The Commission of the European Community (EC) has recently reiterated its desire to adopt a proposal for an environmental liability Directive in the near future. But despite more than a decade of studies and analysis, the nature and basic structure of the contemplated Directive are not yet clear. A Commission working document issued in the Summer of 2001 suggests that the Commission's thinking on the contemplated regime continues to evolve. The working document's regime would impose strict liability on operators of listed activities for biodiversity damage, water pollution, and personal injury caused by environmental harms, and fault liability on operators of non-listed activities but only for biodiversity damage. This article discusses some important features of the regime outlined in the July 2001 working paper. It analyzes the nature of the proposed regime (civil-public law), and discusses its scope and definitions, the objective of liability and the strict/fault liability distinction, the proposed joint and several liability rules, the rules governing restoration of environmental damage, access to justice, and some miscellaneous issues. This analysis shows that the working paper would create an awkward and complicated hybrid legal regime that incorporates both civil and public law elements. However, many elements of this regime are not necessary for achieving the objective of natural resource restoration. Given its restoration objective, the proposed EC regime does not have to impose any obligations on operators. Rather, obligations imposed on member states would suffice. Such an administrative law regime, which could be made part of the pertinent existing EC legislation, would be able to ensure that significant habitat damage and water pollution damage is remedied. No liability rules should be required by the EC; member states should be free to decide how to finance natural resource restoration. Thus, rather than a hybrid regime, the EC would be well advised to adopt a relatively simple public law regime.