The woman bit the officer's arm when he tried to stop her from running off and he hit her on the head in an attempt to get her to release her bite.
A struggle ensued and the woman was pepper-sprayed before being handcuffed. In the course of the struggle, the woman's towel fell off.
Two more officers then arrived at the scene, including a female officer, who wrapped the woman in a blanket and took her to hospital.
The woman was traumatised by the incident and complained to the Authority, making a number of allegations about excessive use of force. The IPCA has not upheld these complaints.
Authority chairman Judge Colin Doherty said: "Police continue to frequently be first responders for emergencies involving people experiencing mental health episodes.
"They are required to assist in performing a health function that does not sit comfortably with their predominant law enforcement function.
"This is despite officers commonly lacking the skills and strategies to deal with mentally impaired people in a way that effectively reduces their mental distress and de-escalates the situation."
New Zealand Police released a statement saying it accepted the IPCA report that found officers had used reasonable force when restraining the woman.
Western Bay of Plenty area commander Inspector Clifford Paxton said he supported the actions of the officers involved.
"As police, we have a duty of care to protect life and safety. Our officers were protecting this woman and ensuring her safety."
Where to get help:
• 0800 543 354 (0800 LIFELINE) or free text 4357 (HELP) (available 24/7)
• https://www.lifeline.org.nz/services/suicide-crisis-helpline
• YOUTHLINE: 0800 376 633
• NEED TO TALK? Free call or text 1737 (available 24/7)
• KIDSLINE: 0800 543 754 (available 24/7)
• WHATSUP: 0800 942 8787 (1pm to 11pm)
• DEPRESSION HELPLINE: 0800 111 757 or TEXT 4202
• NATIONAL ANXIETY 24 HR HELPLINE: 0800 269 4389
If it is an emergency and you feel like you or someone else is at risk, call 111.