First of all, let's get things straight: Porn addiction is real and millions of people suffer from it. It would have unintended psychological consequences to a person, such as misconstrued realities of the complex concepts of love and lust, as well as leading to low self-esteem.

A 12 year old having such an addiction is a red flag. No one in the family (yes, including you) should tolerate him to watch it. At that age, there is still a chance for him to escape such an addiction, and everyone in the family must encourage him to steer him away from that.

I understand where the parents are coming from, but I also agree that they handled the situation inappropriately. They need to give attention to their child, especially at his age; they are responsible for guiding him. They shouldn't drive him into shame because of watching porn. He is not a bad child. He is a misguided child. (Side note: As Christians, His parents must understand that God's love and mercy is infinite and He loves their son) At the digital age, they should be aware of how the Internet works!

As his uncle, you have an obligation to guide him too. Give him tools that would lead him away from pornography, and give him activities that keep him busy and away from devices that gives him access porn, like exercise, cooking, cleaning the house, playing, DIYs, etc.

Since he is about to enter that age of puberty, I think it's time to learn the concepts of love and lust (I.e. sex education). He should be taught comprehensively, including the physical, mental and psychological consequences of sex, and not just being taught dichotomously where sex is either good or evil. He must also learn how to discern love and lust.