Revelations around the handling of sex allegations at Oxfam should be a wake-up call to the charity sector, the International Development Secretary said.
Penny Mordaunt said the charity failed to show moral leadership and had not properly informed donors, regulators and prosecutors about the actions of its workers.
Hollywood star Minnie Driver has become the first celebrity to quit as an Oxfam ambassador following allegations that senior staff working in crisis zones paid for sex with vulnerable locals.
The charity also faces a challenge to hang on to major corporate partners, and the Duke of Edinburgh’s Award has confirmed it is reviewing its association with the organisation.
In a speech to an aid conference in Stockholm, Ms Mordaunt tore into Oxfam over its response to the revelations about aid workers in Haiti in 2011.
She said: “The recent revelations about Oxfam – not solely the actions perpetrated by a number of those staff – but the way the organisation responded to those events, should be a wake-up call to the sector.
“They let perpetrators go. They did not inform donors, their regulator or prosecuting authorities.
“It was not just the processes and procedures of that organisation that were lacking but moral leadership.”
Oxfam received £31.7 million in taxpayer funding in 2016/17.
But Ms Mordaunt indicated millions in taxpayer funding could be cut off in the wake of the scandal.
She said: “No organisation is too big, or our work with them too complex, for me to hesitate to remove funding from them if we cannot trust them to put the beneficiaries of aid first,” she said.
Oxfam officials were meeting the Charity Commission on Wednesday after the regulator launched a statutory inquiry.
Ms Morduant, who said a culture change is needed, is due to meet the National Crime Agency on Thursday after talks with charity bosses, regulators and experts in recent days.
Big-name supporters including Marks & Spencer, Visa and Heathrow Airport said they are monitoring the situation closely.
A spokeswoman for the Duke of Edinburgh’s Award (DofE) said it had not been notified of any safeguarding incidents involving scheme participants volunteering in Oxfam stores or other charity shops.
She added: “In light of these allegations, we will be reviewing our association with Oxfam as a participant volunteering provider.”
Good Will Hunting star Driver quit her Oxfam role after 20 years with the charity, saying she was devastated by the scandal.
The 48-year-old tweeted: “All I can tell you about this awful revelation about Oxfam is that I am devastated. Devastated for the women who were used by people sent there to help them, devastated by the response of an organisation that I have been raising awareness for since I was 9 years old #oxfamscandal.”
The scandal led to the resignation of Oxfam’s deputy chief executive Penny Lawrence, who said she took full responsibility for what had happened on her watch.
All I can tell you about this awful revelation about Oxfam is that I am devastated.Devastated for the women who were used by people sent there to help them, devastated by the response of an organization that I have been raising awareness for since I was 9 years old #oxfamscandal
— Minnie Driver (@driverminnie) February 13, 2018
Oxfam has issued an “unreserved apology” to the Government, donors, supporters and the people of Haiti over its handling of incidents including the alleged use of prostitutes by workers, in the earthquake-hit country.
Four members of Oxfam staff were dismissed and three, including the country director Roland van Hauwermeiren, resigned before the end of the 2011 investigation.
According to the Times, Oxfam knew about concerns over the conduct of Mr van Hauwermeiren and another man when they worked in Chad before they were given senior roles in Haiti.
The charity has said it is also “working hard on corroborating the information from Chad”, related to further allegations about the use of sex workers by staff there in 2006.
Ms Mordaunt said her department had created a new safeguarding unit which would “urgently look into how we can stop sexual abusers and predators being reemployed by charities” including the possibility of a global register of aid workers.
Meanwhile Oxfam International said chairman Dr Juan Alberto Fuentes Knight has stepped down in the face of charges in Guatemala in relation to a corruption case involving a bus concession.