The concept of biodiversity offsets emerged as a means of compensating for biodiversity damage that results from development. The tool is integrated within the Environmental Impact Assessment (EIA) process where biodiversity offsets represent the ‘last resort' after all the options of the mitigation hierarchy have been exhausted. The tool promises achievement of sustainable development outcomes. However, it seems that there is uncertainty about when offsets should be formally introduced into the EIA process because considering them as the last option complicates the practicality of considering them within the tight EIA regulatory framework. Drawing on documentary analysis and interviews with the key role players, this research aims to investigate how existing policy and governance framework has influenced the efficacy of offset practice to date, and explore options of improving practice and explore the policy-practice gap in the South African context and formulate recommendations for policy and institutional changes required to improve offset effectiveness in South Africa.