Who is in the wrong?

I've always noticed that my sister gets upset when anyone scolds her son. She's said time and time again that no one shouldn't be telling her child anything or whip him. I understand the whipping part but how will you ever be the only one to reprimand a child. My nephew is very disrespectful, he doesn't care who you are or how old you are he's going to be disrespectful. He has even fought with his mother sometimes which includes him hitting her and she has to hit him back for him to stop. The dad is worse, his dad was abusive and now he sees and thinks it's okay. He tends to bully my daughter as well, she's 3 he's 11. He also tells his mom if she ever decides to get another man he'll kill him. He curses, he talks back and he basically fights with whoever it doesn't matter the person's size or age. I've witnessed him kicking my sister and she did absolutely nothing. He talks to both his parents how he wants to even shouts at them. He says his parents can't do him anything. I've never touched him but I've scolded him when he gets disrespectful and my sister gets upset. She can be around while he's up to mischief and she'll act blind. She said that she doesn't care who he disrespects, that is her child.

Sorry for the spelling or grammar error, i was in a rush.