QCOSTARICA — While the electricity rationing for this week has been canceled, at least until Thursday, the announcement by the Instituto Costarricense de Electricidad (ICE) that it would carry out programmed blackouts across the country, it impacted labor, finances and sustainability of the country’s business and production sectors.
Impact at the level of sustainability
Angie Elizondo, Director of Sustainability at Baker Tilly Costa Rica, told Revista Summa that the electricity rationing was announced because the country is under the El Niño-Southern Oscillation (ENSO) event. This is a natural phenomenon that involves fluctuating ocean temperatures in the equatorial Pacific, causing variations in rainfall patterns, surface temperatures and winds.
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Because the country is under the effects of this phenomenon, ICE announced that electricity generation was being affected, since a large part of the generation sources for Costa Rica are hydroelectric and wind plants.
Elizondo pointed out that the concern of the different industrial sectors and society in general regarding this situation is worrying, since electricity is what allows us to refrigerate food, have access to media, use medical equipment, or even on certain occasions is necessary to supply other resources such as water and gas, to give some examples.
“It is a fact that the electrical system suffers vulnerability, and that shortages are a risk with extremely high possibilities of materializing, as well as the consequences of its impact. This is why, with this situation, the need to create work methodologies based on sustainability (balancing the three dimensions: environmental, social and economic) is once again reinforced, which allow development while ensuring the resilience of organizations.,“ said the specialist.
Precisely, some of the characteristics of sustainability that should be considered in strategic planning are:
- Risk management as a pillar: identifying the entity’s risks (environmental, social and economic) will help take actions to prevent and manage their materialization, as well as mitigating their effects.
- Address risks comprehensively: When creating risk prevention and mitigation plans, all interested parties should be consulted before making a decision. Companies should not be seen as an isolated entity, since their operation depends on the environment in which they develop, as well as those who depend on them for their products or services.
- Define the materiality of the organization: it will allow you to make decisions regarding whether or not to carry out certain actions, for example: it will help you classify your risks and know how capable the entity is of solving them.
- Adaptation to climate change: the resilience of the organization will also depend on the ability to adapt to changes, especially those that it cannot control. It is necessary to identify what actions are required to adapt to climate change: evaluate and redesign its infrastructure, as well as its processes and resources. Additionally, establish actions to reduce your contribution.
Financial impact of losses generated by electricity rationing
For his part, Alberto Porras, managing partner of Baker Tilly Costa Rica, commented that it is inevitable that the rationing policy issued by ICE will not negatively impact the businesses of merchants who, within their contingency plans, did not take into account the risk that will generate the need for an auxiliary power plant.
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Porras pointed out that among those who would be most affected are merchants who have inventories prone to deterioration due to lack of refrigeration, lighting, humidity control or other mandatory procedure to keep it in optimal conditions for sale.
“Impairments must, in addition to their proper accounting record, consider the elements required by the Tax Administration, for their recognition as a deductible expense, and avoid future conflicts in the event of an audit,” mentioned the managing partner.
He added that these elements are suitable documentation that reliably certifies such events. This documentation must be capable of supporting and demonstrating the occurrence of deterioration of the goods involved. A practical component is a detailed report that thoroughly describes the affected property, accompanied by photographic support.
He added that, in this sense, it is an essential requirement to obtain a certification issued by a Certified Public Accountant (CPA) that guarantees the value of the shortfalls that resulted from the events. Such certification is important to accurately determine the economic amounts of losses and to guarantee the coherence of accounting records.
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“The previous practice allows the taxpayer to support their inventory loss for the preparation of Income Tax. In addition to reducing the risk of presumption of sale or self-consumption, which also has an impact on the Value Added Tax (VAT), since the unjustified reduction in inventory could generate VAT to pay,” Porras added.
Impact on Labor
Another area that would be impacted by electrical rationing is the Labor area of companies.
Ricardo Nassar, specialist at Baker Tilly Costa Rica, mentioned that, in the Labor issue, employers must take into account that, as part of the employer’s powers granted to them by Law, it is possible to make modifications to the work schedule of employees, as long as said modifications do not result in an abrupt change that causes harm to the daily routine of the workers.
Nassar added that, as has been pointed out by the Second Chamber of the Supreme Court of Justice, when the employer must make modifications to non-essential elements of the employment relationship based on unexpected needs, abusive Ius Variandi would not be incurred. “The above is applied in a timely manner as a necessary measure in the face of the sudden suspension of electrical services that ICE has recently communicated,” said the expert.
In this sense, he recalled that, “The schedule, unlike the working day, is not considered one of the essential elements of the employment contract, so, if it does not imply harm to the worker, it can be modified by the employer according to the needs that may eventually arise during the employment relationship.”
In addition to the above, Nassar also stated that, by provisions of the Ministry of Labor, the employer’s power to modify the workers’ schedule has been approved, as well as the type of work, whether in person or from home in depending on the impact that these suspensions have in the different areas of the country.
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