not want restrictions or controls placed on their use.

According to Bureau and tribal officials, this inde-
pendence has led to conflict within the tribe. They said
that the tribal council usually represents the large cattle
owners and is not willing to restrict the grazing. The
council opposes the tribal chairman when he attempts to con-
trol grazing and reduce the number of livestock.

Because of this conflict, the tribe has been unable
to implement a permit system. Such a system would limit
grazing to the land's carrying capacity by imposing
penalties for overgrazing or misuse of the land. Without
a permit system there is no incentive for the cattle owners
to reduce the overgrazing.







44


Hualapai Reservation

The Hualapai reservation, with 805,000 acres of rangeland,
is grazed at about 83 percent of its overall capacity. How-
ever, two of its six districts are overgrazed. The tribe
has a permit system established to limit the number of
cattle in each district. According to this permit system,
cattle owners must keep their cattle within their assigned
district and cannot use range in another district. The fol-
lowing table shows the grazing status of each district during
calendar year 1973.

District Authorized AUMs Actual AUMs

1 9,144 11,730
2 10,620 13,722
3 8,880 8,082
4 10,680 7,374
5 11,520 5,382
6 9,720 3,714

Although districts 1 and 2 are overgrazed in violation
of the permit system, only limited effort is made to enforce
the permits. Tribal officials stated that they were re-
luctant to take action because many of the cattle owners are
relatives or long-time friends.

The Hualapais also have a high regard for horses and
have about 600 of them on the reservation. Although the
horses contribute to the overgrazing, their removal would
not eliminate the problem.

Other reservations

The following table shows the calendar year 1973
grazing status of the other reservations included in our
review.

Acres of
Reservation rangeland Authorized AUMs Actual AUMs

Ute Mountain 568,087 19,243 41,952
Northern Cheyenne 324,944 124,490 142,490
Southern Ute 222,709 8,648 2,840
Jicarilla 608,708 99,531 56,986
Fort Belknap 549,834 101,575 101,575

The Ute Mountain reservation is grazed at about double
its capacity and has been overgrazed every year since 1962.








45


The reservation has no permit system, and cattle owners can
use its rangeland without restriction.

In 1968 the Bureau informed the Ute Mountain Tribal
Council that it was exceeding the authorized stocking rate
by more than 100 percent. They recommended corrective ac-
tions before the cattle owners were confronted with forced
livestock sales at reduced prices or emergency purchase of
feed. The tribe has chosen to not implement these recom-
mendations, and overstocking has continued. In addition,
emergency feed grains were requested or used for each of the
last 4 years.

In October 1974 the Albuquerque area director stated
that the emergency conditions on the Ute Mountain reserva-
tion were chronic and recommended that stocking adjustments
be made. According to a Bureau range conservationist, the
tribe was not interested in following good range management
practices or listening to the Bureau's advice.

The Northern Cheyenne reservation has a grazing permit
system. It has effectively controlled grazing of permitted
cattle and horses; however, the reservation has about 1,000
unpermitted horses. A Bureau official believes they will
not cause any serious deterioration of the rangeland.

The Southern Ute, Jicarilla, and Fort Belknap reserva-
tions are not overgrazed. Each reservation has a grazing
permit system that seems to be effective in (1) limiting
the livestock to the range capacity and (2) keeping the
rangeland in good condition.

Range improvements not
properly used or maintained

Range improvements improperly used or maintained can
cause deteriorated rangeland and reduced production quality,
as on the Papago reservation. It can also result in under-
use of the rangeland and reduced production quantity, as on
parts of the Hualapai reservation. In addition, the absence
of a permit system with grazing fees can remove a source of
funds normally used for the maintenance and repair of range
improvements.
In its natural state, semiarid rangeland in the south-
west is usually lacking characteristics necessary for ef-
fective use. Due to the absence of readily available water,
such improvements as wells, pipelines, charcos, and catch-
ments are necessary. (A charco is a deep, steep-sided dirt








46



tank that functions as a trough; a catchment is an artificial
watershed allowing rain that falls on an apron to run off
and be collected in a reservoir.) In addition, such factors
as unpalatable vegetation, overuse, and the large expanses
of semiarid rangeland make such improvements as reseeded
ranges and fences necessary. Normally, the individual
operators maintain these improvements.

Papago Reservation

Between fiscal years 1959 and 1974, about $6 million of
Federal and tribal funds were spent for range and water im-
provements on the reservation. These improvements included
such things as water supply systems (wells and charcos),
reseeding, fencing, and repairs to existing improvements. A
February 4, 1974, letter from the area office range conserva-
tionist to the area director stated:

"One wonders how much longer Congress will continue
to assist the Papago people in their plight of range
and water improvement if the millions of dollars
already expended have not and are not being protected or
used properly.

"It is suggested that closer surveillance be prac-
ticed over the proper use and maintenance on these
expensive range improvements * *."
*

"These expenditures have not significantly improved
the situation on the Papago Reservation due to a
lack of livestock management. It doesn't help the
livestock operator or the range resources to drill
additional water wells when there is not adequate
forage to maintain the livestock * *."

*

"Agency personnel are diligently working and
planning immediate and future improvement projects
with the people, but for lack of time, they are
inadvertently passing over the responsibility of
stressing proper use on completed projects."

During fiscal years 1975 and 1976, the Bureau plans to
spend $1.1 million as part of a $3.6 million, 5-year com-
prehensive range and water development program specifically
authorized for the Papago reservation. The Superintendent












stated that it is extremely difficult to justify a range
rehabilitation program of this magnitude unless the tribe
and the livestock owners are willing to reduce the livestock
to the range-carrying capacity. If this is not done, the
$3.6 million program will not result in the intended long-
term improvement of the Papago range.

In addition, the Papago cattle owners have not always
maintained existing improvements. For example, in 1961 a
1,200-acre pasture was cleared of mesquite growth and re-
seeded to produce a good grazing area. This demonstration
pasture was properly fenced and well maintained for 3 years,
after which it was grazed according to a schedule which al-
lowed for optimum yield. Bureau officials stated that the
fences fell into disrepair and the grazing schedule was not
followed after the local village leader died. In November
1974 the fences still needed repair and the range appeared
to be in very poor condition.

The reservation has only a limited amount of fencing,
and much of it is not maintained. The 10 grazing-district
boundaries are fenced, but there is little fencing within
each district to help control and rotate cattle grazing.
A Bureau official indicated that each person (or district)
believes the party on the other side of the fence is respon-
sible for repairs. A primary reason for the disrepair is a
lack of maintenance funds.

Normally, the grazing fees received from a permit sys-
tem can be used to maintain range improvements. Bureau ef-
forts to institute a permit system on the reservation have
been unsuccessful because of the cattle owners' desire to
graze as many cattle as they want without interference or
control. If a grazing permit system is established, graz-
ing fees would amount to about $253,000 a year, based on
the Bureau-recommended rate of $2 per AUM. These fees would
help finance the development and maintenance of range im-
provements. A Bureau official estimated actual expenses for
operation and maintenance of improvements in fiscal years
1973 and 1974 at about $40,000 a year.

Also, Bureau officials stated that tribal officials do
not always agree with them on the location of range improve-
ments. For example, the Bureau recommended one location for
a proposed charco, while livestock operators recommended
another. The Bureau's location was based on soil composi-
tion and need; the operators' location was based only on
need. In deference to the Bureau's emphasis on Indian "self-
determination," the charco was constructed at the operators'



39


7r-324 0- 76 4








48



location, which had a sandy soil so the charco would not
retain water. Bureau officials indicated it is now worth-
less.

Hualapai Reservation

Although about $2.4 million of Federal and tribal funds
were spent on range and water improvements between fiscal
years 1959 and 1974, the reservation remains undergrazed
by 17 percent. There are no long-range plans to effec-
tively use the existing improvements or increase the livestock
to the land's carrying capacity.

For example, about 16,000 acres of the district 6
common-use rangeland that was cleared of pinon-juniper
growth and reseeded from 1953 to 1967 is not being fully
used. Such growth is removed to reduce or eliminate the
ground canopy where very little productive forage will grow.
These efforts greatly increase forage production potential.
Despite the excellent condition of this reseeded area, most
cattle owners do not use it because they do not like to
mix their cattle with cattle from the other districts.

Although improvements are not fully used and overall the
range is undergrazed, the Bureau has proposed building a
water development project on the western portion of the res-
ervation. This development would cost over $2.1 million
and would increase range capacity by about 1,300 head. A
study by the Bureau of Reclamation indicates a lack of
feasible, less expensive alternatives to this development.

Considering the lack of full use of existing improve-
ments, the overall undergrazing of the rangeland, and re-
luctance of the Hualapai cattle owners to mix their cattle
with cattle from other districts, it appears that the need
for this planned development is questionable at this time.

In addition to the failure to fully use existing range
improvements, the tribe and the Bureau do not always agree
that certain improvements are beneficial and should be
maintained. The Hualapais maintain improvements which they
believe are beneficial but ignore others they believe are
useless.

Among the maintained improvements are wells, storage
tanks, and pipelines. Catchment basins have not been main-
tained. According to the range conservationist, 13 of
these basins, funded primarily by the Bureau and costing
over $100,000, are now only 20 to 25 percent effective.







49


Although the Bureau believes these basins are useful for
catching and holding rain water, the Indians believe they
are almost worthless. Weeds and other plants are allowed
to grow through the tarred surface and defeat the purpose
of the catchments. Without maintenance, the water nourishes
the weeds and plants rather than draining into the holding
tank. Discussions with Hualapai district leaders indicated
these catchments were a waste of money because it never
rained enough to make them effective.

The Bureau is currently maintaining one catchment to
demonstrate its effectiveness in collecting water. Although
the water we observed in the catchment's holding tank was
discolored, the range conservationist said that it was fit
for cattle consumption but that the Indians were reluctant
to use it for their cattle because of this discoloration.
At the time of our review, it was too early to determine if
the Bureau's demonstration project would be successful and
eventually acceptable to the Indians.

During fiscal year 1973, the tribe's general fund con-
tributed about $6,000 of the $18,000 needed for the opera-
tion and maintenance of range improvements. According to
tribal resolutions, grazing fees collected through the per-
mit system are to be divided equally between (1) operation
and maintenance of water developments, with any excess of
this half going for range improvements, and (2) contribution
to the tribe's general fund.

Although the Bureau has recommended a grazing fee of
$2 per AUM, the tribe has set the rate at $0.29 per AUM.
This was done in accordance with the Code of Federal Regu-
lations which allows tribal governing bodies to establish
their own rate for tribally owned land and in deference to
cattle owners who complain about the high cost of grazing.

At December 31, 1973, cumulative delinquent grazing
fees for the last 5 years totaled about $3,380. Annual
grazing fees are payable in advance; however, tribal offi-
cials indicate their reluctance to take action against
those whose payments are delinquent because many of them
are relatives or long-time friends. Because of the low
grazing fee compared with the recommended rate and because
of a lack of collection and enforcement, adequate funds
for maintaining improvements were not being provided by
cattle owners.







50


9. Water catchment basin not maintained on the Hlualapal reservation.


10. Water catchment basin maintained on the Hualapai reservation.


(GAO Photographs)








51



Limited use of Bureau training
and education programs

Bureau training and education programs have received
only limited use to further develop the Indians' range man-
agement capabilities. As of December 1974, no Indians on
either the Papago or Hualapai reservations were enrolled in
range training or education programs.

Bureau officials stated that most public schools are
not resource-oriented, which tends to reduce the number of
students entering the resources field. Until recently, the
Bureau emphasized study in such fields as teaching and law.
It stated that more emphasis is now being given to the study
of natural resources.

The Bureau encourages all qualified Indians to seek
higher education. Bureau funds are available for this pur-
pose, and the individual is permitted to choose his own
course of study at a college or university.

For fiscal year 1974, the Phoenix area office was al-
located $1.2 million for higher education grants. During
that year, five Indians received education grants from the
area office to study agriculture and land management. In
the previous year, there were seven such grantees, and in
1972 there were three. Most of these students were in their
first or second year of study, and only one received a grant
for more than 1 of the 3 years.

In 1971 two Papago Indians completed a specially de-
signed range management course in Colorado. One is cur-
rently employed as the tribal herd manager, but the other no
longer works in range activities. Since that time, no
Papagos have attended formal range management courses. Bu-
reau officials said the Papagos were aware of the formal
training programs but had not shown interest in them.

The agency superintendent on the Hualapai reservation
said that, during the past 10 years, no Indians have taken
advantage of these range Management training programs be-
cause of (1) the Indians' reluctance to leave the reserva-
tion and (2) the limited effort of Bureau and tribal of-
ficials to motivate Hualapai youth to take courses in
resources management.

Bureau officials added that range educational programs
should be established at the local levels with no need to
travel from the reservation. These local programs could








52


include demonstration projects designed especially for the
local conditions.

Lack of range management plans

Range management plans generally have not been developed.
Local Bureau officials indicated a number of reasons for the
lack of current plans, including (1) higher priority work,
(2) lack of funds and manpower, and (3) attitudes of Indians.

The Bureau's Range Management Handbook states that, "to
carry out Bureau objectives for development and management of
the Indian range resource, planning is essential." Accord-
ing to this handbook, the Bureau and the tribe will jointly
prepare and approve range management plans. The plans are to
be concerned with the effective development and use of the
complete range resource through range and water improvements,
good conservation practices, Indian participation and educa-
tion, market demand determinations, effective sales techni-
ques, and a realistic enforcement program. In addition, the
plans should be prepared to assist the range user in reach-
ing a better understanding of the needs of his range and to
provide for a management goal. The handbook also indicates
that plans should be updated periodically or as conditions
change.

Papago Reservation

The reservation has no comprehensive range management
plan. In 1972 the tribe requested the Congress to fund range
improvements. This request concerned a comprehensive water,
forage, and conservation program at a total cost of $3.6 mil-
lion over a 5-year period. The benefits to be derived from
this program include (1) a more secure livestock economy,
(2) increased income to the Papago people, (3) a more
sophisticated and proven approach to range management and
range ecology, and (4) practical elimination of periodic
drought crises. While this request contained descriptions
of the range improvements and water developments the tribe
wished to make, it covered little else required in a range
management plan, such as proper stocking rates and a realistic
enforcement program.

The land operations officer said the necessary data was
available and a plan could be completed within a week; how-
ever, he believed this would be a wasted effort without
strong enforcement on the reservation.







53



Hualapai Reservation

-The latest range management plan, completed in 1937, was
a very detailed document that included a description of the
range, the economics of the livestock industry, present
methods of handling livestock, and the present and proposed
plan of management.

Local Bureau officials stated they have neither the
funding nor the manpower to update the plan. In addition,
they believe soil and range condition surveys are necessary
to properly complete a new range management plan.

The Bureau range management official at the reserva-
tion also serves as the land operations officer, the forestry
officer, and the soil conservationist. Because of his mul-
tiple duties, he is unable to direct much of his attention
to range management planning. Most of his time spent on
range management is devoted to day-to-day maintenance, com-
pletion of range and water improvements, and emergency sit-
uations.

Other reservations

Current range management plans have not been developed
for the Northern Cheyenne, Fort Belknap, Jicarilla, Ute
Mountain, and Southern Ute reservations.

The Northern Cheyenne reservation is one of the few res-
ervations without a current range and soil inventory. This
inventory is a basic document which must be completed before
a range management plan can be prepared. A Bureau official
indicated this will be one of the first tasks of a range and
soil conservationist which the Bureau is attempting to hire.

The Fort Belknap reservation has no range management
plans for two reasons: (1) a lack of manpower and funds and
(2) the Indian landowner's ability to remove his land from
a range unit. The reservation is divided into range units
which are composed of tribal, State, and individual Indian
lands. An Indian can remove his land from these units
after 6 months' notice. Bureau officials stated that long-
range planning becomes quite difficult because of this
changeable status of range units.

The Albuquerque area office range conservationist stated
that current range management plans have not been developed
on the Jicarilla, Ute Mountain, and Southern Ute reservations
because of a lack of funds and manpower.







54



CONCLUSIONS

Indians have significant rangeland resources which, if
properly managed, could provide additional employment, income,
and economic development for the Indian people and provide
additional food to help meet the Nation's needs. However,
good range management is not being practiced on some reserva-
tions because of (1) overgrazing of rangeland, (2) improve-
ments not properly used or maintained, and (3) limited use
of Bureau training and education programs.

As a result of these problems, the quality of Indian
rangeland has deteriorated. This is particularly true on
those reservations where serious overgrazing exists. In ad-
dition, the quality and quantity of cattle that a range can
produce have been directly affected by the condition and ef-
fective use of the land and its improvements.

Indian cultures and traditions contribute to the range
management problems. These philosophies sometimes run
counter to prudent range management practices. In addition,
tribal conflicts and lack of agreement between the Bureau
and the tribes add to the situation. These factors have ad-
versely affected the capability of Indian rangeland resources
to satisfy both Indian and national needs.

RECOMMENDATIONS TO THE SECRETARY
OF THE INTERIOR

To resolve these problems, we believe Bureau and tribal
officials' development and implementation of range management
plans is essential. Accordingly, we recommend that the Sec-
retary of the Interior direct the Bureau to work with the
tribes to develop long-term range management plans. These
plans should provide for agreement between the Bureau and
the tribes on:
--Range and soil inventories to determine current
range capacity.

--Timetables for adjusting herd size to capacity.

--Grazing permit systems.

--Development and prudent use of improvements to in-
crease range capacity.

--The amount of Federal and tribal funding needed to
develop the improvements.








55


--Education programs to promote good range management
practices.

To encourage the appropriate implementation of these
plans, we also recommend that the Secretary of the Interior
request funding for only those range improvements that
are in agreement with the long-term range management plans
and that he submit the plans to the Congress when request-
ing funds for range improvements.

AGENCY COMMENTS AND OUR EVALUATION

In commenting on our findings and recommendations, the
Department stated that our description of Indian rangeland
problems is accurate but that the outlook for improvement is
not optimistic for those reservations which will not imple-
ment and enforce a grazing permit system based on proper
stocking levels.

In response to our recommendations, the Bureau's cur-
rent plans include:

--Appraising ongoing soil and range inventory effort
to program its completion, on a priority basis, at
the earliest possible date.

--Freeing range conservationists from the ministerial
duties (many of which are clerical in nature) of
range permits so they can work full time on making
inventories and in management planning.

--Continuing and improving the grazing permit
systems that are in operation.

--Requiring comprehensive management plans as justi-
fication of budget requests for improvement funds,
and requiring that such improvements be based on
need and be compatible with physical location.

--Carefully evaluating requests for donated feed
grain when received and forwarding for approv-
al only those reservations that have adopted and
comply with a comprehensive management plan, which
includes an enforceable range permit system.

Proper implementation of these plans should enable the
Bureau to improve its management of Indian rangeland.








56


CHAPTER 5

MANAGEMENT OF INDIAN CROPLANDS

Indian croplands produced about $259 million of
agricultural products in 1973. About 10,500 Indian families
obtained all or part of their livelihood from farming their
land. Even though the Bureau's programs have provided needed
assistance to Indians in managing their cropland, some oppor-
tunities exist to improve these efforts. The Bureau needs
to provide irrigation management services to encourage effi-
cient use of irrigation waters, and agricultural leasing
procedures need strengthening to insure Indian landowners
do not forego rental income for land improvements made by
the renter but financed with Federal grants.

INDIAN CROPLANDS IN PERSPECTIVE

The Indians have about 2.8 million acres of cropland,
which comprises about 0.6 percent of the Nation's total
and provided about 0.3 percent of the value of crops grown
in 1969. I/ The Gila River and Yakima reservation, where
we made our review, have 8 percent of the total Indian
cropland and 23 percent of the total irrigated cropland.
Crops grown on these two reservations amounted to 15.7 per-
cent of the total crop value on all Indian reservations.
A comparison of the Nation's and the Indians' croplands and
crop values follows.

i'ype ot Within all Indian
farming Nationallyv reservations

(percent
(million acres) (million acres) of Nation)

Nonirrigated 420 1.83 0.44
Irrigated 39 .97 2.48

Total 459 2.80 .61

Total value of
crops grown $45.6 billion $136.3 million .03

During 1973 Indians farmed 638,000 acres of reservation
land--up from 535,000 acres in 1964. Their remaining crop-
lands, about 1.9 million acres, were leased to non-Indian
farmers. An additional 168,000 acres were idle. The


I/Latest year for which national statistics were available.







57


Indian landowners received $20.2 million from leasing their
crop and pasture lands in 1973.

An estimated 1,902 Gila River and 395 Yakima Indians
were employed in agricultural and related activities on
their reservations. These Indians earned an estimated
$3.5 and $1.4 million, respectively, in 1974.

Indians employed
G-ilaRiver Reservation Yakima ReservatiHon
Employed by Number Income Number Income

Bureau 43 $ 349,391 62 $ 747,408
Tribe 114 579,120 --
Private Industry
(note a) 35 100,032 46 52,368
Self-employed
(note a) 415 1,112,400 37 322,500
Farm laborer
(note a) 1,295 1,374,635 250 270,000

Total 1,902 $3,515,578 395 $1,392,276

a/Includes part-time employees.

In addition to the income from employment, the Indian land-
owners on the Gila River and Yakima reservations received
$2.4 million of cropland rental income.

CROPLAND MANAGEMENT OBJECTIVES

Various Bureau programs help the Indian people farm and
lease their lands. The Bureau's policy is to construct and
manage irrigation facilities for the just and equitable dis-
tribution of water to Indian lands. Nineteen reservations
have major Bureau-financed irrigation projects. During fis-
cal year 1973, the Bureau budgeted $18 million for construct-
ing irrigation projects and $1.6 million for project opera-
tions and maintenance.

Technical assistance for managing and leasing croplands
is provided by the Bureau's soil and water conservation,
agricultural extension, and real property management and ap-
praisal programs. The cost for this agricultural technical
assistance is not readily determinable because these programs
also provide technical assistance for the management of non-
agricultural land and other Indian resources. Total cost
for these programs, which are intended to help the Indians
conserve, restore, and improve the land and receive fair re-
turns from their use or lease, was $20.5 million during fis-
cal year 1973.







58



NEED TO DEVELOP AN IRRIGATION
MANAGEMENT SERVICES PROGRAM

The Bureau needs to identify reservation lands served
by Bureau irrigation projects which could benefit from irri-
gation management services (IMS) and plan and provide guid-
ance for implementing IMS programs. The Bureau of Reclama-
tion (BR) defines IMS as a series of practices which would
improve irrigation efficiency, such as irrigation schedul-
ing, water runoff recovery, and farm facility improvements.
IMS would not only distribute limited supplies of water to
more agricultural lands but would minimize the deteriora-
tion of productive agricultural lands by a rising water
table. l/

Since 1969 BR has begun IMS in 17 irrigation districts.
The Office of Management and Budget provided additional
momentum in 1973, when it directed BR to place greater em-
phasis on improved water management and irrigation effi-
ciency in its planning and operations. The National Water
Commission, in its report to the President and to the Con-
gress in June 1973, also voiced a need for this type of
program. Various BR and other studies concluded IMS would
allow farmers to reduce water use and the acreage affected
by a rising water table. IMS is expected to increase ir-
rigation efficiency about 20 percent annually at a cost
of $8 an acre.

Despite the apparent benefits IMS offers, the Bureau
has not started such a program. Bureau headquarters of-
ficials said the Bureau has not provided any guidance or
direction to promote or plan for IMS, because IMS probably
was not needed on its irrigation projects. They stated
that they had not fully explored BR's efforts to develop
IMS and expressed doubts whether farmers would cooperate
in implementing an IMS program.

On the YaKima reservation, IMS could increase the
amount of land used for farming. A Bureau official stated
that tne irrigation project does not have IMS because the
project's responsibility is limited to water delivery and
does not include water use management.

Productivity on 10,500 acres out of 154,800 acres
of Yakima cropland has already been adversely affected by
a rising water table, and about 300 additional acres are



I/A rising water table may increase soil salinity and harm
crop root structures.








59



being affected each year. Bureau and Soil Conservation
Service (SCS) I/ personnel attributed this, partially, to
overapplication of irrigation water.

A 1969 Bureau study estimated that annual rent for
2,282 acres of affected Yakima croplands could increase by
$66,520, if the land were reclaimed. Furthermore, rental
income could be expected to decrease if the present rate of
land deterioration were allowed to continue. According to
an agency official, some of this land was formerly used to
grow hops and annually rented for over $50 an acre. Now
these same lands are suitable only as pasture and rent for
about $2 an acre.

The study also stated that water management by the
farmers was needed to help alleviate the problem and that
the irrigation project, Bureau, SCS, and the State exten-
tion service should develop a management plan. The State
extension service started a plan but never completed or
implemented it because, according to a Bureau official,
the farmers did not believe they were over irrigating and
did not want to incur the additional labor and recordkeep-
ing costs associated with such a plan.

An alternative to IMS on the Yakima reservation would
be a drainage project to lower the area's water table. It
would cost substantially more than IMS, however. During
1970 and 1971, 934 acres were drained at about $125 per
acre. A Bureau official estimated current drainage cost
to be nearly $200 per acre.

On the Gila River reservation during 1973, only
13,083 acres of the 50,500-acre Indian portion of the San
Carlos Irrigation Project received water. These lands
produced about $4.4 million of agricultural products.
Bureau officials advised that the Bureau was not planning
or developing a reservation IMS program because it and the
tribe have been concentrating their efforts on obtaining
additional irrigation waters. They believed, however,
that IMS could stretch existing water supplies to irri-
gate substantially more acres of Indian croplands.

Despite certain tribes' beliefs and the Bureau's in-
action, the Colorado River Tribal Council recognized the
benefits of IMS as a means of improving their agricultural
economy. In 1973, the tribe, Bureau, and BR entered into
an agreement to implement IMS on the Colorado River Irriga-
tion Project.



1/Department of Agriculture.








60



Bureau officials stated that the tribe encouraged IMS
because almost all of its available water was being used
on 62,000 acres out of 103,000 acres of irrigable lands.
IMS has the potential to stretch existing water supplies
to an additional 28,000 acres of reservation land by 1978.

Conclusion

We believe that an IMS program would improve the
efficiency of Indian irrigation projects. In addition to
distributing limited supplies of water to more land, an
IMS program could minimize the deterioration of productive
agricultural land by a rising water table.

Recommendations to
the Secretary of the Interior

We recommend that the Secretary of the Interior direct
the Bureau to work with Indian tribes and the Bureau of
Reclamation to (1) identify reservation lands served by
Bureau irrigation projects which would most benefit from
IMS and (2) plan and provide guidance to implement IMS on
those reservations.

Agency comments

The Bureau agreed in principal with our recommendation
to identify reservations which can benefit from an irriga-
tion management system. It pointed out, however, that many
Indian irrigation projects provide only marginal benefits
to Indians because the land is used predominantly by non-
Indians. The Bureau believes that this factor must also
be considered in formulating recommendations for irrigation
management systems.
NEED TO STRENGTHEN
AGRICULTURAL LEASE PROCEDURES

The Bureau needs to develop lease procedures and terms
which insure that Indian landowners do not forego rental
income for land improvements made by the renter but financed
with Federal grants. These improvements have included such
things as land leveling, ground water drainage, and improv-
ing water distribution systems. In some instances Indians
accepted less than fair rental value for their agricultural
lands to help finance land improvements made by the renter.
Later, some of the renters received grants from the Agricul-
tural Stabilization and Conservation Service (ASCS), Depart-
ment of Agriculture, for making these land improvements.

On the Yakima reservation, 22 agricultural leases were
made in which the renter received ASCS land conservation







61

i

improvement grants in 1973 and 1974. We identified five
leases under which the Indian landowners will forego up to
$24,800 in rent to help finance land improvements. After
entering into the leases, the renters received nearly
$6,900 from ASCS for these same improvements. For example:

--In 1974, the Bureau determined that 79.5 acres should
rent for $3,650 a year. The approved 10-year lease
provided for an annual rent of $3,350 and included
water distribution system improvements to be made by
the renter for an estimated cost of $4,000. The In-
dian landowners would forego $300 of rental income
annually for a total of $3,000 during the 10-year
lease. After the water distribution system improve-
ments were made, the renter received a grant payment
of $2,416 from ASCS to help finance the improvements.
The lease file contained no evidence that the Indians
knew the renter intended to apply or had applied and
received ASCS financial assistance.

However, in one lease on the Yakima reservation, entered
into in 1972, the ASCS grant was considered in determining
annual rent. The lease provided that, if an ASCS grant was
not available to finance the improvements, 32 percent of the
estimated improvement cost would be amortized and deducted
from the rent. The renter received the ASCS grant in 1974,
and the Indian landowners did not have to reduce the rental
rate. We were told that this provision occurred as a result
of lease negotiations.

Conclusion

We believe the Bureau needs to insure that Indian
landowners are not unnecessarily foregoing rental income to
finance land improvements made by the renter and financed by
Federal grants.

Recommendations to the
Secretary of the Interior

We recommend that the Secretary of the Interior direct
the Bureau to develop lease procedures and terms to insure
that Indians (1) have full and complete knowledge of Fed-
eral grants involving their leased land and (2) do not un-
knowingly forego rental income for improvements made by
renters and financed by Federal grants. In this regard, it
would seem desirable for the Bureau to seek the assistance
or advice of ASCS on the development of such lease procedures.







62


Agency comments

The Bureau agreed with our recommendation and stated
that to insure that the Indian landowners have full knowledge
of their land, their options, the Federal cost share programs,
etc., each leasing office should have--either as an integral
part of the leasing staff or available on an on-call basis--
an agricultural specialist who is fully informed about the
land and available programs. The Bureau also stated that
these specialists should personally (if physically possible)
tell the owners) about their land and the options available
to them so they will be equipped to make intelligent decisions
regarding lease proposals.







63


CHAPTER 6

SCOPE OF REVIEW

We reviewed the forest management activities at the
Colville and Yakima reservations in Washington State and the
Arizona Fort Apache reservation. We reviewed the rangeland
management activities primarily at the Hualapai and Papago
reservations in Arizona and did a limited review of the Ute
Mountain reservation in Colorado and New Mexico, the South-
ern Ute reservation in Colorado, the Jicarilla reservation
in New Mexico, and the Fort Belknap and Northern Cheyenne
reservations in Montana. Cropland management was reviewed
at the Gila River reservation in Arizona and the Yakima
reservation in Washington. We also made our review at,
in addition to the applicable agency offices, the Bureau
headquarters office in Washington, D.C., and area offices
in Portland, Phoenix, and Albuquerque.

We reviewed applicable laws and regulations and the
Bureau's policies, procedures, and practices relating to
the forest, range, and cropland management activities.
We also discussed the management of these resources with
tribal officials and with Bureau officials at the head-
quarters, area, and agency offices.


























5$


79-324 0 76 S








64



APPENDIX I APPENDIX I
rNrMYV M. JACKSON, WASH.. CHAIRMAN
1, 919IBLE. NLV. PAUL J. FANNIN. AI..
FRANKIC C$I UUCH, IDAHO CUIFORD P. HANSEN. W0Y.
LFrE METCALF. MONTH. MARK 0. MATFIELD., ORE.
J. CNNEtrT JOHNSTON. JR., LA. JAMES L. IUCKLY., N.Y.
JAMES AOUEZK. S. OAK. JAMES A. MC CLURE. IDAHO I
FLOYD K. HASKELL. COLO. DEWLEYF. ARTLALET.
GAYuLeO RDce S nLSOe. WS.
HOWARD N. METZNMSAUM. OHIO COMMITTEE ON
JEIUMY T. VIKLE. SrTAF mIrECTO INTERIOR AND INSULAR AFFAIRS
WASHINGTON. D.C. 20510


June U, 1974



The Honorable Elmer B. Staats
Comptroller General of the United States
General Accounting Office
Washington, D. C. 20548

Dear Mr. Comptroller General:

As you know, due to the ever increasing demand
for energy fuels, the United States is currently experiencing
a fuel shortage. Also, to varying degrees, the Nation is
experiencing shortages of certain agricultural and meat
products, timber for home construction and other commer-
cial purposes, and other mineral resources.

The American Indians, who have long been considered
to be among the most disadvantaged Americans, have signifi-
cant land and natural resources which, if properly developed,
could play a significant role in contributing toward a reduction
in these shortages and at the same time provide much needed
employment, income, and economic development for the
Indian people. For example, Indian lands contain nearly 44
million acres of range land, 13 million acres of forests, and
1. 2 million acres of cropland. Also, a recent newspaper
article stated that over two dozen Indian reservations contain
significant reserves of oil, gas, coal, uranium, oil shale,
tar sands, and geothermal resource potential. The article
further noted that other reservations contain deposits of
copper, tungsten, iron, gold, silver, phosphate, asbestos,
and limestone.

The Committee is concerned about the energy,
mineral, food, and timber shortages facing the Nation and
the need to develop our domestic resources. Therefore, I

U.4
AP"








65


APPENDIX I APPENDIX I







would appreciate it if you would undertake a review of the
efforts of the Bureau of Indian Affairs to encourage the
development of the natural resources on Indian reservations
and, which at the same time, could provide the Indian people
wAth much needed employment, income and economic
development.

You may disclose that your review is being made at
the request of the Committee and you may obtain agency
comments on your report.

The Committee and its staff stand ready to assist
you in your efforts.

Sincerely yours,





H /Henry Jacghn
Chairman

HMJ/fgh








66


APPENDIX II APPENDIX II

i United States Department of the Interior

OFFICE OF THE SECRETARY
WASHINGTON, D.C. 20240



Mr. Henry Eschwege JUL 1 5 1975
Director, Resources and
Economic Development Division
U.S. General Accounting Office
Washington, D.C. 20548

Dear Mr. Eschwege:

This responds to your April 25, 1975, request for comments on the GAO
draft, "Indian Natural Resources--Opportunities for Improved Management
and Increased Productivity." Your report makes many valid points. BIA's
editorial suggestions were furnished previously.

Comments on the GAO recommendations follow:

Management of Indian Forest Land. BIA and the Department agree with
your point that the level of effort needed to meet the objectives of sus-
tained yield and to achieve an allowable cut should be determined. A
study is now underway on an agency-by-agency basis to do just that, and
the Congress will be notified of the results. However, there is no com-
mitment at this time to seek additional Federal appropriations for such
purposes. In some situations, the tribe may have the resources and may
be the logical party to assume the financial burden, particularly where
the potential additional revenue is substantially in excess of the added
cost required.

With respect to the recommendations appearing on pages 37 and 38 of the
draft report:

1. BIA agrees that the viability of forest management techniques
should be assessed, that long-range plans for eliminating the backlog of
needed forest management work should be developed, and that salvage plans
for harvesting dead and dying timber are needed. These actions will be
accomplished if adequate resources can be made available.

2. BIA believes that existing guidelines for use of the
10 percent funds are basically sound. The examples of questionable use
of such funds were caused by inadequate administration and application of
guidelines. Area and agency offices will be directed to adhere to the
guidelines in the future.

SCONMSERVE
AMERICA'S
Vf]ENERGY



SlSave E nergyy (dd You Se'i'r' America!

58








67



APPENDIX II APPENDIX II



3. As previously mentioned, a study is now in process to determine
additional staffing needs. The appropriate congressional committees will be
informed. But as stated before, there is no commitment to seek additional
Federal appropriations.

4. BIA concurs in periodically evaluating the effectiveness of
its efforts in increasing timber production and will report the results in
its budget justifications.

Management of Indian Rangeland. Your description of Indian rangeland
problems is accurate. The outlook for improvement, however, is not optimistic
for those reservations which will not implement and enforce a grazing permit
system based on proper stocking levels. As your report observes, BIA has
been trying for years to persuade certain tribes to use sound grazing
practices, but without success. Apparently, tribal culture and tradition
are more important than conservation of the land and improved economic return.
Viewing the situation objectively, there is no reason to expect a reversal
of past practices. Fortunately, most tribes are using a sound grazing permit
system

BIA endorses the GAO recommendations appearing on page 63. Current plans
include:

1. An appraisal of ongoing soil and range inventory effort will
be made in order to program completion, on a priority basis, at the earliest
possible date.

2. Every effort will be made to free range conservationists from
the ministerial duties (many of which are clerical in nature) of range per-
mits in order for them to spend full time on making inventories and in
management planning.

3. Grazing permit systems that are in operation will be continued,
as will efforts to improve those systems.

4. Comprehensive management plans will be required as justifica-
tion of budget requests for improvement funds. Improvements must be based
on need and must be compatible with physical location.

5. Requests for donated feed grain will be carefully evaluated
when received. They will be forwarded for approval only for those reserva-
tions that have adopted and are in compliance with a comprehensive manage-
ment plan. The management plan must include an enforceable range permit
system.

Management of Indian Croplands. BIA agrees in principal with your
recommendation on page 69 to identify reservations which can benefit from
an irrigation management system. But for the same reasons discussed under







68


APPENDIX II


APPENDIX II


Management of Indian Forest Land, there can be no commitment to seek Federal
appropriations for such purposes. Many Indian irrigation projects provide
only marginal benefits to Indians because the land is used predominantly by
non-Indians. This factor must also be considered in formulating recommendations.

BIA also agrees with your recommendation on page 71. In order to insure that
the Indian landowners have full knowledge of their land, their options, Federal
cost share programs, etc., each leasing office should have, either as an
integral part of the leasing staff or available on an on-call basis, an
agricultural specialist who is fully informed regarding the land and available
programs. That specialist should personally (if physically possible) inform
the owners) about their land and the options available to them in order to
equip them to make intelligent decisions regarding lease proposals.

We appreciate the opportunity to comment on your draft report.

Sincerely,




Director o Audit and Investigation















GAO note: Page number references in this appendix (37, 38, 63, 69. and
71) are pages 27, 28, 46, 52, and 53 in this report.






69


REPORT TO THE SENATE
COMMITTEE ON INTERIORR AND
INSULAR AFFAIRS
j BY THE COMPTROLLER GENERAL
; OF THE UNITED STATES




Indian Natural Resources--

Part II: Coal, Oil, And Gas
Better Management Can Improve

Development And Increase

Indian Income And Employment

Department of the Interior

The development of Indian mineral resources
for the benefit of American Indians has been
hindered by
--lack of resource inventories, mineral
management plans, and mineral exper-
tise within the Bureau of Indian Af-
fairs,
--no means to determine if Indian prefer-
ence in hiring lease provisions are effec-
tive,
--failure to establish a coal lease royalty
rate based on the selling price of coal,
--inadequate monitoring of lease terms
after issuance of a lease.
This report makes numerous recommenda-
tions to help overcome these problems and
improve the management of mineral resources
to increase the economic benefits to the
Indian people and help the Nation meet its
energy needs.


MARCH31,1976


RED-76-84







70



S' COMPTROLLER GENERAL OF THE UNITED STATES
12 WASHINGTON. D.C. Z048


B- 114868


The Honorable Henry M. Jackson, Chairman
Committee on Interior and Insular Affairs
United States Senate

Dear Mr. Chairman:

This report describes opportunities for the Department of the
Interior to improve development of mineral resources and increase
Indian income and employment through better management of coal, oil,
and gas resources on Indian reservations. We made this review pursu-
ant to your June 11, 1974, request, as modified by subsequent discus-
sions with your office in February 1975.

You asked us to review the Bureau of Indian Affairs' efforts to
help Indians develop their natural resources, provide much needed
employment to Indians, and help reduce our Nation's shortages of food
and raw material. This report covers our review on seven Indian res-
ervations of three major nonrenewable resources--coal, oil, and gas.
Our report on the three major renewable resources, "Indian Natural
Resources--Opportunities For Improved Management And Increased Pro-
ductivity, Part I: Forest Land, Rangeland, And Cropland" (RED-76-8),
was issued to the Committee on August 18, 1975.

In accordance with a request from your office, we have not
obtained written agency comments. However, we have informally dis-
cussed our findings with agency officials.

This report contains recommendations to the Secretary of the
Interior. Section 236 of the Legislative Reorganization Act of 1970
requires the head of a Federal agency to submit a written statement
on actions taken on our recommendations to the House and Senate Com-
mittees on Government Operations not later than 60 days after the date
of the report and to the House and Senate Committees on Appropriations
with the agency's first request for appropriations made more than 60
days after the date of the report. We will be in touch with your
office in the near future to arrange for the release of the report so
that the requirements of section 236 can be set in motion.

y yours{ Q



Comptroller General
of the United States







71


Contents
C o n t e n t s
Page

DIGEST i

CHAPTER

1 INTRODUCTION 1
Significance of Indian coal, oil,
and gas resources 1
Responsibilities and objectives for
managing Indian mineral resources 2

2 OPPORTUNITIES TO IMPROVE DEVELOPMENT OF
MINERAL RESOURCES ON INDIAN RESERVATIONS 6
Need for data on resources on
Indian lands 6
Need for mineral resource management
plans 8
Lack of minerals expertise in BIA 9
Central office expertise 10
Area office expertise 10
Agency office expertise 11
Need for procedures to exchange
mineral resource data 12
Conclusions 14
Recommendations to the Secretary
of the Interior 14

3 OPPORTUNITIES TO INCREASE INDIAN
EMPLOYMENT IN THE MINERALS INDUSTRY 16
BIA objective for Indian employment 16
Opportunities to increase Indian
employment in the minerals
industry 17
Conclusions 20
Recommendations to the Secretary
of the Interior 21

4 OPPORTUNITIES TO IMPROVE COAL-LEASE TERMS 22
Responsibilities and objectives for
leasing Indian mineral resources 22
Royalty rates should be based on the
selling price of coal 22
Coal-lease acreage limitation needs
to be reevaluated 24
Conclusions 26
Recommendations to the Secretary of
the Interior 27


79-324 0 76 6







72


5 OPPORTUNITIES TO IMPROVE LEASE
MANAGEMENT 28
USGS responsibilities for Indian
mineral leasing 28
Lack of monitoring and enforcement
of lease provisions 28
Required inspections not
performed 29
Late royalty payments and
penalties 31
Production and sales reports
not received by USGS, nonpro-
duction not verified, and
postaudits not performed 33
USGS should coordinate recla-
mation activities 35
Conclusions 37
Recommendations to the Secretary of
the Interior 38

6 SCOPE OF REVIEW 39

APPENDIX

I Letter dated June 11, 1974, from the
Chairman, Senate Committee on Interior
and Insular Affairs 40


ABBREVIATIONS

BIA Bureau of Indian Affairs

BOM Bureau of Mines

GAO General Accounting Office

USGS United States Geological Survey







73


COMPTROLLER GENERAL'S INDIAN NATURAL RESOURCES--PART II:
REPORT TO THE COMMITTEE ON COAL, OIL, AND GAS--BETTER
INTERIOR AND INSULAR AFFAIRS MANAGEMENT CAN IMPROVE DEVELOPMENT
UNITED STATES SENATE AND INCREASE INDIAN INCOME AND
EMPLOYMENT
Department of the Interior

DIGEST

Coal, oil, and gas are valuable resources that pro-
vide Indians with income and job opportunities which
will increase as resources are further developed.

Indian income from oil and gas in fiscal year 1974
amounted to about $43.1 million. Indian income from
other minerals, including a large amount from coal,
amounted to about $9.6 million during the same period.

There are opportunities to improve development of min-
eral resources, increase the economic benefits to the
Indian people, and provide the Nation with increased
energy sources. Such development can provide needed
jobs and income to Indians living on or near reserva-
tions, a jroup with a high rate of unemployment.

The Bureau of Indian Affairs has placed limited empha-
sis on developing Indian coal, oil, and gas resources.
For example (1) the amount of mineral resources on
most reservations is unknown, (2) planning for miner-
als resource development has not been adequate, (3)
the Bureau does not have sufficient personnel with
minerals expertise, and (4) information on experience
gained during minerals development has not been ex-
changed among Bureau field offices.

To improve development of mineral resources, the
Secretary of the Interior should direct the Commis-
sioner of the Bureau of Indian Affairs to:

--Develop complete minerals inventories for all res-
ervations having such resources.

--Develop, through use of available resource infor-
mation, mineral management plans taking into
consideration the wishes of the Indian people,
and update these plans as additional information
becomes available.

--Determine the mineral expertise staffing the
Bureau needs to adequately fulfill its trust
responsibilities at its headquarters and field

Tuar She Upon removal, the report RED-76-84
cover date should be noted hereon.







74


locations and take the steps necessary to meet these
needs. If it is not feasible to have mineral experts
at all mineral developing reservations, alternatives
should be considered such as using a minerals task
force or consultants.

--Establish procedures to exchange and distribute
between area and agency offices information relating
to experience gained by the tribes in developing min-
eral resources.

--Update and maintain the Bureau's operations manual
and expedite revisions to the Code of Federal Regula-
tions when changes are necessary. (See pp. 14 and 15.)

Indian employment in the mineral industry was substan-
tially higher on those reservations GAO visited that
had established specific requirements for Indian pref-
erence in hiring and followup procedures.

To increase Indian employment in the minerals industry,
the Secretary of the Interior should direct the Commis-
sioner of the Bureau of Indian Affairs to:

--Establish specific requirements in all Indian mineral
leases for Indian preference in hiring as well as
procedures for lessees to regularly report to the
Bureau and the tribes on the status of Indian
employment.

--Establish procedures for either the Bureau or the
tribe to insure that Indian preference in hiring
provisions and requirements are being followed.
(See p. 21.)

Thirteen of the 16 Indian coal leases GAO reviewed had
fixed royalty rates and, therefore, the income per ton
produced did not rise during periods of rising coal
prices. Also, the Bureau had, in many cases, leased
in excess of a 2,560-acre limitation, provided in the
Code of Federal Regulations, without adequately docu-
menting the reasons for approving the excess.
To help insure that the Indian people benefit from the
increasing value of their coal resources and to improve
coal-lease management, the Secretary of the Interior
should direct the Commissioner of the Bureau of Indian
Affairs to:







75


--EstaDlish a coal-lease royalty rate policy based on
a percentage of the selling price of coal, with a
fixed amount (floor) below which the price cannot
fall.

--Determine whether the 2,560-acre limitation and the
criteria for exceeding the limitation are valid; if
it is found that they are no longer valid, act to
revise the Code of Federal Regulations accordingly.
In making this determination, factors to be considered
in determining the number of acres to be leased should
be identified. This recommendation should be carried
out with the assistance of the Geological Survey.

--Insure that the Bureau's lease files are adequately
documented to support all actions. (See p. 27.)

The Geological Survey has not adequately fulfilled its
responsibilities for mineral resource development on
Indian reservations. For example, it has not (1) per-
formed all required oil and gas lease site inspections,
(2) properly monitored royalty payments and operating
reports, (3) verified lessee reports that oil and gas
wells are not producing, and (4) postaudited most lease
accounts to insure that Indians receive all royalties
due.

To improve Geological Survey management of leases for
Indian mineral lands the Secretary of the Interior
should require the Director of Geological Survey to:

--Establish a penalty fee for late payment of royalties
and enforce such requirements as necessary.

--Instruct lessees to submit reports required by Fed-
eral regulations and lease terms when they are due
and require purchasers of Indian mineral resources
to submit reports on products purchased.

--Establish procedures to coordinate reservation
reclamation activities among the various agencies
involved with this activity on each reservation.

--Determine the staffing level necessary to satis-
factorily perform its mineral responsibilities
for Indian lands and take the steps necessary to
obtain such staffing.

--Require its field offices to verify on a random
basis that oil and gas wells reported to be shut
down are no longer producing.


Tear Sheet







76


--Perform all required oil and gas site inspections.
--Postaudit all Indian oil and gas lease accounts.
(See p. 38.)
At the Committee's request, GAO did not obtain written
comments from Interior but the report was informally
discussed with agency officials.







































iv







77


CHAPTER 1

INTRODUCTION

At the request of the Chairman, Senate Committee on
Interior and Insular Affairs, we have reviewed the management
of natural resources on selected Indian reservations. This
report presents the results of our review of three major non-
renewable mineral resources--coal, oil, and gas--on seven
Indian reservations. (See scope, ch. 6.)

Although we directed our review to the development of
coal, oil, and gas resources, many of the problems we iden-
tified may relate to other minerals and, accordingly, our
recommendations may also relate to other minerals. The re-
sults of our review on the management of the three major re-
newable resources on Indian reservations--timber, rangeland,
and croplands--were previously reported to the Committee in
our report, "Indian Natural Resources--Opportunities For Im-
proved Management And Increased Productivity Part I: Forest
Land, Rangeland, And Cropland" (RED-76-8, Aug. 18, 1975).

SIGNIFICANCE OF INDIAN COAL, OIL,
AND GAS RESOURCES

According to the Federal Energy Administration, as a
result of a growing population, increasing industrialization,
and greater affluence, the U.S. demand for energy has grown
at an annual rate of 4 to 5 percent for the past 10 years.
U.S. per capital energy consumption is eight times the aver-
age of the rest of the world. In 1973 imports of crude oil
and petroleum products accounted for 35 percent of total do-
mestic petroleum products consumption.

Since the oil embargo in 1973, the United States has
experienced energy shortages and greatly increased prices for
energy materials, particularly petroleum products. The em-
bargo also produced an awareness of the potential costs of
increased dependence on foreign energy sources. In response
to these problems, the President in November 1973 established
the goal of U.S. energy independence by 1980. The President
has also called for a doubling of coal production by 1985.

Mineral resources such as coal, oil, and gas have been
located on Indian reservations. Although the exact amounts
of such resources are unknown, the U.S. Geological Survey
(USGS), Department of the Interior, estimated that oil and
gas resources are on 40 reservations in 17 States. These res-
ervations contain about 39.1 million acres of land. Oil re-
sources on these lands, as of November 1973, were estimated
at about 4.2 billion barrels and gas resources at about







78


17.5 trillion cubic feet. USGS estimates Indian oil and gas
reserves to amount to about 3 percent of the Nation's total
reserves.

USGS also estimated that 33 reservations in 11 States
containing a total of 34.5 million acres, have sizable coal
reserves. As of January 1975, USGS estimated that these lands
contain from 100 to 200 billion tons of identified coal re-
sources--about 7 to 13 percent of the Nation's identified coal
resources of 1,581 billion tons. An October 1975 Federal Trade
Commission staff report, "Mineral Leasing on Indian Lands,"
reported that Indian lands may contain more than one-tenth of
the Nation's currently minable coal reserves.

According to the 1970 census, there were about 827,000
Indians in the United States. In 1973 the Bureau of Indian
Affairs (BIA), Department of the Interior, estimated that
543,000 Indians were living on or near reservations. Mineral
resources development on reservations can thus provide sub-
stantial income and employment opportunities to the Indians.

RESPONSIBILITIES AND OBJECTIVES FOR
MANAGING INDIAN MINERAL RESOURCES

The Federal Government, as a result of congressional ac-
tions and judicial decisions, is obligated to aid American
Indians. The Department of the Interior, through BIA, pro-
vides services to Indians, including

--working with Indians and other Federal agencies to de-
velop programs to improve Indian economic conditions,
--advising Indian landowners on how to make- the most of
their resources, and

--exercising trust responsibility for Indian lands.

BIA and USGS share responsibility for managing mineral
resources on Indian reservations. BIA, as trustee of Indian
land, is responsible for all phases of minerals management
through the leasing process. USGS is responsible for certain
aspects of the management of minerals on Indian reservations,
including
--advising BIA and the Indian people on the adequacy of
lease provisions,

--monitoring mineral development operations,







79



--computing, verifying, and collecting royalties for
the Indian people, and

--monitoring reclamation of Indian lands.

Authority for leasing Indian lands for mineral develop-
ment is contained in 25 United States Code 396 and 396a. Spe-
cific objectives for managing mineral resources are included
in BIA's "Indian Affairs Manual" (54 IAM, ch. 6) which states,

"Indian tribes and individual Indians should be
encouraged to lease their trust and restricted
land for oil and gas development with the aim of
obtaining a maximum recovery and income consistent
with a sound conservation program."

This section covers oil and gas development; however, BIA in-
structions also direct that the same objectives apply to other
minerals.

BIA and USGS program management of mineral resources is
decentralized. BIA's overall organization consists of the
central office in Washington, D.C.; area offices; and sub-
ordinate field installations (agency offices) located through-
out the United States. BIA officials informed us that the au-
thority of the Commissioner of BIA to act on behalf of the
Secretary of the Interior regarding Indian mineral resources
development has been delegated to BIA area offices and, in
most cases, further delegated to BIA agency offices. USGS
authority regarding Indian mineral resources also has been
delegated to its regional and area offices.

BIA does not impose strict mineral management principles
on the Indians; rather, it attempts to get voluntary acceptance
of sound mineral management through such means as technical
assistance.

The importance of voluntary acceptance was reemphasized
in the Indian Self-Determination and Education Assistance Act
of January 4, 1975 (Public Law 93-638). This act is intended
to provide, among other things:

--Maximum Indian participation in the government and edu-
cation of the Indian people.

--Full participation of Indian tribes in Government pro-
grams and services for Indians.

--A program of assistance to upgrade Indian education.




*I



80



One of the act's more important features is that it allows
tribes to directly contract with BIA for the administration of
programs serving them. Also, the Secretary of the Interior is
not authorized to enter into any contract which would impair
his ability to discharge his trust responsibilities to any
Indian tribe or individual. It appears, therefore, that any
actions taken regarding mineral resources should have the mu-
tual consent of BIA and the participating tribes.

On January 26, 1976, the Secretary of the Interior an-
nounced a new comprehensive Federal coal lease policy to pro-
mote the orderly development of public energy resources. The
policy, to be implemented on a gradual basis, is designed to:

--Help keep national energy costs down by permitting
timely and efficient development of Federal coal by
leasing only when needed.

--Provide a balance between national policy requirements
for using the Nation's most abundant fossil fuel and
preservation of the environment.

--Discourage private holdings of excessive reserves of
Federal coal by implementing diligent development regu-
lations requiring timely development or relinquishment.

--Provide for issuance of preference rights leases under
a new definition of commercial quantities. (Preference
rights leases are issued to prospecting permit holders
who show that lands under the permit contain coal in
sufficient quantities to support a commercial opera-
tion.)

--Return fair market value to the taxpayer through com-
petitive bid sale of coal leases.

--Public participation in the Federal coal decision
process.

The Secretary stated that there is no reason for Indian tribes
to fear that their coal resources will be developed without
their full concurrence and, as trustee for the various tribes,
it/is the Department's responsibility to insure that Indian
desires regarding coal development are met. He said that the
Department will approve coal leasing on Indian lands where

--the tribal or individual Indian landowner desires to
dispose of the coal;

--the terms and conditions of the lease are in the best
interest of the Indian landowner; and







81


--appropriate environmental protection and reclamation
safeguards are imposed on the lessee.

Also, on January 2, 1975, the Congress enacted Public
Law 93-580, establishing the American Indian Policy Review
Commission. The consensus of the Congress in establishing
the Commission was that Indian policy had been shaped by a
fragmented approach which inhibited Indian development and
did not consistently attempt to achieve Indian self-suffi-
ciency. The Commission's primary purpose is to review the
legal and historical background which serves as the basis
for the unique relationship between the Indian people and
the Federal Government.

The Commission will, among other things, investigate and
study

-the relationship between the Federal Government and
the Indian tribes and the land and other resources
they possess and

--the policies, practices, and structure of the Federal
agencies charged with protecting Indian resources and
providing services to Indians, including a management
study of BIA making use of experts from the public and
private sector.

The Commission is expected to issue its final report no
later than June 30, 1977.





II

82


CHAPTER 2

OPPORTUNITIES TO IMPROVE DEVELOPMENT

JF MINERAL RESOURCES ON INDIAN RESERVATIONS

Mineral resources on Indian reservations have provided
Indians with substantial amounts of income and job opportuni-
ties. Total income, including rents, royalties, and bonuses,
from oil and gas resources in fiscal year 1974 amounted to
about $43.1 million. Income from other minerals, including
a large amount from coal, amounted to about $9.6 million. BIA
could not tell us the amount of income relating specifically
to coal. Although there was no means to determine the number
of Indians employed in the minerals industry on most of the
seven reservations in our review, we did identify about 800
Indians employed in the industry earning about $9 million
annually. Additional opportunities exist to improve the de-
velopment of these resources, increase benefits to the Indian
people, and at the same time provide additional energy
sources.

BIA has placed limited emphasis on developing mineral
resources on Indian reservations. We found that

--inventories of mineral resources on Indian reserva-
tions do not exist;

--mineral resource development plans have not been
prepared;

--expertise within BIA to help Indian tribes develop
mineral resources has not been provided; and

--information on minerals development has not been ex-
changed among BIA offices.

NEED FOR DATA ON RESOURCES
ON INDIAN LANDS

On the seven reservations we visited, BIA had not made
a complete inventory (estimated amount of reserves) of min-
eral resources. However, on the Osage Reservation, BIA's
agency superintendent said that information on mineral re-
sources was adequate, with the exception of natural gas.

BIA officials said a mineral resources inventory is the
starting point for mineral management planning. Such plans
provide an appropriate course of action to follow in devel-
oping mineral resources. A BIA central office official told
us, however, that initial inventory studies were not initiated


6



















-J







83



until August 1974 because mineral development had been a low
priority. A June 27, 1974, BIA memorandum from the Director,
Office of Tribal Resources Development, to the Commissioner
of BIA stated:

"Data on the availability of energy resources on
Indian lands is urgently needed. It is needed
both by our tribal governments and by us in order
that the tribes, for economic development reasons,
and ourselves, for trust and planning reasons, can
intelligently determine priorities, plans and
budgets for the development of these resources."

BIA's fiscal year 1975 appropriation included $1 million
to conduct a minerals inventory. BIA, USGS, and the Bureau of
Mines (BOM) agreed to make an information search and summary
of mineral resources on 17 reservations covering about 9.7
million acres of land. The studies were designed to identify,
evaluate, and summarize mineral information from published lit-
erature, computer data files, and unpublished sources. BIA
officials said the initial studies were completed in July 1975
at a cost of about $500,000. Three of the reservations in our
review--the Crow, Northern Cheyenne, and Uintah and Ouray Re-
servations--were included in these studies.

BIA, USGS, and BOM have agreed to continue the minerals
inventory project in fiscal year 1976. They will continue the
information search and summary on 23 additional reservations,
which is to be completed by June 30, 1976, at a cost of about
$396,000. Also, USGS and BOM plan to conduct field studies of
mineral and energy resources on three reservations. These
studies, necessary because existing information is insufficient
to assess mineral resources on reservations, will help provide
basic information necessary to appraise the mineral potential
on the reservations. This work will continue until September
1980. However, it can be terminated by any of the agencies
upon a 90-day notice. An annual renewal of the project is sub-
ject to agency approval and funds being made available through
BIA.

The lack of adequate minerals inventories has contributed
to the limited amount of planning for minerals development on
reservations. Minerals development has resulted primarily
from requests. by private industry, rather than from actions by
the tribes and BIA. Knowledge of the amount of recoverable re-
sources on the reservations could also benefit the Indians in
that companies may offer a higher bonus bid on areas offered
for lease if it is known that the acreage contains a large amount
of resources. To its credit, in August 1974 BIA initiated a
comprehensive inventory study of mineral resources on Indian
reservations.








84


NEED FOR MINERAL RESOURCE
MANAGEMENT PLANS

BIA has placed only minor emphasis on planning for min-
eral resource development. BIA had not developed formal
mineral management plans for the reservations we reviewed.
However, on the Fort Berthold Reservation BIA did contract with
a private firm to conduct a minerals survey and make recommen-
dations on reservation land to be offered for lease. (See
pp. 6 and 9.)

BIA has a congressional mandate to manage Indian timber
resources through the Indian Reorganization Act of 1934 (25
U.S.C. 466). To insure that all the forest management objec-
tives are met, BIA is required to prepare a timber management
plan for each major reservation having commercial timber.
This plan specifies the annual allowable harvest of timber
and the forest management techniques to be employed.

Similarly, mineral development plans should provide a
basis on which Indian people can decide on the approach they
wish to take on mineral development and also consider the long-
term effects of such development. These plans should include

--alternative development levels,

--socioeconomic impacts,

--cultural impacts, and

--environmental impacts.

The Federal Energy Administration in July 1975 proposed
to study Indian mineral resource development and specifically
cited the need to establish a management plan for energy re-
source development on reservations. This recommendation was
based on the concerns expressed by the Indian people.

BIA officials said, as previously mentioned, that an
inventory is the starting point for planning and that when
adequate information on the amount of minerals on Indian res-
ervations is available, they will consider developing mineral
management plans. Because of the need for reservation income
and employment opportunities, leasing of Indian land contain-
ing mineral resources will probably continue without adequate
knowledge of the resources. We, therefore, believe that BIA
should make plans for mineral development based on the best
information available and update these plans as more accurate
data becomes available. Such plans must be flexible and must
give consideration to the fact that they are based on incom-
plete resource information.


8


















fl







85


The lack of mineral development plans has in some cases
caused delays in leasing of lands. For example, on the Fort
Berthold Reservation, the Tribal Business Council passed a
resolution in September 1973 requesting that BIA declare a
moratorium on further leasing of lands for oil and gas devel-
opment on the reservation until a comprehensive plan for oil
and gas development could be formulated and approved by the
Council. The Chairwoman said that before coal development
can proceed, two major conditions must be satisfied--the de-
sires of the Indian people must be determined and a coal man-
agement plan must be prepared including adequate information
on coal reserves, the effects of coal mining, and alternative
methods of development.

In response, BIA contracted with a mineral engineering and
planning firm to conduct a survey of the potential for oil
and gas on the Fort Berthold Reservation and to recommend
which sections of the reservation.should first be offered for
lease. As a result of the survey, the tribe lifted the mora-
torium in August 1975. The lack of information resulted in
a 23-month delay in minerals development on the reservation.

In addition, the Northern Cheyenne Tribe maintained that
it could lose control of its reservation. If all prospecting
agreements become mining leases, 56 percent of the reservation
would be under lease. Proper planning might have prevented
this situation and could have resulted in an awareness of the
potential ramifications of uncontrolled development.

The Crow Tribe said it wants coal development; however,
it wants to control such development. According to its tribal
chairman, the tribe needs time to develop land-use planning,
to pass zoning regulations, and to pass tax laws relating to
such development. We believe that mineral development plan-
ning should include considerations of such factors.

LACK OF MINERALS
EXPERTISE IN BIA

BIA central and field office officials said that BIA does
not have sufficient minerals expertise. At the BIA central
office and field locations we visited, with the exception of
the Osage Reservation where BIA has a large minerals staff
funded by the tribe, there was a limited number of BIA staff
members with minerals expertise. Because of inadequate BIA
minerals expertise, assistance provided to the Indian people
for minerals development has been limited.








86


Central office expertise

Although BIA's authority for minerals management has
been delegated to its field offices, we were informed that
the centLal office makes policy and continues to provide
its field offices with guidance and assistance. BIA central
office officials said that in many cases, area offices real-
ize they lack the necessary expertise and request their as-
sistance. We were also told, however, that the central office
mineral section is not sufficiently staffed to provide ade-
quate support to its field offices. The BIA central.office
minerals section consists of one minerals expert and secre-
tarial staff. BIA is attempting to hire an additional min-
erals specialist to work in the central office, which should
increase the level of assistance and guidance provided its
field offices.

BIA central office officials said central office direction
to its field offices is provided mainly through title 25 of
the Code of Federal Regulations. Guidance is also provided
through the BIA manual (54 IAM, ch. 6), memorandums, and day-
to-day telephone conversations with field offices. The offi-
cials acknowledge that BIA's manual is outdated and inadequate.
They said that the lack of staff has prevented updating of the
manual and has caused delays in making necessary revisions to
the Code of Federal Regulations. For example, we were told
that personnel shortages contributed to central office delays
of up to 4 years to process changes to Osage oil and gas leas-
ing regulations (25 CFR 183--Leasing of Osage Reservation
Lands for Oil and Gas Mining).

It is essential that BIA's central office provide overall
leadership, guidance, and technical assistance to its field
offices so that these offices can effectively carry out their
trust responsibilities for Indian mineral resource development.
At a minimum, the central office should update and maintain its
operations manual which provides instructions to field offices
and also revise the Code of Federal Regulations when changes
are necessary. It is particularly important for the central
office to take the lead in developing objectives, policies, and
general procedures for the development of Indian mineral re-
sources because of the general lack of BIA field expertise
in the minerals area.

Area office expertise

Of the six BIA area offices we reviewed which have re-
sponsibility for the reservations, five had delegated their
minerals management authority to the agency offices. The
remaining area office retained responsibility for mineral
management, but the agency offices provide assistance for







87


monitoring reclamation efforts. The minerals section of this
area office is staffed with one professional and three cleri-
cal employees. In July 1975 area office officials told us
additional staff was needed. They stated that four additional
professional staff members and clerical support were necessary
to handle the present workload. We were told that the central
office had previously rejected requests for more minerals staff
because funds had not been available; therefore, they had not
requested additional staff in recent years.

One of the area offices without mineral expertise had a
minerals officer position authorized since November 1972; how-
ever, we were told that it had not been filled because of
budget cutbacks. The area office requested this position be-
cause one tribe had expressed the need for BIA coal expertise
to assist them in managing mineral development. BIA central
office officials in the budget office said that BIA's employ-
ment ceiling, as established by the Office of Management and
Budget, is generally lower than the number of positions au-
thorized by the Congress, thereby making it difficult to fill
all authorized positions.

Agency office expertise

At five of the six agency offices we visited that had
been delegated authority for minerals management, BIA, by its
own admission, does not have adequate minerals expertise. Min-
erals management is, generally, carried out by staff without
formal minerals training. The BIA Osage Agency Office, how-
ever, had a minerals staff consisting of petroleum engineers
and engineering technicians.

We noted during our review that, at the reservation level,
BIA had concentrated considerably more staff on management of
forestry, rangeland, and cropland than on minerals. For ex-
ample, at the Navajo Reservation BIA had 15 employees assigned
to forestry, 24 to rangeland, and 65 to cropland activities on
a permanent basis as of June 30, 1974; the income from these
resources amounted to about $5.8, $13.8, and $2.7 million for
fiscal year 1974, respectively. BIA had only four staff mem-
bers assigned to minerals activity with related income of about
$11.5 million in fiscal year 1974. On the Jicarilla Reserva-
tion, BIA had two employees assigned to minerals activities,
with income of about $2.3 million in fiscal year 1974. Dur-
ing the same period BIA assigned nine staff members to forestry,
with income of about $258, and eight to rangeland activities,
with income amounting to about $498,000.

One BIA official said a task force approach, with experts
assisting the field with minerals management, may be the most
feasible method to overcome the lack of expertise problem.


11


79-324 0 76 7







88


BIA should give the task force approach more consideration.
Although it seems unlikely that this approach would be
workable on reservations with large amounts of resources and
resource development, it may be the solution for reservations
with limited mineral resource development. Such a task force
would include petroleum and mining engineers, reclamation ex-
perts, and other experts necessary to cover all phases of
minerals development. On reservations with a lot of develop-
ment activity, we believe BIA needs a permanent staff of
minerals experts to provide ongoing technical assistance and
to carry out its trust responsibilities.

NEED FOR PROCEDURES TO EXCHANGE
MINERAL RESOURCE DATA

BIA does not have formal procedures to regularly provide
relevant mineral data relating to experience gained in the
development process to field offices and/or Indian tribes.
Such information would help most Indian tribes in the early
stages of mineral resource development. The October 1975
Federal Trade Commission staff report on mineral leasing on
Indian lands also made this observation.

BIA officials on the seven reservations we visited were
not aware of important mineral development activities that
had occurred on other reservations. They thought that a
system to provide this type of information would be benefi-
cial. A BIA official on the Osage Reservation said such a
system would be helpful and added that he has been encour-
aging BIA to develop an information exchange system for more
than 4 years.

Following are examples of the types of information we
believe should be made available to other tribes.

--The Navajo Tribe increased income by receiving royalty
rates based on a percentage of the selling price of
coal in 1964, rather than on a fixed rate per ton of
coal.

--The USGS office responsible for assisting the Navajo
Reservation was converting prospecting data upon re-
quest to reserve figures for use in more accurately de-
termining the amount of coal on the Navajo Reservation.

--BIA Osage officials are planning for the second and
third phases of oil development to avoid ruining an
oilfield.







89
i

--The Navajo Tribe has increased Indian employment by
monitoring and insuring that Indian preference in
hiring is being followed.

BIA Navajo Area Office officials told us that, although
formal procedures to exchange mineral development information
do not exist, the BIA central office encourages the informal
exchange of such information with other area offices. How-
ever, this system has not always been effective. For example,
in 1964 the Navajo established a royalty rate whereby the
royalties increased as the selling price of coal increased.
The Crow and Northern Cheyenne Tribes had coal-lease sales
from 1966 through 1971; however, lease terms for both of these
tribes provided for a fixed royalty rate. An official of the
BIA area office responsible for the Crow and Northern Cheyenne
Reservations said he depends on the BIA central office and USGS
for guidance on such matters and, therefore, did not contact
the Navajo or any other area office. A BIA headquarters offi-
cial said fixed royalty rates were approved on the Crow and
Northern Cheyenne Reservations because of (1) tribal pressure
to develop reservation resources as soon as possible and
(2) the lack of BIA experience in dealing with coal companies.
Had the BIA area office responsible for the Crow and Northern
Cheyenne Reservations been aware of the royalty rate concept
based on the selling price of coal, it could have asked the
central office to consider this concept in negotiating the
coal leases.

BIA central office officials said they do not favor
establishing a system to provide mineral development informa-
tion to the various tribes. They said such a system may cause
problems because tribes may believe that what has been obtained
on one reservation could be obtained on their reservations
without giving consideration to differing circumstances. They
stated that this could force mineral companies not to develop
minerals on a reservation. Also, some tribes, they added, may
not want other tribes to have information about development on
their reservation. The officials further stated that it would
be difficult and expensive to establish such a system.

BIA should make pertinent information available to the
various area and agency offices responsible for assisting res-
ervations with mineral development potential. The BIA cen-
tral office could coordinate the dissemination of data and act
as the central clearing point to avoid some of the problems
identified by BIA central office officials. Information dis-
tributed could include data on the tribes plan for developing
their resources, lease provisions, and obstacles encountered.







90


CONCLUSIONS

Opportunities exist to improve development of mineral
resources, increase Indian income and employment opportunities,
and help alleviate the Nation's energy problems through im-
proved BIA management of Indian coal, oil, and gas resources.
Limited emphasis has been placed on developing these resources.
Consequently, (1) the amount of mineral resources on most
reservations is unknown, (2) planning for minerals resource
development has not been adequate, (3) BIA does not have
sufficient personnel with minerals expertise, (4) information
on experience gained during minerals development has not been
exchanged among the BIA field offices, and (5) revisions to BIA
operations manual and applicable sections of the Code of Fed-
eral Regulations are not being made in a timely manner.

The development of Indian mineral resources has, gener-
ally, resulted from requests by the mineral industry rather
than from action by BIA or the tribes. Also, mineral devel-
opment has been delayed in some cases because the tribes were
dissatisfied with the amount of data available.

RECOMMENDATIONS TO THE
SECRETARY OF THE INTERIOR

To help improve development of Indian mineral resources,
we recommend that the Secretary of the Interior direct the
Commissioner of BIA to:

--Develop complete minerals inventories for all reserva-
tions having such resources.

--Develop, through the use of available resource informa-
tion, mineral management plans taking into considera-
tion the wishes of the Indian people, and update these
plans as additional information becomes available.

--Determine the mineral expertise staffing BIA needs to
adequately fulfill its trust responsibilities at its
headquarters and field locations and take the steps
necessary to meet these needs. If it is not feasible
to have mineral experts at all mineral developing res-
ervations, alternatives should be considered such as
using a minerals task force or consultants.

--Establish procedures to exchange and distribute be-
tween area and agency offices information relating to
experience gained by the tribes in developing mineral
resources.







91


--Update and maintain its operations manual and expedite
revisions to the Code of Federal Regulations when
changes are necessary.








92


CHAPTER 3

OPPORTUNITIES TO INCREASE

INDIAN EMPLOYMENT IN THE MINERALS INDUSTRY

The high rate of unemployment among Indians living on
or near reservations makes job development a priority need
of the Indian people. Leasing Indian land for the develop-
ment of mineral resources provides the opportunity for Indian
employment. Companies leasing Indian land for minerals de-
velopment are usually required under the terms of the lease
to give Indians employment preference in the development of
these resources.

However, neither BIA nor the tribes were in a position to
determine whether the Indian preference in hiring provisions
were effective. We believe that, by establishing (1) specific
requirements for Indian preference in hiring and (2) procedures
to require the lessee to regularly report to BIA and the tribes
on their employment of Indians on the reservation, BIA and the
tribes would be better able to determine if lessees are com-
plying with the Indian preference in hiring provisions. Such
requirements could also help BIA and the tribes identify spe-
cific reasons for Indian unemployment. There was substantial
Indian employment in the minerals industry on those reserva-
tions we visited that had specific requirements for Indian em-
ployment and had appropriate followup procedures. On the other
hand, reservations without these requirements and followup
procedures had only minimal Indian employment or the number of
Indians employed was not known.

BIA OBJECTIVE FOR
INDIAN EMPLOYMENT

A primary BIA objective is to help Indians obtain a level
of per capital income and employment that is at least equal to
that of their non-Indian neighbors. In its fiscal year 1976
budget justifications, BIA stated that development of job- and
income-producing opportunities is essential if Indian employ-
ment and income problems are to be improved.

BIA reported that the nationwide unemployment rate for
Indians living on or near reservations was about 39 percent
in 1974. The unemployment rate on the reservations included
in our review ranged from 16 to 35 percent, as follows:








93


Unemployment
Reservation rate (percent)

Navajo 35
Fort Berthold 26
Crow 27
Northern Cheyenne 27
Jicarilla 34
Uintah and Ouray 27
Osage 16


For the same period, the Bureau of Labor Statistics reported
that the total U.S. civilian labor force unemployment rate
averaged about 5.6 percent. The unemployment rate for the
States in which the reservations we reviewed are located
ranged from 4.4 percent in Oklahoma to 6.7 percent in Montana.
These statistics, however, are not entirely comparable to
those available for reservation Indians, because persons not
seeking work are included in BIA estimates and their inclu-
sion results in a higher unemployment rate. However, BIA
estimates do indicate the comparatively high level of Indian
unemployment.

BIA and tribal officials said the following factors con-
tributed to high unemployment on Indian reservations:

--Lack of qualified Indian workers.

--Reluctance to hire Indians.

--Problem of commuting long distances to work.

--Reluctance of Indians to work for petroleum companies.

--Reluctance of Indians to leave the reservation for
employment.

--Lack of adequate communicative skills.

--Poor Indian attitude toward employment.

However, BIA did not know how much these factors contrib-
uted to Indian unemployment.

OPPORTUNITIES TO INCREASE INDIAN
EMPLOYMENT IN THE MINERALS INDUSTRY

At the seven reservations we visited, BIA did not deter-
mine if lessees had complied with Indian preference hiring
provisions. However, tribes at two reservations--the Navajo








94



and Crow--had established procedures to insure that these pro-
visions were being followed, and Indian employment in the min-
erals industry was significantly higher on these reservations.
I
Lease provisions for Indian preference in hiring vary;
however, the requirements contained in the Jicarilla Tribe's
leases are typical:

"Jicarilla Apaches shall be employed in such
mining, drilling, exploration and development opera-
tions to the fullest extent that their qualifications
and the law permits, and every reasonable effort will
be made to train Jicarilla Apaches in the skills and
abilities required ***."

We examined 27 prospecting permits and 33 leases for coal,
oil, and gas development issued on the 7 reservations. Except
for six leases on the Osage Reservation, all of the prospect-
ing permits and leases included an Indian hiring preference
provision. BIA Osage Agency Office officials indicated that
Indian preference in hiring provisions had not been included
in their leases because there was no problem with oil and gas
operators hiring Indians on the reservation.

The coal leases we reviewed also stated that no nonmem-
ber of the tribe shall be hired until 48 hours after the de-
livery of notice to the tribe of a job opening. The oil and
gas leases containing hiring preference provisions did not
include such requirements.

BIA has not developed specific procedures to determine
if lessees are complying with Indian hiring preference. How-
ever, certain procedures to assist Indians in obtaining em-
ployment in the minerals industry were being followed. For
example:

--BIA advertised job openings in a local newspaper when
notified by a coal company of an opening. (BIA did
not, however, follow up to determine if the openings
were filled by Indians.)

--BIA informally contacted oil and gas company officials
to determine job availability.

We believe that these practices provide some assistance to
Indians seeking employment in the minerals industry. They do
not, however, provide adequate assurance that Indian workers
are being provided employment opportunities. Procedures es-
tablished by the Navajo and Crow Tribes are good examples of
the types of procedures needed to help insure Indian hiring
preference. The Navajo requirements include that:







95


--Coal companies establish goals to achieve relating to
the number of Indian supervisors.

--Evaluations of the potential of nonmanagement Indian
employees be performed by the coal companies at least
once a year.

--Coal companies notify the tribe of any new hirings,
promotions, and terminations within 5 working days
of the action.

--Coal companies allow the tribe 10 working days to
provide Indian candidates for permanent jobs.

--Training programs be developed.

On the Crow Reservation, procedures to insure Indian
hiring include that:

--Monthly meetings be held between the tribe and coal
company to discuss employment problems and potential
vacancies.

--The coal company send weekly reports to the tribe show-
ing the number of Indian staff days of labor scheduled
for the week and Indian absenteeism.

--Indians, accepted by the coal company, be admitted for
union membership.

--No nonmember of the Crow Tribe be hired until 48 hours
after the tribe has been notified of the opening.

BIA central office officials said procedures to insure
that lessees comply with Indian preference in hiring lease
provisions have not been established but agreed that such ac-
tion would be helpful. The officials added that limited man-
power and funding make it difficult for BIA to institute such
a program. The officials told us that it would be more ef-
fective to involve the tribes in such a program, which would
also be consistent with the concept of Indian self-determina-
tion. If a tribe has the resources and ability to monitor the
Indian preference in hiring procedures, BIA should encourage
and assist them in doing so; otherwise, BIA should assume this
responsibility.

We believe that the procedures used by the Navajo and
Crow Tribes to help insure compliance with Indian preference
in hiring lease provisions have helped increase Indian employ-
ment. Indian employment in the coal industry on these reser-
vations averaged about 54 percent of the total coal industry







96
*ii

employment on the reservations during 1974. On the Navajo
Reservation 1,313 persons were employed in the coal industry,
712 of whom were Indians with annual earnings totaling ap-
proximately $8.2 million. On the Crow Reservation it is es-
timated that 55 to 60 percent of the 90 employees in the
minerals industry are Crow Indians.

Of the other five reservations which had no procedures
to assure Indian hiring preference, the Northern Cheyenne and
Fort Berthold Reservations, which we visited relative to coal
development, were not yet in the production stage. On the
three reservations we visited relative to oil and gas develop-
ment--Osage, Jicarilla, and Uintah and Ouray--accurate figures
on the number of people employed were not available. State
employment officials from New Mexico, Utah, and Oklahoma and
various BIA and tribal officials did not know the number of
Indians employed in the minerals industry. However, they in-
dicated that it was minimal on the Jicarilla and Uintah and
Ouray Reservations. On the Osage Reservation there were vary-
ing opinions as to the number of Indians employed.

Some BIA agency office officials indicated that proce-
dures to assure Indian preference in hiring had not been es-
tablished because there was no problem with employers not
hiring Indians on the reservation. However, these officials
could not determine the number of Indians employed on the res-
ervation by the minerals industry or the number of jobs avail-
able. One official of a major oil company said he thought that
reports to the tribe or BIA on job vacancies and the number of
Indians working would assist his company in hiring Indians.

CONCLUSIONS

Indian employment in the minerals industry was substan-
tial on the reservations we visited that had established
specific requirements for Indian preference in hiring. In
contrast, Indian minerals industry employment on those reser-
vations not requiring companies to follow procedures, such
as notifying the tribe in 5 working days of any new hir-
ings, promotions, or terminations, was minimal or the number
of Indians employed was not known. Except for the Navajo
and Crow Tribes, which had their own procedures to insure
compliance with Indian preference in hiring lease provisions,
BIA and the tribes did not determine the number of jobs avail-
able or the number of Indians seeking employment.

We believe that all mineral leases should specifically
require Indian hiring preference and that BIA and the tribes
should establish procedures which would require lessees to
provide BIA and the tribes with sufficient data to help insure








97


that Indian preference in hiring is being followed. Proce-
dures have been established by the Navajo and Crow Tribes
to insure Indian preference in hiring.

RECOMMENDATIONS TO THE
SECRETARY OF THE INTERIOR

To improve Indian employment in the minerals industry,
we recommend that Secretary of the Interior direct the Com-
missioner of BIA to

--establish specific requirements in all Indian leases
for Indian preference in hiring and procedures for
lessees to regularly report to BIA and the tribes on
the status of Indian employment and

--establish procedures, for each reservation with min-
erals development, for either BIA or the tribe to
insure that Indian preference in hiring provisions
and requirements are being followed.








98


CHAPTER 4

OPPORTUNITIES TO IMPROVE

COAL-LEASE TERMS

The leasing of Indian lands for mineral development is
an important part of the economy on many reservations. Ac-
cording to USGS, in fiscal year 1974 there were 13,064 oil
and gas leases and 981 leases for other minerals on Indian
reservations. For the same period, BIA reported that the
total income from these leases amounted to about $52.7 mil-
lion. We believe that BIA can improve management of Indian
mineral resources and increase Indian income from minerals
development. For most Indian coal leases we reviewed, roy-
alty rates on coal remained fixed during periods of rising
prices. Furthermore, the Federal regulation limiting the
amount of coal-lease acreage on Indian land needs to be re-
evaluated.

RESPONSIBILITIES AND OBJECTIVES FOR
LEASING INDIAN MINERAL RESOURCES

BIA and USGS share responsibility for managing Indian
mineral resources. BIA's objective in carrying out its re-
sponsibilities for approving mineral leases and permits is
to obtain for the Indian owners a maximum recovery and income
consistent with a sound conservation program.

Although BIA is responsible for all phases of mineral
management through the leasing process, USGS also plays an
important role since it is responsible for advising BIA on
the adequacy of the lease terms and for assuring compliance
with the lease terms. During the leasing process, USGS'
specific responsibilities are to advise BIA and the tribes on
--the number of acres to be leased, royalty rates, and
lease terms and

--the adequacy of bids received from interested parties.

USGS responsibilities for assuring compliance with lease
terms are discussed in chapter 5.

ROYALTY RATES SHOULD BE BASED ON
THE SELLING PRICE OF COAL

BIA has not established a coal-lease rate policy based
on the selling price of coal. This has resulted in situations
where the Indians do not benefit from their coal resources as
the market value increases. With a fixed royalty rate, Indian