By Colin Packham
SYDNEY (Reuters) - Australia said on Friday it had agreed to compensate a charity financially for wrongly accusing it of inciting refugees to self-harm in protest at conditions at a detention centre on the Pacific Island of Nauru in 2014.
The government's admission and settlement with Save the Children Australia comes just days after Immigration Minister Peter Dutton blamed unnamed organisations for two people setting themselves on fire on Nauru during the past two weeks.
The historical case involving Save the Children Australia goes back to October 2014, when the immigration department ordered the removal of 10 of the charity's employees from the camp after several refugees sewed their mouths shut, and others made themselves sick by drinking washing powder.
Nine were subsequently deported by the government of Nauru.
Two independent reviews into the affair concluded the Australian government's evidence against the charity workers was unsubstantiated.
The Department of Immigration said it has accepted the recommendations of the most recent independent review, headed by professor Christopher Doogan, and as a result has agreed a confidential financial settlement with the charity.
"The Department also recognises that (Save the Children Australia) has suffered detriment for which – to adopt the words of Professor Doogan – the payment of money cannot be adequate compensation," the department said in a statement.
Conditions at detention camps in the Pacific remain under a spotlight, with reports of harsh conditions and child abuse drawing criticism from inside and outside Australia.
On Monday, a 21-year-old Somali woman set herself alight at the camp in Nauru. She remains in a critical condition.
It was the second case of self-immolation at the camp in a week. A 23-year-old Iranian man died from burns after setting himself alight last week.
Mat Tinkler, director of public affairs and policy at Save the Child Australia, said it was "ironic" that the immigration minister had blamed unnamed organisations for encouraging the latest self-harm protests, after the government had been forced to backtrack over its accusations against his own charity.
Controversies arising from Australia's hardline immigration policy, have become a major headache for Prime Minister Malcolm Turnbull during campaigning for likely July elections.
Under the policy, asylum seekers intercepted trying to reach Australia after paying people smugglers are sent for processing to camps on Nauru, which holds about 500 people, and on Manus Island in Papua New Guinea. They are told they will never be settled in Australia.
(Editing by Simon Cameron-Moore)